Record-low interest rates and growing consumer confidence have seen demand for consumer credit rise. As a result, Mintel expects the unsecured personal loans market to have grown by 12% in 2015, to £35 billion. Further growth is forecast over the next five years, with the market expected to reach £50 billion in 2020.

However, with a base rate rise on the horizon, growth in demand could slow as consumers face the effect of rising costs of borrowing. Maintaining a competitive edge will be important for lenders, as challenger lenders disrupt the market with innovative forms of online lending, which continues to grow as the most used channel for arranging unsecured loans. Personalisation will be increasingly important going forward, as borrowers want products that match their individual needs, with greater levels of flexibility.

This report examines the performance of the unsecured loans market, and consumer ownership of loan and credit products. It looks at the reasons why people choose to take out a loan and consumer attitudes towards borrowing in general. It also looks at the performance of more niche providers, who continue to challenge the incumbents and consumer perceptions of the market. It explores changing consumer attitudes and the use of payday lenders, and looks into the ever-growing peer-to-peer lending market, and how this might challenge more traditional lenders going forward.

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