Lender competition makes secured loan market more innovative

The fiercer the competition in any given area, the harder each competitor has to work to come out on top. This principle applies to almost any circumstance, from Olympic gymnastics to electric car development. It's equally true in the secured loan industry, and it's effects are being noted throughout the sector. 

Secured loan competition

A secured loan boom has attracted increasing numbers of providers to the industry, increasing competition in the market and pushing those at the top to work even harder to retain their position. All of this competitiveness is forcing lenders to become more innovative with the products they offer, often finding ways to reduce fees and to offer customers the most attractive deal.

Evolving products

Although the industry is some ways away from a complete, disruptive revolution, this state of burgeoning competitveness has been generating some interesting changes in the secured loans market. Companies such as UTB have recently increased their maximum loan size, while other lenders like West One have opened up in new regions (the business is now up and running in Scotland). A particularly positive change for lenders has seen some lenders begin to offer fixed rate loans without any early repayment charges. Other loan providers, meanwhile, are working to reduce rates. As of July 2018, the lowest secured loan rate available hit 3.65%.

Fresh practices

But it's not just the shape and size of secured loan products which is changing thanks to market pressures. The way these businesses function internally is also evolving rapidly, often with a view to reducing costs. Automated valuation models are booming in popularity, replacing the older drive-by valuation and full valuation models which were previously required by the FCA.

These changes are allowing businesses to devote more time and attention to income verification - a crucial part of the lending process that ensures customers have the ability to repay what they borrow. The FCA has recently applied more stringent regulations regarding income verification, reducing risk to consumers.

Take advantage of these evolving secured loans. The Choice Personal Loans team know the secured loan market inside out and can recommend the best options for you, right now.