Borrowing money has become incredibly difficult in the last five years. But, the prevailing attitudes to borrowing money from consumers has changed too. In the main, Banks have become somewhat more resistant when it comes to lending. Prior to the economic crash, credit was readily available. Financial institutions in general are less willing to lend, should they not have all of the facts at their disposal along with effective research.
It seems that since the 2008 economic crash, more people are concerned about money matters. They are less prone to borrowing. But, credit doesn’t have to be something that you are scared about. In fact, borrowing can assist you in times of need.
Following the recession, consumers chose to shy away from borrowing. There appears to have been a dramatic shift in attitudes when it comes to matters regarding money.
More people are concerned with responsible borrowing. They ensure that they have a structured plan in place to pay back what they have borrowed. With interest rates being at an all-time low, now could be seen as a good time to borrow, but being responsible with money means only to use credit when you need it. After all, you don’t want to come to rely on credit.
The change in consumers attitude has resulted in them being savvier with their cash and the interest rates payable on their savings are now more important than ever before.
The Bank of England has said that it will keep interest rates low to avoid the pitfalls of the previous economic recession. In order to encourage growth, low-interest rates are needed. For borrowers, they can obtain low rates of interest, which is what the majority of consumers want.
With High Street banks restricting the amount of lending that is taking place to individuals and businesses, this has resulted in the rapid rise of ‘peer to peer’ lending. Peer to Peer lending matches up people who are willing to lend, to people (individuals or small businesses) who want to borrow.
What is clear is that lenders are beginning to relax their lending criteria again and lend to individuals whom 1-2 years ago they would not have lent to. How far they will relax their criteria going forward remains to be seen.