Consumers wary about taking out loans
October 28, 2010
It has been reported that consumers are becoming increasingly cautious about taking out loans, despite the fact that many people are struggling with their finances and many could use the money for work around the house, to consolidate debt, make purchases, or even to fund the up and coming Christmas period.
The global financial crisis and the recession has really taken its toll on household finances over the past couple of years, and many have struggled to make their budget stretch far enough. This has resulted in people turning to their credit cards, overdrafts, and even high interest loans to tide them over, but consumers are growing increasingly cautious about taking out loans.
Lenders have seen the appetite for personal loans falling over recent months, and although many people have wiped out their savings in order to make ends meet many simply won’t take the risk of getting into any more debt. The same has happened with mortgages, with many reluctant to take out a mortgage in the current climate, which has resulted in property prices falling due to lack of interest from buyers.
The recession left many people out of work, and although the recession is officially over many are still concerned about the security of their jobs, which is why so many people are so keen to steer clear of taking out new finance.
On top of this the recent Spending Review from the coalition government has made people even more wary about taking on new loans, with the huge cutbacks likely to affect many jobs. This has once again increased fears amongst consumers, who are now fearful of losing their jobs due to the cuts in the public sector and the possible knock on effect in the private sector.
- Consumers could benefit from five year fixed rate deals A recent report has suggested that whilst many consumers are wary of taking on a very long term mortgage, as suggested by the Chancellor of the Exchequer, Alistair Darling, many could benefit from taking out
- Make sure you keep up with repayments on your secured loan In the past many people were nervous about taking out a secured loan, as the very fact that the loan was secured against the home made some people extremely wary. However, for those with damaged
- Rise in loan costs due to PPI crackdown According to a recent report the ongoing crackdown in relation to Payment Protection Insurance, or PPI, on loans has resulted in an increase in costs and interest rates for those taking out personal loans. Officials
- Little choice for those wanting longer term fixed rate mortgages Over recent months the Chancellor of the Exchequer, Alistair Darling, has been pushing for longer term fixed rate mortgages in the UK. Darling believes that longer term fixed rate deals for 20 or 25 years
- Mortgage lending sees a drop According to a recent report there was a drop in mortgage lending for the month of August, with lending levels falling by around 13 percent. These figures were released by the Council of Mortgage Lenders,
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