The pandemic has already left its scars on the UK economy. There is slow advancement going on when the current war in Ukraine has adverse effects.
As a result, the economic pressure will increase largely. The country is facing high inflation rates this year. The figures are quite surprising as they show the maximum increase in the last 30 years.
Here is a tubular representation of how growth has slashed since 2021 and could become worse in 2023.
The UK government are taking initiatives to correct this ongoing crisis. However, it is perilous to take out money by applying for loans without a guarantor on beneficial for you. The authority will need to increase the interest rate to beat inflation.
The horrifying picture of the money market is enough to give you nightmares. It indicates that debt levels will keep increasing along with interest rates. Debt figures must come within limits.
Upcoming recession is the recent forecast indicating its impacts on the global economy. You might have to pay more interest if you borrow money in this scenario.
Food and energy costs will hike to tackle the current war situation. It adds up to the already existing problem of increased rates to beat inflation.
Keep reading this blog to enhance your knowledge. You will have clarity while deciding on this crucial matter.
An outline of the ongoing market crisis
If you are someone who borrows without caring about various factors that directly or indirectly influence the financial market, you might be making a big mistake.
You must have an overview of what is happening around you to make the correct financial decision. As per assumption, the future market conditions will remain volatile for five years. Please note that:
|UK inflation will average above 3%It is predicted to continue for five yearsThere are 70% chances that it will happen
Will recession come into the picture?
The growth of the economy is quite depressing. It ranges between 2% to 4% every year. In this scenario, a recession is a possibility.
It is not shocking if a recession has already begun. What will happen then? As per the current forecast, it can cause the removal of £100 billion from the national GDP.
The potential impact of such a recession resembles a lot of that in 2008. However, the reasons triggering the recession are totally dissimilar in both cases.
Is it going to be a hurtful decision to get a loan?
The current statistics of the interest rates might disappoint you. However, you can still make it to affordable rates by applying for loans with direct lenders.
You can fetch diverse offers from lenders by specifying your requirements. Then, you can stack each offer against the other to see which one is best suited for your budget.
You can even do a simple calculation using the slider available on the lender’s website. It will indicate the interest rate once you select a particular amount. In addition, get to know about the repayment structure during this calculation.
You can break down the entire borrowing process and prioritise your budget to get the best rates. The best thing about loan comparison is that it will not cost you anything.
You must not skip this comparative study to get loans with pocket-friendly rates. Pursue this step if you want to grab the best loan offer when external factors are enough to influence the lending conditions.
How to improve the odds of getting loans in this scenario?
Your desperation needs assurance about guaranteed approval of loans. In reality, nothing can confirm as successful approval. However, you can still enhance the odds of getting acceptance for loans.
Some facets control the possibility of guaranteed approval. These are:
These days, lenders do not see bad credit as a red flag. This provision is very helpful for borrowers struggling a lot due to bad credit tags.
Lenders look through the current financial profile of the borrower. It allows us to nullify the effect of the risky decision.
Through a soft search, lenders collect information about the borrower’s current transaction status. Likelihood of approval increases if the recent bills show the on-time payment.
You need not have to worry if the present financial stature is more stable than before. Keep this point in mind to check if you can get the nod of approval from the lender.
It is not mandatory to have a permanent source of income. The lender will be willing to accept your loan request if you earn through part-time income, child support, benefits, pension etc.
You must have some income means to convince the lender. Having any form of earning assures the lender of repayment, which is the main concern of the lender.
In case you are running a business, you will have to produce supporting documents. The lender will need them to validate your income.
Scope of credit improvement
You can enjoy brownie points by showing signs of improvement. You must take necessary action to upgrade credit scores from the moment you come to know.
It will give an additional advantage despite being a poor credit borrower. The lender will feel motivated to support borrowers like you who are already in the process of correcting credit scores.
The bottom line
Maybe, you have just realised a sudden cash flow requirement. Borrowing seems to top the list of your preference. Therefore, being a UK resident, you want to make it a more careful approach.
Instead of simply relying on the current requirement, you decide to validate this borrowing decision based on facts and figures.
The after-effects of the pandemic are quite alarming. The financial market is already going through a rough patch. Don’t get surprised to see inflation!
The increase in the cost of living is indicative of that only. In this situation, interest rates are sure to rise. This is to make sure inflation comes down gradually.
It means you must agree to pay high interest to get loans. It will surely make repayment tougher for you. Most importantly, you need to ascertain if rates are even affordable before applying for these loans.
Above all, your credit scores will have to bear the blemishes if you fail to repay on time. Keep these aspects and other ones discussed in this blog to decide if borrowing is beneficial in this current situation.