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'Further downturn expected' in credit market

People looking to take out credit may be disappointed in the coming months, if one expert is to be believed.

According to Capital Economics, the next "few months" may see a further downturn in the amount of credit available to potential borrowers.

In elaborating on why this is the case, Vicky Redwood, UK economist at the firm, cited "the continuing problems in the money market" as an explanation.

Credit cards are one of the forms of borrowing that may be particularly difficult to come by, Ms Redwood claimed.

"If you were to apply for a credit card you would have less chance of getting one and if you have got one you may see your limit reduced," she said.

She added that the rates on personal loans and credit cards have changed in recent months, while prerequisites for taking out a mortgage have also adjusted to the economic climate, with an increase in the amount required for deposits.

The Bank of England Credit Condition Survey recently revealed that lenders reduced the amount of secured credit throughout the first three months of the year.

People struggling with debt may consider consolidating their outgoings into one manageable monthly payment.

See how much you could save with a consolidation loan from Lombard Direct.

© Adfero Ltd

11/04/2008 12:08:28

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