APR is the abbreviation for Annual Percentage Rate. So if you want to take out a loan for any reason be sure to find out the APR as it represents the interest rate that will be applied to your loan. Obviously this will have a significant impact on your repayments.

Many banks and finance companies will normally quote their best APR. This does not mean you are entitled to it. Always clarify the APR prior to making any contractual commitment. Always remember your credit history will have a bearing on the APR you are offered. The worse your credit history the higher the APR. If your credit history is extremely poor you may find that you might not even be offered a loan.

You shouldn’t simply opt for the first loan package that you see. Remember these packages are designed to get as much business and profit for the lender as possible. Be sure to take the time to thoroughly examine the terms and conditions that are associated with any loan.

A typical APR for an unsecured loan should not exceed the Bank of England base rate by 5%.

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It is almost inevitable that at some time you will have seen some form of advertisement from a bank or finance company that will offer you a loan to pay for all kinds of things such as a new car or a home improvement. However, you should always consider whether you really want a loan before making any kind of contractual commitment. No financial institution is in the business of allowing consumers to borrow money for free. As these companies exist to make a profit, you will always have to pay back more than you’ve actually borrowed.

You should consider whether you have the income to pay back the loan in accordance with the lenders terms and conditions. If you default on payments you will probably find that you are considered as a bad credit risk. This will severely restrict your ability to obtain a loan in future without having to pay very high interest rates. A bad credit history will also affect your ability to obtain a mortgage.

If you can , you should take the time to work out your income and expenditure. You may find that you can easily cope with loan repayments after you’ve paid all your bills and other expenses but it would be a serious mistake to take out a loan for more than you actually need.

If ,after some serious consideration, you decide that you still need a loan you shouldn’t simply opt for the first loan package that you see. You will save yourself a lot of money and stress by carrying out some internet based research.

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A large number of UK consumers are finding that loans with average interest rates are becoming scarcer. According to current research almost half of all loan applicants in the UK will be rejected once lenders take into account factors such as employment history and credit rating. It is expected that even more borrowers will be turned away as financial companies incorporate policies that are designed to avoid consumers that are considered to be high risk.

In the current economic climate, any potential borrower that is classified as high risk faces the prospect of paying exorbitant interest rates on a personal loan.

Some lenders have decided that the safest course of action is to completely withdraw any type of personal loan service until there is a significant improvement in the economy. The credit crunch has ensured that these companies are adopting a safety first attitude in their lending criteria.

Consumers who feel they will not be able to cope without obtaining a loan are advised to thoroughly examine the interest rates and the terms and conditions that are linked to these financial products. The use of comparison websites can provide borrowers with a quick and easy way to assess the loans market.

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Recent research has shown that financial institutions have handed out up to £20 billion worth of loans without ensuring that consumers have sufficient income to keep up with repayments. It is estimated that over 60% of unsecured loans were issued without the correct checks being in place.

In effect, this means that lenders records do not accurately reflect the financial details of their borrowers. Although many lenders write-off a significant number of personal loans, this type of relaxed approach to issuing financial products can only lead to a rise in the number of people defaulting on their payments and being pursued by credit agencies as the economic downturn shows no sign of abating.

Industry analysts have criticized this type of practice within the financial sector. The credit crunch is currently affecting large swathes of the UK’s population and some financial agencies are failing to impose the correct measures to control the flow of unsecured loans. This does nothing to assist consumers as borrowers will only experience the short-term benefits of obtaining a loan that ,ultimately,they cannot afford.

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Finance company, ‘Pounds Till Payday’ which is based in Malta, is attempting to cash-in on the current credit crisis by offering UK residents an easy loan service via the internet. However, the Annual Percentage Rate (APR) works out at a whopping 2,255%.

The online credit business, offers to lend customers up to £1,000 over a 31 day period but anyone who takes out the loan can expect to pay an interest rate that will run into hundreds of pounds.

To qualify for the loan applicants must be over 18 years of age ,be a UK resident with a bank account and have a monthly wage of at least £335.00.

Credit watchdogs and charities are concerned with the exorbitant costs attached to this type of loan and have warned consumers to seek advice and fully exhaust every alternative before considering entering into this kind of financial commitment.

Pounds Till Payday is owned by Northway Broker Ltd which has established similar lending services in Europe and various areas of North America.

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Finance giant,Citibank, has axed nearly seven hundred jobs as it moved to close major sections of its operations that focus on loans.

Nearly 400 of these jobs will be axed from its Sunderland base which will face complete closure within the next 12 months.

The financial sector shows no signs of recovery from the current credit crisis and the Citibank group appears to be unwilling to issue loans to new customers. Major credit corporations are now imposing stricter measures in a bid to reduce any involvement in risky investments

The loan arm of the corporation, which has almost 100,000 customers, will relocate any associated administrative functions to another area of the company.

The beleaguered group recently announced that it had offloaded nearly 50 branches of its New York operations to Irish investors for a sum of $100 million.

Citigroup also released details of plans to dispose of a further $400 billion of assets in order to regain some kind of financial stability and increase revenue.

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The Halifax building society has announced plans to decline mortgage applications from potential borrowers who do not have large deposits.

It is feared that thousands of mortgage seekers will have to close their current accounts at other banks and building societies if they wish to obtain that elusive mortgage. Those customers who do not have a 10% deposit will be forced to open a high interest current account with the UK’s largest lender.

Financial analysts believe this latest move is yet another sign that financial institutions are tightening their belts in reaction to the global credit crunch. Experts will closely follow the actions of Halifax’s competitors to see how customers will be affected by the restrictive measures placed on a variety of financial products.

With no sign of a reversal in the current economic downturn and home repossessions hitting record highs, lenders are expected to adopt even more policies that they believe will greatly reduce financial risk.

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