Personal loan supply drying up, study finds

Tue, 23 Dec 2008

The supply of personal loans is drying up, according to new research.

A study by MoneyExpert.com reveals that since January the number of personal loans on offer to people looking to borrow £5,000 has fallen by 46 per cent from 105 to 57.

People who are able to find a personal loan to suit their needs also face paying more in terms of interest with the average APR increasing from 10.65 at the start of the year to 29.4 per cent now.

Sean Gardner, chief executive of MoneyExpert.com, said: "With unemployment on the up, lenders are increasingly thinking twice before offering money they're much less sure they'll get back."

The cost of this risk is being passed on to people through higher interest rates and fewer personal loans on offer, he added.

Recently, a study by uSwitch.com found that the cost of personal loans has continued to rise despite recent falls in the Bank of England base rate .
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