To use the term, unprecedented, during the Covid Pandemic was an understatement! Not since 1918 and the Spanish Flu epidemic did we see such death rates, sickness, and countries being locked down, and life as we know it, changing forever.
So much changed and had to change during the lock downs we experienced.
Our shopping habits changed, our work patterns, and where we worked changed, and our social life and family life changed. Bubbles, no pubs, face masks, hand washing, hand sanitiser, all these became the new norm of life.
Many companies put their employees on furlough, and the government picked up part of the bill for this. Many lost their jobs through redundancy, and even now with the lock down lifted, more are still being made redundant.
Many businesses could not come back, they had to close.
Couple this with Brexit and many EU’s leaving the UK, we now have a need for people to work, we have a labour shortage.
But what about loan companies, getting a loan, and paying back a loan during the lock downs, and what about now that things and the economy are slowly getting back to normal.
You Can’t Pay If You Don’t Have It
Many of those on furlough, or who lost their jobs, had debt(s), and bills to pay. The majority of the credit card companies and banks understood this, and worked with their borrowers.
They offered different payment terms to help, and many offered a “breathing space” of time for their borrowers.
However, by making use of this space, or different payment terms, it does come at a cost, a cost to your credit score.
The Cost To Lenders
In doing some research of some lenders, a few have gone out of business. They offered reduced terms to their borrowers, but then were losing money, so now, they have had to enter into Administration, and go out of business.
Their clients or borrowers still owe their loans, but will be paid to the Administrators, until a time when the loans may be sold.
So a cost to both the borrower, via their credit score, and a cost to some lenders as they had to close.
What About Getting a Loan Today?
Getting a loan today is to my research, the same as it was in pre-pandemic times.
You apply, the bank or lender looks at affordability and your credit, and Bob’s your Uncle!
Interest rates have changed, and are changing. They had been very low, as to if this will continue will depend on the economy, and the Bank of England.
The main issue will be for those that have lost their jobs, or had their credit impacted by being on furlough, and having reduced payments. It will be up to the banks and lenders to decide if they take these factors into consideration.