Lenders more relaxed over personal loans

Lenders are becoming less strict when approving personal loans, says a Bank of England report.

The Bank’s latest Credit Conditions survey found that banks and building societies loosened their credit scoring criteria for personal loans in the final three months of 2015.

Credit scoring forms part of the assessment process when people apply for a loan.

For credit cards, credit scoring criteria remained unchanged in the final quarter of 2015, the report found.

However, the length of interest-free balance transfer periods on credit cards increased significantly, while interest-free purchase periods and credit card limits also increased.

Overall, credit availability to households increased in the final three months of 2015, which lenders put down to a changing appetite for risk and a desire to meet market share objectives.

Earlier this week, financial information website Moneyfacts reported that across the credit card market, the average 0% interest introductory balance transfer term has increased from 468 days a year ago to 590 days.

The 590 day average is the highest that Moneyfacts has recorded in its data going back to 2006.