Money News

Higher rates for loans inevitable

Wednesday, November 7 2007

Several loan providers are to pull out of the unsecured loan markets due to the scarcity of credit following the summer’s sub-prime credit crisis in the U.S., furthermore, loan rates have been driven up by 4% over the last month.

The companies which have withdrawn from the unsecured loan market are GE Money, Leeds Building Society and the company formally known as Liverpool Victoria.

It is widely believed that others will follow suit quickly. The variety of the lenders pulling out of the unsecured loan market suggests that the credit crunch will be far reaching.

Unsecured loan and consolidation loans have become increasingly popular with people trying to juggle different debts, about 70% of loans taken out are used to pay off other debts. The credit crunch and following tightening of lending criteria along with increasing rates could see more spiralling debts and financial headaches.