The economic downturn has inevitably affected pretty much every industry with the financial sector not surprisingly baring much of the brunt of the recession. With more unemployment people have no income or collateral on which to secure their loans, meaning a dramatic drop in applications since 2007.
Lending Market Declines by 90% in Five Years
Estimates suggest that the lending market is valued at around £350million per year at present, which is a tenth of where it stood before the recession took hold. Experts predict that the industry will never quite reach the heights that it did previously as a proportion of the total financial market but companies should not necessarily see this as a danger. If the economy continues to improve then a two or three fold growth is definitely achievable which would spell good times for lending operators.
Due to the aforementioned economic factors, borrowers are far more sensible and realistic. As individuals have less money to play with as well as the fact that high street lenders are far less likely to pay out – the public are far less likely to take out secured loans that they will struggle to pay back. The financial doom and gloom also means that as a rule, consumers are far better informed about debt and money problems than they were a decade ago.
Why Take a Secured Loan?
In a recent interview on a reputable mortgage website, Stuart Aitken who is Chief Operating Officer for Masthaven Secured Loans discussed the above factors and also explained one of the better reasons for deciding to take out a secured loan. Debt consolidation is the most obvious reason – with debt reschedule proving to be a good short term tactic when faced with financial problems. This may not necessarily help out greatly in the long run but as Aitken says; “You manage your finances today with an eye to the future, but mostly it is about how we are doing now”.
To Borrow, Or Not to Borrow?
Although borrowing money and then having to pay interest on this is never the perfect way to proceed, it is something that can help during times of monetary woe. If done sensibly and in an informed manner then it can provide a solution and give individuals the freedom to live a relatively stress free life – there is a range of forums and financial advice websites available for those looking for more information.