As credit in the business and personal finance market remains difficult to obtain for many we are starting to see an increase in guarantor loans. These are effectively loans which are guaranteed by a third-party who would ultimately be liable for any loss on the loan in the event of default. So are guarantor loans the way ahead?
Despite the fact that the UK government has assisted and in some cases attempted to force additional bank lending to businesses in the UK there is great concern after business lending fell again in April. At a time when the UK economy is struggling to pull free of the recession there is a belief that unless bank lending increases to small, medium and large sized businesses we could see a whole raft of failures in the short to medium term. So why are UK banks holding back?
A number of people in the UK have been looking towards consolidation loans to try and address their personal financial problems but many people have put off taking action in the hope that the UK economy would recover. However, with the likelihood that the UK economy will not move into a boom phase in the short to medium term, higher unemployment and £60 billion wiped off the budget deficit the short-term prospects for the UK economy are not good.
The Bank of England has confirmed that Bank lending to UK businesses continues to remain weak although there has been a sharp decline in the number of bad loans which were written off by the UK banking sector. However, even those UK businesses which have managed to obtain finance in these most testing of times have been paying very different rates!
It has been revealed that many people in the UK have been defrauded out of thousands of pounds in a well-organised and well administered fraud targeted at those who are struggling financially. A number of people have reported unsolicited phone calls and text messages as well as adverts on the Internet which failed to deliver on their promises.
A survey released by the Federation of Small Businesses has today cast a very dark shadow across the UK small business arena. It seems that over 1 million small businesses in the UK are unhappy with the standard of service offered by UK banks with many dismayed by the fact that "bank manages" are often located miles away from their customers.
With the Office of Fair Trading (OFT) has, after a year-long investigation, decided not to impose pricing restrictions on high-cost lenders such as pawnbrokers, payday lenders and doorstop lenders. While there is some disappointment that the authorities have yet to step in and cap the current array of charges, with some interest rates in excess of 1000%, there was a feeling that by interfering with this particular area of the market it could reduce credit to those most in need.
The Central bank of Japan has today announced a £22 billion low interest loans program which will be made available to commercial banks in the region. Much like the UK, it is hoped that access to low cost finance will encourage Japanese banks to lend money to private businesses which are struggling to survive in the current economic environment. So will this work?
Over the last two years that there is no doubt that more and more people in the UK have seen their budgets stretched to the limit and their debts increase. Even though officially the recession is over and the UK economy is now moving back into a growth phase the situation has not improved for many people in the UK. So how do you get your debt under control?
The Office of Fair Trading (OFT) has today begun a UK wide campaign to warn consumers of the illegal activities of some money lenders. Upwards of 200,000 leaflets and posters will be distributed across England, Scotland and Wales detailing the problems associated with illegal money lenders and the extortionate charges which customers may incur.
