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.
No comments:
Post a Comment