The availability of secured loans has fallen further over the last three months, providers have conceded.

In its quarterly poll, the Bank of England has contacted a number of financial institutions to ask them about the state of loan availability as the country continues to struggle with the credit crunch. In a general overview, the lenders said that the amount of loans and other forms of secured credit on offer had been constrained more than they had anticipated in the three months leading up to the end of September. And while consumers may be hoping for some good news in the wake of a wave of bank collapses and buyouts, the Bank of England reported that most lenders predict a further tightening in the credit market in the next three months.

So too, personal loans and credit cards are forecast to become harder to get hold of in the final quarter of 2008, with the falls witnessed between July and September largely occurring within expectations.

And it looks like the credit crunch will not stop at putting the pressure on consumers finances, as most lenders anticipate that businesses will find it increasingly difficult to get hold of loans for new ventures as the reticent attitude towards financial risk continues to pervade the economy on both a national and global level.

However, while fewer loans will be available for both businesses and consumers, it seems that as people grow more concerned about reining in spending, the appetite for new credit is diminishing. According to the lenders, there have been sharp falls in the number of consumers applying for secured loans for house purchases in the three months to September. Furthermore, banks expect that people will grow more averse to taking on new debt as the end of the year approaches.

Indeed, it seems that more Britons are struggling to keep up with their existing repayment obligations, as the Bank reported that lenders have seen a rise in the number of people who defaulted on loans and other forms of credit during the third quarter of the year.

For those who are finding it difficult to keep up with various spending commitments as household finances are stretched by rising costs, taking out a debt consolidation loan may prove an effective way to avoid the risk of defaulting. By entering into an agreement with creditors, people may be able to stretch repayments over a longer period of time, thereby reducing the chance of being caught out by growing financial demands.

While the overall number of new applications for loans has decreased, the Fair Investment Company has pointed to data showing that a large number of Brits are still depending on credit to see them through each month. In total, the average consumer was said to owe 5,886 pounds to various credit cards and loans providers in August, amounting an increase of more than 1,000 pounds per person over the course of a year. Further findings from the group showed that men were in 33 per cent more debt than their female counterparts.

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