Over recent months credit conditions in the UK have become tighter and tighter, and this has all stemmed from the global credit crunch, which took a hold in the UK last summer and has been wreaking havoc in the financial markets ever since. With so many people now unable to get finance as easily as they could before it is little surprise that so many have turned to alternatives such as payday loans and doorstep lenders, and the increasing number of people turning to lenders such as these has been reflected in the rise in business that some of these lenders have enjoyed.

The fact that credit conditions have become so much tighter over recent months has not stopped consumers’ needs for finance – in fact, quite the contrary, because as credit conditions have become tighter living expenses have become higher, and this has made it even more necessary for many people to borrow money. However, with mainstream finance now well and truly out of reach for many people – especially those with damaged credit – the only alternative is to seek assistance from a doorstep lender.

Doorstep lenders have commonly been associated with offering finance to lower income people who have traditionally been unable to get finance elsewhere, and have also been linked to high rates of interest. One well know doorstep lender, Provident Financial, which also owns the high interest credit card Vanquis, which caters for those with damaged credit, recently reported that in the first half of this year there had been a rise of 34% in business, which clearly shows that an increasing number of people have been turning to lenders such as these as an alternative to banks and other mainstream lenders.

One industry official recently stated: ‘With the ongoing tightening of credit scorecards by high street providers, some of those seeking unsecured borrowing will face the prospect of even higher monthly repayments or being turned down for loans for which they would have previously been accepted.’

He added: ‘The tough economic conditions will see the likes of Provident Financial continue to fill its boots as the bigger lenders remain far more selective about the type of customers they are prepared to lend to. Whilst consumers may still be able to get their hands on unsecured funds, some are going to be faced with paying rates they would have dismissed out of hand just 12 months ago.’

Whilst many people have certainly gone down the doorstep lender route, those with decent credit ratings should bear in mind that there are still personal loans available from traditional lenders, and that by comparing different loans from a range of lenders they may still be able to get a competitive deal on their borrowing. Comparing loans can be done with ease and convenience online, and could save you a lot of money in interest compared to some of the more expensive alternatives.

Related posts:

  1. Bank charges won’t be included in high cost credit report
  2. Increased number of people face bankruptcy

Tagged with: • •

Filed under: Articles

Like this post? Subscribe to my RSS feed and get loads more!