Bad Credit Loans Offer Last Line of Credit
London (PRWEB) July 4, 2008 — Whether it involves remortgages, credit cards, car loans, college tuition, or just extra cash to help pay household expenses and stave off rising inflation, money is more difficult to come by and will be increasingly scarce as the year progresses.
According to the Telegraph, lenders have an estimated ?505bn of bad credit loan (sub-prime) liabilities on their books. To solve the problem, banks are offering to sell these damaged assets cut-price. But they are willing to lend investors the money to buy them. In other words, the banks are providing new debt for the old debt they no longer want. It does not take a degree from the London School of Economics to realise that such logic makes poor financial sense, and when banks throw good money against bad money, it is a sign that things are getting worse, not better.