Nice Loans.co.uk > News > Cheap Loans - Latest News
Cheap Loans Price War
It seems that providers of cheap loans are out looking for new customers again after a period of consolidation, when product availability was restricted and demand was outstripping supply.
Ever since the credit problems of the finance industry hit the UK loans market, new potential borrowers have been struggling to find willing providers of any loan, let alone cheap loans, but that may be starting to change as a number of competing high street loan providers are beginning to act competitively against each other.
The credit crunch was bad news for new borrowers. Not only did the availability of finance, particularly secured and unsecured personal loans, become severely reduced, but the cost of loans increased dramatically too. Interest rates soared and many companies were being forced to process administration fees on top of interest charges to cover their costs. The reductions in the base rate at the same time seemed to have no influence on the interest rates loans customers were being asked to pay.
Of course the root cause of the higher loan rates and reduced supply was the additional levels of caution banks were being forced to apply when lending new money. They simply had to reduce their exposure to bad debt so being picky about who they offered loans to and charging rates that gave them more cover in the event of non-repayment was an easy solution.
It now seems that a number of UK banks and loan companies have found their feet again, so to speak, and are actively seeking new customers by offering cheap loans. The requirement to build up their customer base at the moment is such that there may be a price war developing with 3 or 4 big brands competing with each other to offer the lowest rate loans.
It is one thing being offered a low headline rate, quite another getting accepted for these loan deals. Finance companies will still be very cautious about the customers they lend to, so good credit records, stable employment and all the other assessment values they look at will still be important.
Copyright © 2011 Nice Loans - The Cheap Loans Site
