The availability of consumer credit will tighten in 2023, forcing customers to shop around for loans, new research has found.
According to digital lending marketplace Freedom Finance, last year saw soaring demand for financial services products and this demand is expected to continue in the year ahead.
Two in five (43 per cent) of UK adults either considered or applied for at least one financial services product in the past year, Freedom Finance said. People aged between 25 and 34 were most likely to have searched for financial services, as it became harder to source consumer lending products.
Read more: Consumer debt rose by a third in 2022
Freedom Finance has estimated that almost all UK adults now have at least one credit product.
“The fact that half of all workers in the UK looked for new financial services products in the past twelve months indicates the fundamental role the industry plays in our society, but also the opportunity for it to innovate and develop better products for customers,” said David Hendry, chief marketing officer at Freedom Finance.
“Almost all adults already have at least one credit product, but borrowers are still looking for products that suit their circumstances – whether that is to extend the borrowing or consolidate existing debt.
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“The lending market is rapidly changing at the moment and improved use of data means people are able to find better-suited products more easily and securely.
“In a tightening credit market, incoming Consumer Duty legislation is likely to drive more lenders to adopt soft search technology into their digital real estate so that their customers can explore finance options while being sure not to harm their credit scores.”
Read more: Interest rates rising at record rate for unsecured personal loans
