Marks and Spencer Money has received the award for best unsecured personal loan provider by Your Money Direct.
It was felt that Marks and Spencer provide several highly competitive unsecured personal loans as well as making it easy for potential customers to work out repayment amounts and select the option that best suits them. M&S also received awards for their credit cards and travel insurance showing just how focused they are on their financial services offerings.
A Marks and Spencer spokesman made it clear that the award was very special to them but that it did not mean there would be any complacency in future. It is always the aim of M&S to deliver great products that offer real value for money and this will continue.
Looking at the base rate being held unchanged this week Legal and General are forecasting a difficult Summer for borrowers as lenders take a cautious approach.
It is the view of Legal and General, as well as many other observers, that financial institutions went overboard with lending when money was cheap and easy to get hold of. Now they are going overboard the other way by being ultra cautious when lending to anyone.
Consumers will hope that something shifts in the market to free up money to cover general living expenses in some instances, where people have borrowed to maintain a standard of living and can no longer gain access to credit. Legal and General are not expecting that to happen as the cautious approach is maintained.
As the pressures on global credit increase so personal loans are feeling the squeeze, with some rates going up by around four percent, though Eskimo Loans rose by only 1 percent.
In a week when large numbers of lenders thought the time was right to increase their personal loan interest rates the consumer saw how the global economy was affecting them at a personal level. As the banks fight to maintain lines of credit and look to lend money only to those with the lowest perceived risk so interest rates are bound to rise to cover the costs of bad debts.
The worry is that this can cause a self-fulfilling prophecy, with consumers facing increased interest rates they have to pay more out each month, which leads to them potentially struggling to make repayments and then becoming a bad debt. On a purely statistical basis though the lenders will recoup more in extra interest overall than they will lose in bad debts, so they feel their actions are justified.
As mentioned, against a backdrop of some quite large rate increases the move by Eskimo Loans to add just one percentage point to their basic rate was seen as a reassuring step by their customers. They can deal with this level of increase though would not like to see many more on top of it.
