Consumers More Reluctant To Take Out Loans
The effects of the credit crunch and the recent economic down turn has had a huge impact on not only the UK economy as a whole, but also on the majority of people living and working in this country.
A large number of people have been affected by the current recession, whether it has been simply seeing a slight slow down in their work, all the way through to more dramatic events such as losing their job, of even having their home repossessed due to not being able to maintain their monthly homeowner loan repayments.
It would appear that the recent economic slow down has shown many individuals just how vulnerable they really are and according to one expert, people are now becoming far more cautious about their financial situation, particularly when it comes to thinking about applying for a new personal loan.
Adrian Coles from the Building Societies Association (BSA) commented that a large number of individuals are now reluctant to commit themselves to the prospect of additional regular monthly loan repayments, particularly for luxury items which they do not actually need. He likened the situation to waking up with a hangover after a big night out and saying “never again”.
The latest figures from the Bank of England also show that the number of new loans is continuing to fall, with the annual growth rate of consumer credit falling to 3.2 per cent in March this year, with equally low expectations for April. Meanwhile, consumer group Credit Action has warned that we are by no means out of the woods yet and has predicted that personal insolvencies and bankruptcies could continue to rise throughout the year, possibly even reaching a level of 435 every day.
It is commendable that people are taking a more cautious approach towards personal loans, but to use the hangover analogy again, once the headache has cleared most of us are likely to go back to the pub!
