Secured loan lender Firstplus closes to new customers
Secured loan lender Firstplus shuts up shop
Wednesday, 09 Jul 2008 09:49
Barclaycard-owned secured loan specialist Firstplus is to close to new business.
The firm – the UK's largest provider of secured loans – came to the fore with its adverts fronted by Carol Vorderman, but has now become the latest victim of the credit crunch with 300 job cuts in its Cardiff offices.
Some 130 staff will remain to cover existing customers.
The firm stated the decision would have no impact on the current loans of Firstplus’ 128,000 customers.
Neil Radley, managing director of Firstplus, said: “In the past year we have tried a whole range of activities to develop our business but the market demand simply isn’t strong enough.
"We recognise this is a difficult time for our people and will be providing all those affected with support and assistance.”
There are now just seven major players in the secured loan market – compared with 18 last year.
However, Nick White, director of personal finance at uSwitch.com, explained he found it hard to believe low market demand was behind Firstplus' decision.
"Brokers are still reporting strong demand for secured loans," he said.
"For many, secured loans are the last resort. People take them to consolidate debt when they cannot extend mortgages or remortgage."
Mr White now predicts secured loans will become harder to come by.
"Firstplus leaving the market means there is less competition. Paragon has already increased their rates and lenders can now be more picky.
"However, don't assume you cannot get a secured loan, but be prepared to be turned down."