Friday, November 9, 2007

Borrowing to pay off your debts! Mmmmm, that’s not too clever…

Banks end the era of easy loan cash

'Loans have become increasingly popular with families trying to juggle different debts, with two thirds of loans used to pay off other debts. With rates going up and lending criteria getting stricter, it could trigger a major financial headache for many stretched families.'

Posted by tyrellcorporation @ 08:30 AM (684 views)
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4 thoughts on “Borrowing to pay off your debts! Mmmmm, that’s not too clever…

  • Oh wonderful, it’s official, dur, we all new it was going to happen. All those pigeons will come home to roost, and at a time of higher interest rates as well. So the mad concept of building up a massive credit card bill, and swapping it onto another card with a 1 year “free” no interest account will suddenly create a massive crunch for all those trying to keep up a standard of living that they cannot afford. Busy time down at the Citizens Advice Bureau, and in a somewhat smaller then the mortgage problems, but much quicker to hit the pocket, this is going to be the next wave of Sub-Prime. All those who were vulnerable but survived the rising Mortgage Rates, will not be able to escape this trap, and at a wonderful rate of 16% APR, it makes mortgages seem cheap …

    Incidentally I’ve notice 2 new pawn shops “We cash your cheques” have just opened just off the main high street. Presumably so that they are a bit more discreet, for the discerning customer !!! The windows are quickly filling up with larger plasma TV’s, etc. The second hand car dealer is also doing well, gone are the 4 or 5 yr old cars, now they’ve got a better selection of only 1 or 2 yr old BMW’s, etc.

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  • japanese uncle says:

    All I should like to hope is these credit card loans have by any chance been securitized, sliced and diced and sold away to some of the sucker financial institutions.

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  • japanese uncle says:

    Sorry “NOT” is missing in the above.

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  • @JU: Credit card loans, car loans, and unsecured personal loans can all be securitised into Asset-Backed Commercial Paper (ABCP). This has already turned sour, as this MoneyWeek article from last August shows: http://www.moneyweek.com/file/34286/whats-wrong-with-commercial-paper.html

    A banker is somebody who lends you an umbrella when the sun is shining only to take it away again when it starts to rain

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