Are there enough loan providers to go around?

In the last few weeks we have seen several new loan products being launched onto the market. This maybe a sign that lenders have a growing appetite to lend being that they are in some cases becoming more flexible in their lending criteria. Not so long ago we as brokers were limited in our unsecured offerings to a couple of near prime branch based lenders (no good if you lived outside of their branch network) and the main guarantor loan providers. Plus of course we had the ubiquitous payday loan offerings.

Now at last we have some offers to get our teeth into so to speak. In the main the new unsecured loan products are geared towards good quality home owning customers but they have rates to reflect this starting at a very decent 7.9%. There is also a further prime product geared very specifically towards customers needing to borrow larger amounts over a longer period of time, most likely for home improvements but for whom the option of raising against their house is unrealistic due to lack of equity to secure against for example. An APR of 14.9% is available for loans of up to £50,000 over a ten year term. You can of course make excess payments and clear the loan off early.

There are also shorter terms loan offerings for customers who have suffered from credit problems in the past or have a weak credit profile. Loan terms from 7 months are available dependent on the balance required. Customers with bankruptcy or recent IVA history will not qualify but that aside if you can prove affordability then the loan is quite likely one you will be eligible for.

For customers looking to borrow against their property because they are looking for a lower rate or for more flexibility in the loan terms then we can now achieve loans up to 95% of the property value. Remortgage providers tend to offer a maximum of 85% to 90% so clearly there is a gap in the market for these products. If you were looking to raise funds and your existing mortgage was at a particularly low rate because you took it out some time ago you may not wish to remortgage? In this scenario also a secured homeowner loan could be a solution.

Tenant loans remain a challenge to place unless certain criteria are fulfilled but this in time will change in my opinion. For now the options are restricted to branch based lenders like Everyday loans, the Guarantor loan providers and small cash loan businesses like Pounds2Pocket. Fee charging remains a bone of contention. I think that in time it should be stopped as a practice altogether on unsecured lending. It penalises the more vulnerable people who search online for loans. Many of these people seem unaware that making multiple applications or paying a fee does not guarantee them a loan and that these same loan providers are widely available to them for free anyway. Our Loans with no credit check for example do not attract a fee and require certain criteria to be met to guarantee the loan. They certainly do not warrant charging a customer upwards of £40 merely for presenting the option in the first place.