The personal loans market experienced another stellar year in 2014, continuing the successful year it had in 2013. Gross advances were estimated to have grown by 13% year on year, and to have reached roughly £26 billion for the full year. Over half a million more people in full-time employment and stable consumer confidence has helped contribute to much of this expansion.
The personal loans market continues to be a competitive one, with rates dropping as low as 3.9%, making loans more affordable to more people. If the base rate continues to hold at 0.5%, which is looking likely for the best part of 2015, the pool of potential borrowers will continue to grow.
The payday loans market has undergone a transition in 2014, as new regulations outline the new framework within which lenders must now operate. Remaining lenders are eager to snap up customers who have been left without a payday lender, while at the same time building a more positive image in the wake of the new regulations.
This report examines the personal loans industry, including how people are applying for loans, and how likely they are to apply for a new loan within the next 12 months. The report also includes discussions on the existing market landscape, the brand strength of key players in the market, and how that may change in the coming year. Market drivers are analysed in order to present a view on how the industry is likely to perform beyond the next year. In addition, the report includes in-depth analysis on payday loan usage and consideration, as well as peoples’ attitudes towards the place of payday loans and lenders in the market.
Report scope
This report examines the UK loans market, and includes products such as unsecured personal loans and high-cost short-term credit loans including payday loans. It does not cover analysis of secured loans, which are typically secured against the borrower’s property. Personal loans are, in the main, available to borrow for between £1,000 and £25,000 (subject to credit checks) over fixed repayment terms of one to 10 years. High-cost short-term credit loans and payday loans are, for the purpose of this report, defined as unsecured loans of value under £1,000 with a repayment term of less than one year.
For mortgages, please see Mortgages – UK, March 2014 or Mortgages – Intermediary Focus – UK, November 2014.
