Rising consolidated debts and increasing purchase of home improvement loans is projected to fuel the growth of the United Kingdom loan market through 2028. According to TechSci Research report, “United Kingdom Loan Market – By Competition Forecast and Opportunities, 2018-2028F” The United Kingdom loan market is anticipated to project robust growth in the forecast period due to booming online loans, rising demand for car loans, growing internet penetration, and increasing loan process automation.
The Important Factors of the United Kingdom Loan Market
In its most basic form, consumer lending involves the loaning of money for personal, family, or household spending. Unlike bigger loans secured against assets or property, most consumer loans (excluding automobile loans) are unsecured, posing a risk to both the financial institution that provided the payment and the customer who must repay the debt. Generally, consumer loans are used to pay bills, purchase commodities, purchase cars, and furnishings, or make home upgrades.
Taking out a loan to finance an automobile has grown significantly, with some even leasing cars for a specific period. Instead of buying a car with their own money, car financing has become a more appealing option. Leasing, hire purchase, personal contract purchase, or the utilization of a personal loan to purchase an automobile are all options for car financing.
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The United Kingdom Loan Market is segmented based on type, provider type, interest rate, tenure period, region, and competitional landscape.
Thousands of people across the United Kingdom are looking for various types of loans to help them finance their lifestyles. Whether it’s guarantor loans or mortgages, the number of people asking for a loan has increased dramatically over the years. Borrowing money has become the new standard as more people look for a loan. The Finance & Leasing Association (FLA) has released new car finance data highlighting further trends and performance in the United Kingdom. According to the data, new business volumes in this market increased 33% over the preceding year in November 2021.
The government has been working on various initiatives to ease customer loan limits. For instance, The No Interest Loan Scheme (NILs) was launched in September to assist United Kingdom households with rising food and living costs. The system was initially tested with 5,000 participants in Manchester to assist parents in covering the cost of food bills during school vacations. As a result of the research, 71% of participants reported they were less likely to fall behind on bills, council tax, and rent.
Based on type, the United Kingdom Loan Market is divided into secured or unsecured loans. Secured loans are those in which the borrower commits an asset or property as collateral for loan repayment. If the borrower fails to return the loan within the time frame specified, the lender benefits from the collateral. Unsecured loans are more in demand in the United Kingdom. An unsecured loan is one in which the lender cannot demand repayment if the borrower defaults.
Based on provider type, the market is divided into banks, non-banking financial companies, and other (fintech companies). A bank is a financial institution that lends money while accepting public deposits and creating demand deposits. Non-Banking Financial Companies (NBFCs) are financial firms that offer various banking services but do not have a banking license. A fintech company, on the other hand, is any company that connects to or uses financial assistance through the internet, cloud services, mobile devices, or software technology.
The United Kingdom loan market is fixed and floating, based on interest rates. Based on the tenure period, the market is divided into less than 5 years, 5-10 years, 11-20 years, and more than 20 years. Based on region, the market is divided into England, Scotland, Wales, and Northern Ireland.
Key market players in the United Kingdom Loan Market include:
- HSBC Holdings plc
- Lloyds Banking Group
- The Royal Bank of Scotland plc
- Barclays PLC
- Standard Chartered PLC
- Nationwide Building Society
- Santander UK plc
- Close Brothers Group Plc
- Tesco Bank
- TSB Bank plc
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“Increasing online loan channels and using chatbots with AI features is a significant trend expected to impact growth over the forecasted period. Rising consolidated debts, growing purchases for home improvement loans, and rising demand for car loans are the leading factors that will positively impact the United Kingdom Loan Market. Due to the wide range of loans available online to meet the specific needs of customers and the growing popularity of the internet channel, the market is growing.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.
United Kingdom Loan Market, By Type (Secured Loan and Unsecured Loan), By Provider Type (Bank, Non-Banking Financial Companies, and Others (Fintech Companies)), By Interest Rate (Fixed and Floating), By Tenure Period (Less than 5 Years, 5-10 Years, 11-20 Years, More than 20 Years), By Region, Competition, Forecast & Opportunities, 2028F, has evaluated the future growth potential of loan products and provides statistics and information on market structure, size, share, and future growth. The report is intended to provide cutting-edge market intelligence and help decision-makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities present in loan products in the United Kingdom.
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