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Your guide to all Personal loans
Personal loans are suitable for those with any type of credit rating and are useful in times when you need a debit card when you don't have a bank account.
How some personal loans are being written off
New data from the Bank of England has suggested that the amount of money that financial institutions are writing off as ‘bad debt’ has soared significantly during the recession.
Some £1.6 billion was written off by banks between July and September 2009 – after many had to accept that because of the difficult financial climate, there is uncertainty over whether some of their customers will ever pay off their debt fully. The £1.6 billion paid off was believed to be double the average of £800 million paid off on average in each of the two quarters previously.
These figures represent the debt on credit cards which banks confirm will probably never be paid off by debtors. The money which is set aside by financial institutions as a protection against any potent assets which they have to write off also covers mortgages. It is estimated that £1.04 billion of mortgage assets were written off because of customers who were defaulting frequently on their payments.
As you can imagine, the impact which this has had on the enthusiasm of the banks to lend money has been massive. Now – there are more checks than ever for those who are applying for personal loans, with those who have bad credit less likely than before to get the money which they are asking for.
Some advisors believe that looking to the banks can be the best place for personal loans, particularly if you are already a customer with them.
David Black is from the consultancy firm Defaqto. He had this to say: “HSBC, NatWest and RBS will only offer new credit cards or unsecured loans to their current account customers.”
Experts have also been scratching their heads and wondering why the statistics of this year’s write-offs are so much higher than in previous years. According to insiders, banks are looking to place all of the bad news in one period, in order for the future to look a lot more optimistic for investors who may be placing their money into the institutions.
As you can imagine, those who are looking for credit cards will find that the interest rates will probably not work in their favour as much as in the past. The advice for those who are looking to borrow is simple: keep up with your payments and don’t get to the stage where you may be defaulting on what you owe.