3 October 2008
Soaring gas and electricity bills, rising food prices, elevated motoring costs and redundancies are causing more consumers to default on their unsecured personal loans, new research shows. According to the Bank of England's latest credit conditions survey, the increase in default rates on personal loans and other unsecured credit was higher than anticipated in the third quarter of the year. Lenders, who at the same time are tightening the supply of personal loans to households and small businesses, said they expect defaults to continue rising over the next three months. The data shows that the proportion of applications for personal loans and credit cards being approved by lenders also declined in the third quarter as lending criteria were tightened. In other personal loans news, uSwitch.com has argued that a heavy-handed approach by the Financial Services Authority is required to tackle the mis-selling of payment protection insurance.