The nation's consumers are becoming less interested in personal loans, an expert from a price comparison website has claimed.
Stuart Glendinning, managing director of moneysupermarket.com, has said that the recent interest rate rises have already translated into a decrease in the number of applications for personal loans.
Furthermore, lenders may be forced to increase their interest rates further if rules surrounding the sale of payment protection insurance (PPI) are tightened, as many banks use the product as a means of making personal loans more profitable, the expert asserts.
With the added pressure of rate rises, Mr Glendinning states that the sub-six per cent loan market could be at an end.
Despite the fact that personal loan interest rates "stubbornly stayed below six per cent" after the first two interest rate rises, he noted that the last, unexpected rate increase in January was "the straw which broke the camel's back".
"Rates are moving up and I can't see many providers coming back in below six per cent," remarked Mr Glendinning.
Earlier this week, the Office of Fair Trading announced it is referring its investigation into PPI - which is often sold alongside personal loans - to the Competition Commission.
Source
http://www.londonstockexchange.com/en-gb/pricesnews/
investnews/article.htm?ArticleID=18056559
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