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UK personal loans: new lending value down but still healthy

15th December 2006

Personal loans performed poorly in 2005; the market contracted by 5.6% in terms of new lending, falling from a value of GBP67.4 billion in 2004 to GBP63.6 billion in 2005. The fall in new business in 2005 is attributable to a weakening economy, rising interest rates and rising unemployment. Furthermore, lenders have been tightening their lending criteria due to the rising level of bad debt. However, the economy, interest rates and employment are all historically healthy and thus can support what is still a high level of new lending in personal loans.

Source: Datamonitor, "UK Personal Loan Distribution 2006" (DMFS1891)