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The current loans market is still restricted

Despite urges from government and business, the banking sector is still reluctant to open up lending further and anyone looking for a cheap loan will still find them hard to track down.

Being avid watchers of the loan industry we look out for trends and quickly notice any major changes in activity. So with the loans marketplace having been in a banking stranglehold for many months now, we've been awaiting the day when lending criteria loosen slightly and allow the typical borrower to find a reasonable deal. Sadly that day has still not arrived and the prospect of finding any loan, let alone a cheap loan, is fairly slim.

We watched on the news channels recently many stories from businesses that we're effectively being strangled into closure through the lack of available funding from the banks. In the retail sector the situation seems just as difficult, with hardly anyone lending at what we would call average or low rates.

Of course there will always be operators working the fringes of the lending market and searching for easy-to-acquire business and then charging higher rates. These markets tend to be the small unsecured loans and the newer payday loans, where high interest charges are used to offset the higher probability that a larger percentage of borrowers will default on their loans.

Other sectors that still seem to be operational are those where a safe level of security is inherent in the loan, such as car finance, where cheap loans are still available, but of course the vehicle acts as cast iron security. Other areas include practices where the lender already has a high level of confidence in their customers, such as the supermarkets who may be happier to lend to customers who own their loyalty cards, where they can see in-depth financial histories, before deciding to lend.

So we still have a way to go before cheaper loans become widely available again, if they ever do.

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