<b>London (Online-unsecured-loans) February 12, 2008:</b> Lenders are now reluctant to offer unsecured personal loans, and the loan market is following this "worrying" trend. According to estimation, the number of unsecured loan providers fell by 10% in November. The global credit crunch, loan defaults and higher interest rates can be blamed for this disaster.

Recent research suggests that a lot of Britons are struggling to manage their existing debts as it has been increasingly difficult to borrow money. Around 38% of the people who applied for a new credit card in the past three months were turned down, while 19% had applications for a new personal loan rejected. In addition, 6% of consumers had witnessed their credit limits cut. Credit crunch has made lending and borrowing scenario miserable.

Some of the leading lending agencies had already stopped offering loans without any security in the past few weeks. Lenders have also withdrawn their product ranges. According to Esther James, personal finance analyst at Moneyfacts, "Such a large reduction in just the last month is worrying.”

The credit crunch is showing its strength in the personal loan market. Lenders who have stayed in the market have been putting up rates and tightening their lending criteria since last three quarters. This can be understood from the fact that the average interest rate on a £5,000 loan over 3 years taken out in August was 9.11% and the statistics rose with in five months to9.76%. This represents an increase of 0.65 percentage points, despite the Bank of England keeping interest rates on hold during the period. Credit card interest rates and fees have also been following the increasing path.

More than half take home salary is now eaten up by debt repayments, but the ability to repay and manage debt is clearly faltering. Banks are now being forced to write-off vast sums and, as a result, they are tightening their lending belts.

For additional information on the news that is the subject of this release (or for a sample, copy or demo), contact Webmaster or visit http://www.online-unsecured-loans.co.uk/