Secured lending market to slow down
21 September 2005
However, this means consumers will be able to get better secured loan deals as high street banks begin to compete more with specialised secured loan specialists such as Ocean Finance and Norton Finance.
A Datamonitor report indicates that the secured loans market is dominated by specialised lenders, who have been able to provide larger loans to consumers where mainstream lenders have been unable to.
Banks such as Halifax and Barclays are making successful inroads into the secured lending and Datamonitor predicts that this will encourage other mainstream lenders to increase the amounts they offer in loans as well, thus increasing competition in the market.
The Consumer Credit Act (CCA), predicted to come into force in August 2006, will remove the current 25,000 cap on regulated loans, providing more incentive for banks to raise their loan amounts.
Although this may herald an end to the domination of the market by secured loans specialists, who will face stiff competition from mainstream lenders with the muscle to offer competitive loan amounts, borrowers will have a wider choice of loans.
Amid concerns of the high level of British consumer debt, the government has boosted the resources of the National Debtline, which gives free advice to consumers who find themselves overwhelmed by debts.
Additional funding to the service will allow for more staff to be trained and larger facilities to help more people get one-on-one debt help.
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