Accessing unsecured loans set to become trickier in the UK

Last post: Oct 30, 2017

A Bank of England survey has revealed that lenders of unsecured loans in the UK are becoming more risk averse, which is putting the brakes on lending. Find out why and get the latest...

 Accessible, flexible and often quick to arrange, unsecured loans have risen dramatically in popularity amongst consumers over the past five years. Often a simpler route to swift finance than more traditional loans, these products can provide a lifeline in cases where emergency finance is required to cover unexpected costs such as home maintenance.

Yet rising demand for unsecured loans is now prompting lenders to exert extra caution in regard to these products. In October 2017, a Bank of England survey revealed that the unsecured loan market had witnessed its biggest availability cut in eight years. Not since Q3 2009 have unsecured lending levels dropped to this extent.

Why are lenders clamming up?

The reasons behind the drop in UK unsecured lending ultimately lie with today's uncertain global economic outlook. With so much tension and turbulence at play worldwide, within Europe and even domestically, it's not easy to predict where markets will go next or how the economy will respond.

In times of uncertainty, lenders traditionally become more caution about the types and levels of lending they perform. Often first to go are the loans they consider the greatest risk to their portfolio – those which are not secured against an asset like property. In short, unsecured loans are usually much harder to access when the economic picture becomes unclear.

Can borrows still access loans?

Although unsecured loans are still readily available to consumers, it's likely that fewer lenders will be offering the service for the time being. It's also likely that consumers may have to jump through additional hoops in order to prove the affordability of the products they want.

Searching for an unsecured loan? Our team can help you access the finance you need, whatever the economic picture. With inside knowledge and close industry ties, we provide the information and the connections you need to access the best forms of finance for you. Ask us about unsecured loans today.