More bad loans predicted for the early part of 2007
A number of banks and building societies in the UK are predicting that there will be a rise in bad debts and loans in the first quarter of 2007. The situation with bad debts has already spiralled out of control according to some experts, with some of the highest bad debt figures in the UK in 2006. This is thought to be partly due to the level of consumer debt in the UK, but also due to the wide range of companies sending out glossy advertisements that seem to offer borrowers an easy way out through IVAs and debt management plans.
According to around a third of banks in the UK as well as about seventy five percent of buildings societies, there will be a rise in the level of bad debts in the UK during the first quarter, and these predictions have come through PricewaterhouseCoopers. A spokesperson from PWC also added that the financial industry had already seen five financial quarters in a row where bad debt levels had risen.
He stated: "We know there has been a problem with bad loans rising in 2006 and… one third of banks are still saying they think it will keep rising because of the level of personal insolvencies." He also added: "Traditionally the main reason for people defaulting on loans is divorce or unemployment but this time people are unable to pay their debts because they have simply borrowed too much."
He went on to state that banks and financial institutions in the UK had major concerns over the levels of bad debt that were present in the UK, and that in many cases the wrong type of consumer was being put through an IVA arrangement inappropriately. It is thought that around thirty thousand Brits could become insolvent in the first quarter of the year.
Alisdair Milton
17th January 2007
More Information:
- What is Different about Bad Credit Loans?
These days, banks offer a range of products and services designed to meet the needs and wants of all their customers. Many branches will have a different advisors and customer relations managers who are assigned to the different customers of the bank.
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We all like to think of ourselves as fairly responsible and trustworthy people, especially when it comes to financial commitments. But the fact of the matter is that some people are more reliable and responsible than others and banks and other lenders know this.
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Is it possible to obtain a loan if you have a poor credit score or even if you've declared bankruptcy? The answer is yes. However, not surprisingly, the loans available will have higher interest rates and restrictions that are more stringent.
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If you are considering a loan and you have bad credit, you will be a higher risk than other loan applicants, but what steps can be done to lower this risk?
