Whilst it is clear that the ongoing recession is affecting most people in one way or another, particularly in terms of their financial situations and job security, a recent report has said that people that have damaged credit histories and low credit ratings are amongst the groups that will be hardest hit by the recession.
Officials have said that the cost of borrowing for those with damaged credit in the current climate has soared, which puts many of those that have less than perfect credit in a very difficult position.
The figures showed that the best buy deal on a personal loan for someone that had less then perfect credit had soared to around 8 percent earlier this month, despite the fact that the base interest rate, as set by the Bank of England, was at its lowest level in the three century history of the central bank, and stood at just 0.5 percent following a series of rate cuts over recent months that saw that base rate slashed to just a tenth of the level it was at back in October of last year.
With the interest rates on personal loans and other forms of borrowing so high for those that do not have good credit monthly repayment could shoot up, and this could put borrowers in this group in an ever worse position, as they may struggle to keep up with repayment on a higher interest loan. Whilst there are some decent deals still available from some lenders, these are reserved for those with good credit, and they can be very difficult to come across.
One consumer stated: “I looked for a personal loan recently to fund the purchase of a new car and I was shocked at the rates being offered considering the low base rate. I spent ages searching around for a decent rate, but my credit has been knocked in the past and I couldn’t find anything that I could comfortably afford.’