People wanting to borrow money could find their choice of providers significantly reduced if lenders continue to drop out of the market.
More and more loans lenders have been pulling out of the industry and last week First Plus became the latest lender to withdraw from the market, joining seven other leading loans companies who had previously pulled out due to the financial situation at the moment.
According to market analysts, the fact that leading companies are withdrawing means that it is very likely that the market will continue to shrink. They believe that this is because many of the lenders have not been finding secured loans a viable business option.
This loans issue is a knock-on effect from the issues that mortgage lenders have been having. With the house prices falling, loan lenders can no longer be sure that if a borrower cannot pay their loan, there will be enough equity left in their house to be able to pay off the debt. Taking out unsecured loans therefore seems to be a more reliable option as they are not secured by your property but with the loans market reducing so quickly, it cannot be guaranteed.
The number of lenders has greatly reduced and it looks set to continue falling rather than making any improvements.
This is really bad news for people in debt who need the back up of a secured loan in order to reduce the amount of monthly debt that they have to deal with, but with tighter lending rules and a diminishing market, borrowers are finding it more and more difficult to obtain one.
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