October 19, 2020
- Olivia Elmore
- September 27, 2018
The rising petrol price triggered the increase in inflation in June 2018 placing additional pressure on majority of household budgets which were too tight already. The consumer price index hit 2.5% annual rate in June after being stable at 2.4% during previous three months. Fears over the no-deal Brexit triggered the pound to dive at the lowest level against dollar and euro. If we see from another angle, the UK was the slowest growing economy in G7 nations in January – March 2018; while it used to be the fastest growing economy since 2013 to 2016. Is the common man connected to these statistics in any way? The growing demand of ‘long term loans for bad credit no guarantor’ in private lending sector confirms the negative impact on common man’s comfort in managing the regular expenses and saving.
Impact of UK’s Economy on Borrowing Trends:
The one of the most recognised reasons for the slowdown is fall in property market. The outstanding residential loans continued riding high up to £1,417.2 billion in 2018; it is 3.8% higher than the figure of Q2 2017. In comparison to 2017, there is considerable 6.4% increase in new lending amounting to £66.7 billion. Comparing to gross advances in Q1 2018, there is 6.9% increase.
Sensing the alarming situation, the leading banks squeezed the lending fund; as a result, the unsecured loans in mainstream banks dropped by 38.7% in Q1 2018; it is the largest drop since 2007. The consumer has to meet the funds requirements in one way or other; therefore, rush at private lending agencies increased in 2018. As of today, majority of bad credit borrowers are applying to direct lenders even without trying at mainstream banks or other financial institutions. The attractive and big promising advertising by the direct lenders for offering ‘loan for bad credit with no guarantor no fees’ is also encouraging the employed, unemployed, small business owners, self employed professionals etc to prefer private lending that is fast, hassle free, transparent, flexible and supportive.
Why Do More People Seek Bad Credit No Guarantor Loans?
All the lenders have become more than ever before cautious due to growing concern about rising level of unsecured personal debt. The credit conditions for the consumers at high street banks have become more tight resulting high denial rate. Therefore, the bad credit history borrowers instead of wasting time in exploring the possibilities at mainstream banks approach the direct lenders. The top borrowing reasons identified in the UK are – to buying gifts, holiday tour, car buying, debts pay offs, Home renovation, managing monthly expenses, managing fuel/transport costs, buying luxury items/treats, home emergencies, and wedding etc. Getting loan from a mainstream bank without guarantor for any of this reason is almost impossible for a person having bad credit score. The majority of people know the cost difference; still, on the time financial help means more than the cost. The good numbers of borrowers don’t know even the APR they are paying but they are satisfied because they got the quick funds when they needed that too without sharing personal financial conditions to anyone.
Are the Bad Credit No Guarantor Loans always costlier?
The most of first time borrowers have misconception that no guarantor bad credit loans are too costly to afford; it is not so. The cost justification always depend upon – ‘how much important is the financial help? The intense competition in private lending marketplace doesn’t allow the genuine FCA registered direct lending agencies to charge more than the rivals. The online availability of direct lending agencies keep the options opened until the last moment to drift at other lending agency in case of feeling being cheated. FCA has put several caps on the permissible lending charges to safeguard the borrowers’ interests. Yes, exploring the options, comparing the deals, and making the selected one personalised are the essential task every borrower must complete before signing the deal to make the desired loan cheaper.