carcreditblog.co.uk

So with the banks being as unfriendly since I can remember, just how easy is it to get a loan at present and what is the difference between unsecured and secured loans? Well, in answer to the first question; very difficult! As things stand, even those with a good credit history can find it difficult to be successful in a loan application. Those with a poor or bad credit history are extremely unlikely to get a sizeable loan amount but even those of a smaller value are more likely to be at extortionate rates APR wise. In the banks eyes it is all about the risk. Maybe then they should have thought about this before they were lending extortionate amounts of funds to virtually any applicant over the last few years. Maybe then the financial economy wouldn’t be in such of a state. Anyway, moving on….. The difference between an unsecured loan and a secured loan is that one means having a person’s property written into the contract whereby if the repayments are not kept up to date, the owners’ property is at risk of being repossessed. Banks love these types of loans because they know that should things not go to plan for the loaner, they could find themselves having access to a property, which as we all know is a very good long term investment. In summary, if you have a good credit score then the chances are that whilst a loan may still be quite hard to come by, the chances are there will be something available to you. Those with bad credit though will find things much harder to come by. This is until things pick up in the economy (hopefully).

It seems that whilst the adversities over the last six to 12 months have saw people hit with financial stress, the Christmas period is maybe showing slight signs of an improvement in the economy. Is this because people have been saving their money since the start of the year with Christmas in mind? Or is it due to the fact that more credit is being made available to people applying for loans / finance etc? My opinion is that it may well be a combination of the two but also I think that government pledges and new regulations allowing a bit of breathing space for homeowners has certainly helped also. The sheer fact that mortgage lenders are showing more understanding to their customers instead of entering into heated exchanges has no doubt had a positive impact on peoples’ cash flow and savings. Also, what must be noted is that more and more retail stores and shopping companies are promoting their offers as a way to entice people to their business. Whilst the cost of utilities etc has definitely gone up, fuel and food has saw a decline, which again could well have contributed to peoples’ finances. The car market seems to have picked up as well, albeit still at a heavily reduced rate compared to last year. One hopes that the start of 2009 will see further additions and improvements to the banking and mortgage industries, which will in turn help the general public and provide a better range of credit options to those who have found themselves get into debt.

There is no doubting that there seems to have been some kind of credit crisis that has hit the world’s economies over the last 6 to 8 months. But, just how much has it affected you? Maybe you are someone who has lost their job as a result of cutbacks by employers or maybe you are someone who has excelled and actually earned more money this year to date than during the same period last year? Fortunately for myself I am still in employment, for how long I do not know, but others close to me have felt the force of being made redundant – especially those in manual labour jobs or trades. However, are things as doom and gloom as the local press and national news report? I have recently begun to question this. Whilst no doubt there are those that have been heavily affected by the lack of credit etc, it still seems to be business as usual for many companies – albeit at a lower rate of operation. Whilst I am not questioning whether there is indeed a financial crisis, what I am unsure about is whether these companies were operating at normal levels to begin with. My hunch is that they were not and so their results over the last century or so have been too high. However, whilst operating at such heights, this then set the expectation, which has therefore been severely hit upon the banks crashing as they have done. Maybe then from this inaccurate form of running these companies, it has ultimately cost many people their jobs and lifestyle? The debate could go on and no doubt will do so but one has begun to question just how so many say they have been affected when in my opinion, it could have been prevented had people not been living beyond their means and also that companies took more responsibility for a more accurate focus.

It was announced on the national news yesterday that car sales have apparently decreased by a whopping twenty five percent due to the credit crunch / crisis. The month of October 2008 was the worse month for sales numbers in over seventeen years. Whilst this is no doubt a bad sign, surely the fact that Christmas is only round the corner has played a big part in the sales decline? Surely the last thing on peoples mind is to upgrade their car or to use credit to get a car? In terms of new cars the statistics showed that there was a twenty three percent decrease compared to the October 2008, which makes for bad reading if you are a car dealer. In fact, with the way things are going at the moment for the car industry, it is being predicted that the sales in 2009 could decrease to the lowest levels since 1995 with less than two million cars being sold. My personal opinion on this is that the banks who are no longer lending people the finance to buy a new car are the biggest contributors to the low number of vehicle sales being recorded. If the banks were to provide more money to the various lenders then I am pretty sure that the automotive industry would benefit a great deal as people will then be able to afford to buy. The sooner this is done the better it will be and the manufacturers such as BMW, Mercedes and Jaguar etc will be able to rest a lot easier. With more credit available, more cars will be sold – it is as simple as that. This is because many people rely on such financial incentives when purchasing and so to take that away from them is bound to have a negative impact on business.

Like many of the people in the country, I am also feeling the effects of the so called crunch. However, there are a few things that each of us could be doing in order to get through these difficult times. For example one of the bits of advice coming from the people in power is that we should try to pay off our high interest debts as a matter of high priority. An example of a high interest debt could be in the form of credit cards or car credit agreements etc. This is being emphasised due to the instability in current employments and so in the unfortunate event of someone being made redundant, having these debts settled now is a must. If one loses their employment they will not be able to afford the repayments on such loans and so this could result in prosecution. With the chance of obtaining a pay rise at work also being slim, now is the time to use what money you have to pay off any outstanding balances. Now I am sure that some of you may be thinking that such measures seem impossible given your own current financial situation. If this is the case then maybe consider getting a 0% credit card that you can use to pay off your debts and have the security of knowing that no interest will need to be paid for a set period. It also offers some time so that the economy can try to straighten itself out. Hopefully at some point in 2009, things will start to look up again. The purpose of such tips like the 0% credit card though is to pay off your current credit debts and not to increase the amounts that you owe. I am sure it is very tempting to buy personal items or gifts but that s not the answer moving forward.