Personal Loans – Present and Future

More and more people are deciding to borrow. The statistics show that the level of personal debt in the UK is rising at among the highest rates in the world. This is occurring as more and more people are asking themselves, why wait for the things you want when you can have them now and pay for them later. Not only is this fuelling economic growth, but also giving people more options. It is also a matter of concern to some who fear that consumers will not be able to afford the huge amounts of debt that are being racked up.

Why An Increase In Borrowing?

The factors that are allowing people to borrow more and more are generally identified as the increase in house values, and expected increases in income. Many people are confident enough to continue borrowing because they know that all this debt is backed up by the increasing value of their home. This is also what they secure the loans against. This kind of debt is very safe from the point of view of lenders, who have their loans fully secured and also borrowers, who can get very attractive conditions and low interest rates on their credit because it is so secure.

The Future’s Bright

The other factors that are allowing UK consumers to continue to borrow are their age, optimism and future prospects. The UK has a young and educated work force many of whom have good future prospects.

Banks are very willing to lend to university graduates and young professionals on an unsecured basis due to the faith they all place in the future earnings of these borrowers. The logic is that because of their rising income, these borrowers can afford more debt.

Benefits for Borrowers and Lenders Alike

These loans therefore seem to be benefiting both lenders and borrowers. The lenders are happy because they have a good supply of borrowers who have good prospects of repaying the loans. From the borrowers point of view, the loans allow them to make investments now, in the things that they will be able to afford later. This allows them to take advantage of the higher earnings and higher house values that they are experiencing.

What is the Money Being Used For?

With evidence showing that much of this borrowing is going towards funding home improvements, further education, and business start ups, it would appear that much of what is being borrowed is wisely being invested. It makes sense therefore, in many instances, to take advantage of cheaper credit that is available now and use it to invest in the future.

The Future Outlook

With interest rates still at an incredible low rate the population will continue to borrow. Credit is cheap and compared with a decade ago, is extremely easy to come by. This has a lot do do with the internet and online loans and credit card comparison sites, much like the one you are on now. These sites showcase some of the best offers available without you having to pick up the phone, listen to sales flannel or visit a financial advisor.

However, the future scenario is not as rosy as many of the population would hope. Depression can strike at any time (I hate to be a gloom monger!), it is advisable that you are prepared for any negative financial times with a nest egg. Our advice? Never rely on anyone but yourself.

For more information on loans visit UK Loan Store