Tesco Personal Finance has decided to pull out of the personal loans market.
The move is an indication of how more loan defaults, caused by the difficult economic conditions, are affecting loan providers.
Tesco says all existing customers will continue to be serviced by Ulster Bank, and it is assuring customers that they will continue to get the same rate of interest. Anyone who applied for a loan up until last Friday will have their loan application processed normally.
The company is writing to all its customers to inform them of the change, but customers do not need to do anything.
Tesco currently has 3,600 personal loans on its books with an average value of €9,500.
Tesco has been known to provide one of the lowest rates of interest on personal loans since it launched the product in 2004.
Tesco Personal Finance says the halt is temporary, and it expects to be in a position to come back to the personal loan market in the near future.
Other financial products - including credit cards, car insurance and life insurance - are still available from Tesco, and new products could be launched later this year.
Tesco says that its withdrawal of personal loans has not resulted in the loss of any jobs - all affected employees have been redeployed.
