Loans - UK - January 2015
“Customers are seeking a greater level of transparency with loan products – as is reflected in the surge in usage of price comparison websites when applying for loans. However, it would be a mistake to overstate a trend towards digital as Mintel data suggests that face to face is undergoing somewhat of a revival – especially when looking at loans taken out more recently.”
– Sean Song, Research Analyst – Financial Services
This report discusses the following key topics:
- Regulations in the payday loans industry
- How are people applying for loans, and the future
- The continued rise of peer-to-peer lending
The personal loans market continues to be a competitive one, with rates dropping as low as 3.9%, making loans more affordable to more people. If the base rate continues to hold at 0.5%, which is looking likely for the best part of 2015, the pool of potential borrowers will continue to grow.
The payday loans market has undergone a transition in 2014, as new regulations outline the new framework within which lenders must now operate. Remaining lenders are eager to snap up customers who have been left without a payday lender, while at the same time building a more positive image in the wake of the new regulations.
This report examines the personal loans industry, including how people are applying for loans, and how likely they are to apply for a new loan within the next 12 months. The report also includes discussions on the existing market landscape, the brand strength of key players in the market, and how that may change in the coming year. Market drivers are analysed in order to present a view on how the industry is likely to perform beyond the next year. In addition, the report includes in-depth analysis on payday loan usage and consideration, as well as peoples’ attitudes towards the place of payday loans and lenders in the market.
This report examines the UK loans market, and includes products such as unsecured personal loans and high-cost short-term credit loans including payday loans. It does not cover analysis of secured loans, which are typically secured against the borrower’s property. Personal loans are, in the main, available to borrow for between £1,000 and £25,000 (subject to credit checks) over fixed repayment terms of one to 10 years. High-cost short-term credit loans and payday loans are, for the purpose of this report, defined as unsecured loans of value under £1,000 with a repayment term of less than one year.
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