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Is the European Debt Crisis Affecting the Average Borrower?

by admin on April 25, 2013

European Debt Crisis

The European debt crisis  is really about Europe’s struggle to pay off the debt that it has incurred over the past 20 years. As a result they have been unable to pay back bondholders the amount that was owed. This has lead to the problems becoming widespread and affecting the whole global economy, meaning that the current economic plight has been considered by the bank of England as the most serious financial crisis since the 1930’s.

The worldwide economy has actually experienced slow growth since the U.S. financial crisis in 2008 and 2009. As a result of this, weak fiscal policies of countries in Europe such as Greece have been exposed. European countries have spent heavily but failed to grow their economy at the same time. Slow economic growth means that tax revenues are drastically diminished, resulting in countries having large amounts of national debt. For example the personal debt of Greece is larger than its whole economy. There are repercussions that will continue to effect the economy as a whole

How does the European debt crisis affecting us?

As a result of the crisis, the European economy is in a recession. For borrowers, it actually means that banks are lending less. Unfortunately for the economy it actually leads to a slowdown in overall economic growth. Because Europe is in the midst of a long and perpetual recession, the whole global economy has become affected. At the beginning of the recession, it was very difficult to borrow any money from high street banks. People then turned to short term loan companies as a means of accessing loans. These loans were readily available but with much higher risks as interest rates were considerably higher.

There has been some improvement over the last few months with banks now lending more frequently. There is no doubt that the current European debt crisis will continue to affect borrowing but there are still opportunities to get finance including loans from high street banks. For those who have full time employment, a good credit history and a trusted relationship with their bank, getting a loan will actually not be too difficult. For the average borrower who has a good banking history, loans can be approved by your high street bank.

The Bottom Line

Banks will play a major role in helping the economy to recover. There are various loan options available to help new businesses get started, while banks have been quick to realize that they have a significant contribution in terms of helping to restart the economy and are therefore still keen to lend. Obviously banks will not lend to those who are considered a risk so your credit history and employment record will be important. For the average borrower, there are still good opportunities to borrow from you bank despite the European debt crisis. Simply visit your bank online for more details.

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