personal loans consolidation debt

The Deterioration of the Personal Finance Industry Makes Acquiring a Loan Much Harder These Days

The recession has been with us for over two years now and still going strong. the fundamental thing behind this recession was the meltdown of the banks that occurred.

The problem was that the banks were too greedy, and were lending huge amounts of money to people that could not afford to pay it back. In the end though, the whole thing had to come crashing down, with at least one major institution collapsing and a few of the major banks needing to be helped out by the Government.

So what happened next? With the financial world in serious trouble, the banks were forced to do something to help mend the precarious position that they found themselves in. Once the Government had saved the ones closest to collapse, the banks decided to stop lending in order to build up their cash reserves thus creating the 'credit crunch'. Also by selling off parts of their business, some of the banks were able to raise much needed cash. However, some just decided to retire from the marketplace.

Three years ago there were over 15 different lenders providing secured loans, and several more companies that were providing unsecured loans. Today there around 6 companies offering secured loans, 3 of those only coming into the market place very recently. Trying to get an unsecured loan at the moment is nigh on impossible as the lenders have tightened their belts. Most of the high street banks will only give personal loans to their own customers at the moment.

There were some quite high profile companies that closed down as a result of the crisis. First Plus was one of the first to close its doors. Barclays, who owned First Plus, called time pretty early on much to the surprise of everyone. Along with some other minor unsecured lenders, Welcome Finance was another household name to go. Earlier this year Blackhorse Finance ceased its personal finance operation leaving a big gap in the market as they were a big provider of tenant loans.

The financial industry is still trying to recover from the problems it faced. It is not all that better today as there is still a huge void in the small unsecured loans market. Things are a little easier if you are a homeowner wanting to borrow several thousand pounds and have sufficient equity in your home. Non-homeowners are still struggling to find finance if they cannot get a loan from their bank. Interestingly enough, personal loan rates are at their lowest rate for nearly two years, having tumbled earlier this year, which has generated a little competition between lenders.

One of the places where small loans can be obtained are from the Payday Loans Companies that have sprung up over the past few years helping to fill the gap left by the finance companies that closed down. Due to the complete lack of any alternative, these instant cash loans have become very popular.

So will we see a return to the somewhat carefree lending attitude of the 90's? Credit will always be in demand but I doubt that things will get back to quite such a silly level as they were at.
Pay Day Loans, Unsecured Personal Loans Consolidate Student Loans Secured Loans - Compare

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