How the UK loan market works.
The UK loan market is much broader than it was a decade ago, because of shiny new banking products from internet lenders and supermarkets. For many consumers these put the banks in the shade, but for specific lending needs high street banks are still a good bet.
The UK loan market has changed quite dramatically in the last 10 years. Two upstarts have appeared to shake up the cosy UK loan stalwarts- the high street banks. They are the internet banks and supermarkets.
Internet banks cut costs by only lending online- they don't have branches to support. They also introduced the concept of flexible banking and flexible lending, with innovative products which allow you to borrow within a limit largely what you want when you want, and to vary the repayments to suit your needs.
Unfortunately, internet banks had to establish their own brands, and despite offering great deals weren't necessarily very successful. The big supermarkets realised they already had a strong brand image and a branch network which didn't need much additional work to provide banking products. So, now you can pop into your local Sainsburys or Tesco and pick up a bank loan.
This means the UK loan market is far wider than it used to be- and if you're an ordinary borrower you can expect a highly competitive rate of interest (don't forget- when banks ruled the roost you were likely to borrow from the same bank who held your cheque account- and that meant there was no competitive pressure either!)
There is a big "But" though. If you don't fit the mould- you have adverse credit, or specific borrowing requirements, your bank is still more likely to lend a sympathetic ear. The supermarkets offer a low-cost, one-size-fits-all service. If that's not what you need, these recent advances in the UK loan landscape won't help you one jot; so don't write off the banks entirely. At 12% for example, they're still better to deal with than many debt consolidation firms, who should be your last port of call in an emergency.