A US-owned 'near prime' personal loans lender will cease trading, it has been announced.
Banking giant Citigroup is to stop offering personal loans to customers with poor credit records, Financial News Online reports.
The US firm is to close 49 small branches of Citi Financial, a subsidiary firm which offers loans to "near prime" customers who already have trouble with securing credit from mainstream banks.
Citigroup has been badly hit by credit crunch-related losses in recent months, and a "get fit" programme of selling off £200 billion-worth of "legacy" assets at the bank was announced by chief executive Vikram Pandit earlier this month.
Meanwhile, new research has also shown that the cost of taking out a personal loan in the UK is increasing, the Daily Mail reports.
According to the newspaper, the average interest rate on a £5,000 loan has increased by 0.71 per cent to 10.16 per cent since the beginning of the credit crunch; the interest on a £7,500 loan has also gone up to 8.88 per cent, a rise of nearly a point.
These rises should also be balanced against reductions to the base rate of interest from the Bank of England over the same period totalling 0.75 per cent: a trend which usually leads to personal loan repayments becoming cheaper. The research was compiled by financial website MoneyExpert.com.
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