Cash, Cars and Babes

An online pawnbroker, borro.com, have said that they will waiver interest on all of their new short term loans, which are taken out before the end of the month.

Their average loan lasts for 3 months, which means that, with interest rates of between 3 and 6%, interest is basically reduced by a third.

Why are they doing it? It is part of an attempt on their behalf, of bringing the pawnbroker into the 21st century, hoping that they can introduce the pawnbroking option as a viable alternative to the contemporary lending routes.

It's hard enough to get a loan at the moment but it's not just us the borrower who is being affected by it all.  Some of the lenders themselves have been unable to cope with the tightening market and some of the smaller players have been forced out of business.

One of those who I was sad to see go was Loans.co.uk, a company I was considering taking out a secured loan with late last year.  I only discovered they'd gone under when I accidentally clicked on their website in my favourites list.

It's now forwarding onto First Union with a message that Loans.co.uk are no longer accepting new applications.

I hope everyone involved with them managed to get new jobs, especially what with it being this time of year - can't be nice.

The sale of payment protection insurance alongside secured loans and other credit agreements is to be reduced, by banning lenders from selling the product at the time when the loan is taken out. Instead, they have to wait 14 days before contacting borrowers about the PPI option.

This is to try and prevent the amount of PPI policies which are being mis-sold to consumers, by giving the consumers more time to assess whether they need it or not and give them the option to shop around for cheaper alternatives.

The watchdog are also considering temporary price cap on PPI policies, to reduce the cost of cover. It will also allow for better information for customers, to allow them to make an informed decision on what they need, if they need one at all.

Everyone seems to be suffering in some way or another from the economic slowdown, whether its just from spending a few more quid on their weekly shop, or not being able to afford their bills. But it seems that young adults are the ones who may be the hardest hit in the end. It appears as though a free spending fiscal policy and the rising risk of unemployment could force many to take out large personal loans or secured loans, to get their finances sorted - something which will affect them for years to come.

First time buyers are struggling, even though property prices have dropped massively. The banks are trying to charge higher rates and have tightened their lending criteria, and larger deposits are needed - it's almost impossible to buy your own home at the minute.

It's also been said that apprentices in the building and electrical trades have no jobs after their training - they have bills to pay and families to feed.

These really are proving to be hard times and it seems young adults are going to be the worst off.

The Bank of England has warned that rising loan defaults are pushing consumers further into debt and leaving less money for the economy.

There has been a sharp downturn in house prices as more and more home owners look to sell to help themselves out financially and buyers push the prices down even more. There's even more concern as well, as public debts approach £50bn this year, although overall debt for the UK is in the region of £500bn.

New comments from the FSA indicate that its interventions with regards to Payment Protection Insurance will be heightening. Many complaints have been put forward regarding the cover, claiming it is mis-sold and doesn't offer good value for money.

The aim of the cover is to help with loan repayments of policy holders in the even of job loss or other major life event. But some consumer groups have complained that it is often sold as a bundle with the loan, rather than a separate cover, which often appears to be very costly.

For example, last week, Which? reported of a couple who were paying £23,000 in PPI for a £56,000 loan.