| Jim Milne, chairman of Dundee Anti Poverty Forum, said many poorly-off city folk are not looking to borrow more, as those that have jobs worry how long they can hang on to them in the face of a global financial crisis.
He was commenting after a new report was published highlighting the fact lenders are now fighting to get OFF the best buy tables.
Where once lenders vied for business flaunting low rates of interest, in these hard times there are signs they don’t want to lend cash to those who may not be able to make re-payments.
One lender has even closed to new business.
But Mr Milne said while there was plenty of talk about the credit crunch and the global financial crisis, there was little appetite locally among the people he dealt with for taking on more debt.
“I haven’t come across a single person trying to get a loan or a mortgage just now,” he said.
“I think people are tightening their belts. You can see that by the sales in the shops being down and card sales stagnating and the banks not giving out loans for mortgages.
“With all that going on, I think a lot of people are waiting for the credit crunch to hit. Some people are very worried because their jobs are on the line or they have been made unemployed already.
“A lot of people are very worried and are trying to hang on to what they have got rather than go into debt. People are saying they have to live on what they have got because they don’t know what’s around the corner.”
Attempts to bolster the banks and make more money available to businesses and individuals in a bid to keep the economy moving don’t seem to be having the desired effect.
Online price comparison service uSwitch.com discovered that in recent weeks loan providers have been increasing their rates for personal loans.
Just two months ago, almost one in four (23%) of the unsecured personal loans available were less than 8% APR, today these sub-8% deals have completely disappeared, according to the uSwitch.com research.
Louise Bond, personal finance manager at uSwitch.com, said, “The current economic climate is still unpredictable and the cuts by the Bank of England are not being felt by people looking to take out a personal loan.
“We have already seen six loan providers increasing rates over the last month by as much as 2%. This has marked the death of the sub-8% best buy loan era which is really bad news for consumers trying to consolidate debts.” |
