Wednesday, July 4, 2012

Why Are Uk Banks Still Afraid To Lend Cheap Cheap Loans

Cheap loans offered for short-term or long term by the lending institutions, is a great support for the people in need of financial assistance. It is the economic climate, which determines the level of cash that is flowing in the market. With the dim economic situation, which is making the lenders to tread cautiously as well as the borrowers to fear if they would be able to get hold of funding solutions, when needed.

The Banks Preferring the Existing Customers

The loan offering culture of the UK has become quite sluggish and the banks are thinking twice before lending out their supportive hand. Mortgage lending is also becoming rare with the lending institutions acting very strictly. The surveys show how the people in the UK have not been whimsical and did not change their accounts from time to time. They remain the loyalists of a respective branch so that they are able to enjoy the various financial products in the best possible rate.

The financial institutions are judging the credit map of their existing customers and since they have enjoyed customer loyalty, these lending authorities prefer to lend out the mortgage cheap loans to the existing customer base than the newer ones at the lowest interest rates, since they know their profile. The financial products that the customers are offered must appease them. In case of funding solutions, it is the trust factor that works for the banks to offer more exclusive schemes and deals to its existing list of clientele.

The Distinctive Features of the Credit Map

The top service providers offering the financial products need to judge the market conditions and the behavior of borrowers so that they could strategize the best means to satisfy the borrowers. It is the scale of balance or the demand for cheap loans and the supply of funding credits by the lending institutions which can the lenders satisfied.

The Urge to Pay Back

Often it is the uncertainty quotient in the economy and the low bank rates which is making people to pay back their dues timely and sometimes even before time. The urge to take new advances has comparatively declined in the sphere of personal loan and other financial products. Some of the top UK lending institutions do not penalize the borrowers if they make the repayments before time, but the rise in the inclination to take the cheap loans got to increase.

Conservatism on Both Sides

It is the sense of insecurity which is playing on the minds of the lenders when they are reaching out to help people in financial distress. Depending on the existing customers is just like offering a turbo boost to the confidence level of the lenders that they are going to get back the money they are lending out. The mode of repayment and arrangement is done in such a way so that the customers do not feel the hiccups while paying back. Just like the lenders are scared and in need of assurance from time to time, that the process of repayment will be smooth, the borrowers, on the other hand, are scared, whether they would be able to pay back the amount they are borrowing.

The level of Insecurity

The insecurity factor works high in the face of the deplorable economic climate. Even if the borrowers are not into an extravagant lifestyle, still people find it difficult to make both ends meet while making up for the emergency situations, when they crop up. The short-term fast cheap loans have been one of the best resources that help the borrowers to overcome situations of financial crunch. The legal hassles involved in case of non-repayment loan cases takes considerable time to get resolved, and therefore, the fear factor works on the part of the banks while lending cheap loans.

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