Globally, the financial markets have been adversely affected by the credit squeeze having its origin in the U.S. sub-prime market collapse. Unprecedented increase in the default rates in the U.S. sub-prime mortgage market is the main reason behind the credit squeeze, that has virtually spread to all countries. In times of globalisation and close business relations among various economies, a big turmoil like this is likely to have far reaching repercussions across the nations.The lenders in the UK are trying to minimise their risk assumption by not entertaining the borrowers who are having bad credit problems and those with bad financial circumstances. Many of the leading lenders have already withdrawn unsecured loans from the market in order to curtail their risk. No doubt, unsecured loans are immensely popular with the Britons, but since the onslaught of credit crisis, the market for these loans is witnessing a worrying trend. The lenders have mostly withdrawn their unsecured range of loan products, making it difficult for the borrowers to access these loans. In sharp contrast, the lenders were offering loans at very relaxed terms and conditions just a year back.
Now-a-days, if you want to avail unsecured loans, you should have a good credit score as well as monthly income enough to meet the high cost of borrowing. The interest rates are on the higher side even though the Bank of England's base rate has dipped twice since December 2008.