What is the current state of play with US Loans

Tuesday, July 24, 2012

What is the current state of play with US Loans

The economic news out of the USA continues to concern observers who fear the whole world situation is still some distance away from full recovery. The US debt levels are high and unlikely to improve in an election year where the present administration is keen not to alienate the electorate.

These factors alone have played a part in reduced demand. Anyone wanting a personal loan has had to be sure of job security before spending on anything new. The recent history of credit card debt, repossessions etc has meant that there is still demand for a personal loan, if it can be approved because the interest rate available is certainly an improvement on the rates charged on outstanding credit card balances.

There was an overall drop in loan demand of 23% to $200 billion in the last quarter. Market experts expect a quiet summer on the financial front as the recovery limps along; at least there are hopes that 2012 will be an improvement on the previous two years.

The position in Europe remains a cause for concern with stories of gloom coming from many countries and their public often unwilling to accept the medicine their governments are offering.  There is traditional volatility in some of the Mediterranean Countries which face the biggest problems. What is a problem for those countries has become a problem for the whole of the EU and the USA. There is so much interdependency.

The last decade has seen a number of changes and for the USA they are almost all bad; the fall in the number of manufacturing jobs is a real eye opener with a third having vanished. There are even people suggesting that the Chinese economy will be three times that of the USA by 2040 and lagging behind India a decade further on. The USA has lost its number one status and with it a good deal of confidence.

It is no wonder that personal loan is not something that is taken on too lightly. The recent shocks will linger in the mind for years. If the lessons of being too casual about credit are learned then there will be few small crumbs of comfort.

There are still plenty of loan providers on internet because demand is still there. Traditional lenders are playing less prominent role in the personal loan market as they view market trends and the world problems with suspicion. Other providers however have seen the opportunity and are willing to look at the subprime market even though the risks are higher; so are the rewards and the subprime market is not as it was when the CDO crisis hit.

Application for a personal loan can be made online with secured loans, perhaps with real estate with equity providing the comfort for the lenders. It is more difficult to negotiate an unsecured personal loan and lenders will scrutinize the application more closely, particularly employment details because it is the monthly salary check that provides the means of making the monthly instalment payments for the term of the personal loan.

There is more caution at every level pending the signs that economic recovery is on an upward path and that no reverse will take place. Certainly the markets are taking few risks while people in employment are perhaps happy to keep their car an extra year or willing to delay the purchase of new items of furniture, perhaps spend less on holidays. Those with more confidence or in some cases more need for a personal loan can still get lenders willing to do business. It’s simply a matter of choice.

About the Author:

My name is Elina Smith and I am a professional guest post contributor.

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