No change to high street providers' loan criteria for 'at least two years'

09 May 2008

Mainstream lenders are set to continue to tighten their criteria for personal loans for at least another two years, it has been claimed.

According to Ian Cornish, chief executive of the Building Societies Association (BSA), the credit markets are unlikely to recover liquidity for at least another two years.

The knock-on effect on borrowers will be that high street lenders will raise repayment rates on personal loans and deny credit to those will blemishes on their credit record.

Mr Cornish told BBC Radio 4's Today programme: "We have seen a seismic shift in wholesale markets. That is obviously now starting to spill over into the wider economy with some slowing down.

"I don't see things getting any worse from here but I do expect it will take 18 months to two years for confidence to return fully and work its way through the system."

Borrowers looking to secure finance more easily might like to consider a tenant loan, with many providers willing to consider applicants regardless of any county court judgments they may have accrued.