Research from Freedom Finance, one of the UK’s leading digital borrowing marketplaces, reveals the leading challengers and neobanks added over £1.5bn of capacity to the UK’s unsecured personal loan market in 2022. 

The analysis reveals that a basket of challenger brands and digital-only lenders increased unsecured personal lending to consumers by over £1.5bn^*, an increase of 34% on 2021’s reported figures. That growth far outstrips the Bank of England figures for non-credit card consumer lending, which grew just 5% in the 12 months to December 2022**.

At the same time, Freedom Finance revealed that demand on its own platform is 50% higher now than at this point last year.

As demand has increased so too has the range of people using the platform. In 2022, both the size of loans applied for and the average household income of those applying for loans increased by 9%.

Much of the increase can be accounted for by new users, with higher incomes, coming to the marketplace.

This trend reflects the increasing demand for personal loans from households that didn’t previously use them, such as those looking to consolidate other more expensive types of short-term debt, and the growing awareness and popularity of digital loan search platforms, like Freedom Finance.

Customers who use Freedom Finance are able to search the widest panel of unsecured loan providers on the market. Its proprietary technology is dedicated to helping consumers find the best credit offer, in the easiest possible way, without damaging their credit scores.

On top of its direct-to-consumer services, Freedom Finance’s embedded finance platform integrations with brands such as Argos, ASDA Money, The Co-operative Bank, Creation and The Very Group help millions of customers find the best financial products available to them.

Emma Steeley, Chief Executive Officer at Freedom Finance said that tightening credit conditions are prompting more people to use soft credit search technology to shop around for competitive rates.

“Despite the worsening credit conditions at the end of last year, 2022 still saw significant increases in demand for credit on our platform and across the market. As loan sizes increased at the same time as credit conditions tightened, we have seen new lenders serving more affluent households shopping for credit products through our proprietary technology platform.

“We have also seen an increase in the number of people who have missed payments in the past using our platform. Because our soft search technology reduces the risk of people applying for loans that they are not eligible for, this is helping to protect their precious credit scores.

“These new users demonstrate the appeal that fintech platforms, like Freedom Finance, hold for increasingly savvy credit customers who are comfortable using digital tools to access the best financial products available on the market.”