Loans availability ‘could tighten’
Article Category: Debt Consolidation Help and Advice
The availability of unsecured loans and other forms of borrowing could be set to tighten in the coming months, according to a Bank of England report.
In its Credit Conditions survey for the third quarter of 2007, lenders told the bank that credit card approval terms are also likely to be toughened in the near future.
Changes in the economic outlook and reduced confidence in approaching risk are cited as likely factors which could “lower unsecured credit availability slightly further over the next three months”.
Meanwhile, “respondents also expected to tighten the criteria they use to assess both credit card and non-credit card applications”.
Figures obtained by the Bank of England show that unsecured loans availability fell slightly in the three months leading up to the survey, despite approval conditions remaining largely the same.
Michael Coogan, director general of the Council of Mortgage Lenders, observes that the Northern Rock liquidity crisis could yet have a greater effect on the future market.
While the survey was carried out before the crisis, Mr Coogan suggests that “funding constraints arising from the slowdown in the interbank lending market were already apparent”.
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