Need a loan? Make a move before Christmas.

Posted 2007-11-30

Britons looking for a loan or mortgage should do so before Christmas, or potentially miss out. The impact of the credit crunch is being felt, with personal loans and mortgages becoming increasingly difficult to secure.
One in ten lenders has left the unsecured loans market including GE Money and Leeds Building Society. This week Hanley Economic Building Society and Eskimo Loans withdrew their personal loan offerings. Esther James of Moneyfacts.co.uk said:
“Such a large reduction in just the last month is worrying. With no signs of rate rises slowing, it’s a rather unsettled market. The credit crunch is showing its strength in the personal loan market. With less choice, a more cautious lending strategy and the impending decision on payment protection insurance sure to shake up the market, the 2008 loan market could look very different.”
The mortgage market is also feeling the credit crunch and potential customers are advised to act early. Borrowing parameters are getting tougher and lenders are making applicants wait. The Woolwich, for example, has a one-week wait, just to look at new applicants.  Katie Tucker, technical manager at mortgage broker John Charcol said:
“The credit crunch means that even in balance sheet lenders who have funds available are in no hurry to price themselves into popularity because it could bury them in business and ruin their service levels. It is vital borrowers allow extra time for applications, the temptation to delay applying until after Christmas may cost remortage customers an unexpected month on a nasty high rate if they revert to their lenders SVR while they are waiting.”

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