subject: How Much Harm Has The Fast Loan Culture Caused? [print this page] Some journalists are hailing the credit crunch as a good thing as it's stopped the fast loan culture that has become a way of life in recent years. They claim that the credit crunch has acted as a wake up call to the thousands of people who have racked up large debts.
That's probably very harsh as at present many people are in financial difficulties as a result of the knock on impact of the credit crunch, the downturn in business and the loss of their jobs.
But there as been so much money wasted on trivial items that people don't actually need. Changing fashions dictating spending rather than need. Luxury holidays bought on credit using fast loans and houses remortgaged making people believe they had more money than they actually earned.
Unfortunately though, the banks or credit card companies expect you to repay any money you've borrowed!
It's been thought by many people that house prices would continue on an upward path and have borrowed large amounts of money on this assumption. Fast loans and re-mortgages have been taken out in their thousands to fund luxury items that we think we can't do without. There's been a major mix up about what's a necessity and what's a luxury item.
How then has this explosion in fast loan borrowing left people who now seem to be facing massive financial problems?
The awful situation is now that we have many people losing their jobs and homes. We have businesses that have been profitable now going out of business because the banks are refusing to finance new investment and in some cases calling in already agreed loans...
There's been a complete change of stance by banks. For years they've been desperately trying to push loans on to people. Details of fast loans and credit cards were posted to your homes every day. It was just so easy to raise a loan...
For many people the present situation is a total disaster and they'll have tough times to get through. They'll be anxious and worried for much of the time - nothing positive going on for them.
As things get sorted out in the long term the present pain may lead to people taking a more responsible attitude towards their spending. It will be realised that you can't have all that you want just by handing over your card or taking out a loan. Saving for things may come back into vogue, and you won't rush to replace things just because you fancy a change...
Maybe then, it can be said that the fast loan way of life has caused a great deal of damage, but if lessons are learned then the future could be brighter.
by: Jo Marsden
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