Articles > Increased Loan Competition

December and January times are the busiest times of the year for money lenders; those consumers wanting to recoup after the major spend at Christmas time and the rush for those bargain holidays in January may need a loan to pay for it all.

With the loan market increasing all the time, competition is driving rates down. With the lowest rates reaching 5.5%. This applies to loans between £1000 up to a maximum of £30,000. However most lenders save their best rates for customers applying for £7000+.

As many people are still paying off their Christmas debts the attractive rates of this seasons loans will no doubt attract many people to consider applying for a loan or possibly refinancing.

In the coming months the selection of loans on the UK market is due to increase in choice as many financial companies look to enter the mortgage-lending sector.

Within the next six months numerous high profile financial companies, which currently do not offer mortgages to customers have made plans to introduce their own versions of mortgage deals to homeowners, buy to let investors and first time buyers. This move looks advantageous to borrowers as competition increases between lenders.

The game of financial tennis looks set to start as these new deals plan to undercut current mortgage deals in order to gain a share of the market, which in turn will force current lenders to up their game and offer better deals to their current customers to stay competitive.

In order to gain market share the new firms are going to try marketing themselves as a different type of lender, stating that their propositions will offer higher standards of service and better technological security.

However their new main point of attack will be price, simply because they can afford to do so, due to not having to maintain a previous number of existing mortgages.

We can expect as many as six new lenders to launch their new campaigns within the first half of the year, which will inevitably crowd the mortgage market. This spells bad news for existing lenders but good news for borrowers looking for a good deal.

Borrowers with adverse credit may even benefit from these new lenders. Although they will inevitably still have to pay higher rates, there rates could fall due to increased competition.