Christmas Loans: Banks Cut Back Lending
Those who are looking to get out a Christmas loan to fund additional spending may come across a few problems in getting their secured loan application accepted. Banks are warning that they plan to cut back further on their lending criteria in the continuing wake of the credit crunch, rise in unemployment and global economic problems.
According the the 2008 Bank of England’s quarterly Credit Conditions Survey, there will be a reduction in the amount of credit available over a range of products, such as mortgages, credit cards and loans.
This is bad news for the High-Street in the run up to the Christmas period. Many consumers are already under pressure with lack of disposable income and the rise of cost of living, leading many to seek additional debt advice. Many may look to get a Christmas loan in order to afford the extra cost, but these requests could now be rejected.
There has also been a rise in the number of people who are defaulting on their loan agreement, as over 44% of lenders said they have seen an increase in the number of households who struggle to keep make repayments.
