Personal loan market shrinks 10% in November

Esther James, personal finance analyst at Moneyfacts.co.uk comments: “Another two lenders bite the dust in the personal loan market this week, with the withdrawal of Hanley Economic BS and Northern Rock funded Eskimo Loans. They join GE Money, Leeds BS and LV= which withdrew earlier this month, marking an almost a 10% reduction in the number of unsecured loan providers.

“Such a large reduction in just the last month is worrying. With no signs of rate rises slowing, it’s a rather unsettled market. The credit crunch is showing its strength in the personal loan market.

“Anyone considering a personal loan might be advised to act sooner rather than later. With less choice, a more cautious lending strategy and the impending decision on payment protection insurance sure to shake up the market, the 2008 loan market could look very different.

“While a handful of competitive deals are still available, rates as high as 10% now feature in the Moneyfacts.co.uk best buy charts. Investing some time in shopping for the best deal could save you a bundle in the longer term.”