Thursday 6th December 2007
Figures from Moneyfacts show that ten per cent of all personal loan products were removed from the market during November.
The market analyst notes an increasing reluctance among lenders to provide unsecured credit to their customers.
Among those to "bite the dust" are Hanley Economic BS and Eskimo Loans - the latter of which was funded by Northern Rock, says personal finance analyst Esther James.
Liverpool Victoria, GE Money and Leeds BS all withdrew from the market earlier in the month.
While the immediate effect could be down to the credit crunch and sub-prime lending crisis which began in the US, the future might still not be so bright for the unsecured loans market.
Issues which have hit lenders recently - such as tightened regulation from the Financial Services Authority on the sale of payment protection insurance (PPI) could be set to strike again in the coming months.
"Anyone considering a personal loan might be advised to act sooner rather than later," Ms James asserts.
"With less choice, a more cautious lending strategy and the impending decision on PPI sure to shake up the market, the 2008 loan market could look very different."
Moneyfacts analyst Lisa Taylor recently observed that Northern Rock was among the first to tighten its lending criteria as the credit crunch began to have an effect.
The lender added to this by improving its line-up of savings deals, with elevated interest payable on the Silver Saver and Tracker online accounts.
Ms Taylor deemed the rate rises as "a clear sign they are keen to win back some much-needed savings balances".
"While Northern Rock is not alone in the loans market, the withdrawal of its credit card to new borrowers - aside from the market-wide increasing of fees - is the first sign of the credit crunch affecting this market," she concluded.
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