With the global credit crunch that began during July of last year still wrecking havoc in the world's financial markets, more and more consumers are finding it difficult to obtain affordable finance.
Getting approved for an unsecured personal loan has become especially difficult within the past three months, with lenders either hiking up their interest rates or completely withdrawing their products from the market. In fact, within the last year, for every month that has passed, a loan provider has dropped out of the market.
Even though the Bank of England has taken measures to ease the burden of the credit crunch by lowering the base rate twice since the begging of the crunch - lenders are still finding it difficult to justify lowering their interest rates.
For instance, the average APR during July, prior to the crunch was 6.6%, compare this to the current average of 7.34% and it's easy to see the effect the crunch has had.
This is down to the high interest rates on the money-markets, where banks obtain funds to back up their borrowing.
Many lenders are now taking consumers credit ratings into account more so than they where this time a year ago. This has dramatically widened the gap between those who were approved or disapproved because of their credit rating over the past year.
With all of this said, if you are on the look out for a personal loan of £20,000 or more though, you may actually find it works out cheaper than it would of a few months ago - with the typical interest rates for such loans dropping by 0.1%
One of the measures banks are taking to combat their losses is by offering high interest savings accounts, which benefits both savers and the banks. This is because the customers should get a decent return on their savings at the end of the savings' term and the bank will have more funds to help offer affordable finance.
Getting approved for an unsecured personal loan has become especially difficult within the past three months, with lenders either hiking up their interest rates or completely withdrawing their products from the market. In fact, within the last year, for every month that has passed, a loan provider has dropped out of the market.
Even though the Bank of England has taken measures to ease the burden of the credit crunch by lowering the base rate twice since the begging of the crunch - lenders are still finding it difficult to justify lowering their interest rates.
For instance, the average APR during July, prior to the crunch was 6.6%, compare this to the current average of 7.34% and it's easy to see the effect the crunch has had.
This is down to the high interest rates on the money-markets, where banks obtain funds to back up their borrowing.
Many lenders are now taking consumers credit ratings into account more so than they where this time a year ago. This has dramatically widened the gap between those who were approved or disapproved because of their credit rating over the past year.
With all of this said, if you are on the look out for a personal loan of £20,000 or more though, you may actually find it works out cheaper than it would of a few months ago - with the typical interest rates for such loans dropping by 0.1%
One of the measures banks are taking to combat their losses is by offering high interest savings accounts, which benefits both savers and the banks. This is because the customers should get a decent return on their savings at the end of the savings' term and the bank will have more funds to help offer affordable finance.
Source: EzineArticles.com/?expert=Liam_Gerken
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