Our Changing Globe

Posts Tagged ‘collateral’

Right now it’s difficult for even people with good credit ratings to get loans and whereas having real estate used to mean almost instant loan approval even that is now problematical because of collapsing house prices.

So what about people that have continually been in arrears, have defaulted on debts, have liens on them or have even filed for bankruptcy?

Well if they have a job they can still get loans although the lender might insist on having a part of the borrowers salary attached, meaning that the monthly payment will be automatically deducted from his or her salary. And the interest rate will be high but not normally one that will prevent someone who really needs money in a hurry from signing up.

Well if you’re unemployed and don’t have any collateral you might feel after reading the above that you have no chance of getting any kind of loan but that’s not true. It might be more difficult and it will be more expensive but it won’t be impossible by any stretch of the imagination.

Unemployment is soaring and will get worse and many people have lost their homes but the banks still need to lend money or they’ll go out of business which means that they’re now making riskier and riskier loans.

The bottom line is that people that are in urgent need of money can make use of what are known as high risk immediate personal loans which provide almost immediate money when it’s needed most and many people use them to consolidate other mounting debts.

There are many different loans available and many different banks making them and many of the banks are small and you won’t have even heard of them but there are available lists which are getting continually updated.

If you have collateral but believe that there’s a good chance that you’ll default on the loan then take out an unsecured loan even though it costs more.

The Banks Are Now Indebted to Governments

Just last week Obama promised to spend hundreds of billions of taxpayers’ dollars to prop up the sinking U.S. economy and Gordon Brown’s British government announced that it would take from the “rich” in order to finance an economic rescue.

The Bush administration has all but nationalized the world’s largest bank, the Citigroup and it has also thrown in an additional $800bn to attempt to thaw America’s starving credit markets.

The banks meanwhile are pretending that they are still answerable to their shareholders whereas they are in fact only surviving with very explicit financial guarantees from their governments.

In spite of extreme attempts at resuscitation the markets continue to lack confidence however and if nothing changes soon then capitalist countries will have little choice but to assume even more direct control and even possibly take direct ownership of their banks.

In the U.S. and Britain, the centre-left understood more than a decade ago that if it wanted to win elections that it would have to accept Reagan-Thatcher economics and Bill Clinton promised the end of big government.

The bottom line is however that main street America did not vote to throw out the capitalist baby with the bathwater and the leading members of Mr. Obama’s new economic team are amongst the most enthusiastic believers in liberal markets.

Financial boundaries have moved and although downswings always created a backlash they were more often than not forgiven because of the following upswing, but this time the bust was so much more severe that the effect of the crash will be felt long after the actual recovery occurs meaning that ‘forgiveness’ will be much later in coming.

The public no longer trusts the market and it’s not clear whether president elect Obama and other leaders will be able to right the wrongs at any time soon, but what is certain is that financial thinking and the world’s markets will never be the same again.

The Banks Are Now Indebted to Governments.

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