What you need to know
Growth in unsecured credit dipped in 2018 and 2019, with personal loans not immune despite lenders continuing to offer appealing low rates. It is impossible to ignore the effect that Brexit uncertainty has had on consumers contemplating the sort of financial commitment required to take out a personal loan. Despite reporting high financial confidence over the last year, 35% of consumers say that Brexit uncertainty means now is a bad time to apply for a loan. A resolution to this over the next year will be welcomed by lenders.
This Report covers the UK market for unsecured loans. It examines the size of the market, including a forecast for the next five years and discussion of the main factors driving the market. Major players are discussed in terms of their outstanding loan book, competitive strategies and advertising activity. Mintel’s exclusive consumer research measures ownership and interest in unsecured loans, the profile of loans already taken out and consumer attitudes towards loans, such as trust in lenders to offer advertised rates.
Products covered in this Report
This Report looks at the unsecured loans market in the UK. This includes personal loans and high-cost short-term credit, including payday loans. It does not cover analysis of business loans, or secured loans, which are typically secured against the borrower’s property.
For the purposes of this Report, Mintel has used the following definitions:
Personal loans are structured credit products, generally 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 defined as unsecured loans of value under £1,000 with a repayment term of typically less than one year.
Guarantor loans are unsecured loans where a second person (the guarantor) is responsible for paying off the debt if the person who took out the loan is unable to meet the repayments. Guarantor loans are typically available from between £500 and £10,000. This Report considers guarantor loans to be high-cost credit.
Peer-to-peer (P2P) loans are personal loans lent through a P2P platform, which matches savers and borrowers to cut out the role of banks in lending money to consumers. P2P loans are typically available from £1,000 up to a value of £25,000.
