Abacus Daily Debt News

Unsecured loans ‘fall 45%’

Less people are willing to take out unsecured loans in the wake of the credit crunch, new figures have suggested.

New business within this sector dropped 45 per cent in February compared to a year before, according to data published by the Finance and Leasing Association (FLA).

This may be partly due to reluctance on borrowers’ part to agree to repayment plans in the current climate, it noted, but added that lenders have also restricted the supply of loans due to the higher risks posed by job losses.

Head of research and chief economist for the FLA Geraldine Kilkelly remarked:
"Rising unemployment and low consumer confidence have led to a further drop in unsecured loan new business in the last two months."

Secured loans were also impacted, falling 83 per cent year-on-year in February.

Meanwhile, March saw the supply of mortgages weakening, the British Bankers’ Association has revealed.

By Jamie Price