Consumer lending continues to be on the rise, giving all encouraging views of the UK economy. It took quite a hit due to COVID-19, and is making a comeback. Virgin Money, a British bank, has issued a forecast that is encouraging. Such information is based on the restrictions relating to COVID-19 being modified and less strict.
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This forecast was released at the end of July regarding consumer lending, mainly for homes. Virgin Money anticipates the 3rd quarter for 2021 will offer significant improvements compared to a year ago. However, they plan to offer funding for much more than just homes. They realise consumers have a wide range of needs at this time due to both COVID-19 and other factors.
Virgin Money has 19 million pounds available for lending at this time. Such funds can be used to help people rebound from the health issues relating to COVID-19. As the economic status continues to improve, they will also lower the remaining $678 provisions already out there. They understand risks still occur with lending due to the number of COVID-19 cases.
They have also taken the variant and other factors into consideration. As the government continued to remove support, it causes some problems and scares for the financial future of the UK. This lender firmly believes lending to consumers during this time will help the economy recover and get stronger. They also feel it will reduce the amount of time it takes for the UK to fully recover from the financial crisis the pandemic created.
Virgin Money ranks as #6 of the larger banks in the UK. Loans for customers are up .04% in the second quarter compared to the year before. Mortgage loans increased .07% and personal loans increased 2.5%. During the pandemic, such lending dropped because of stricter guidelines. Consumers were also unsure of the future, so they didn’t make new purchases of homes or vehicles unless they were necessary.
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Bank analysts are impressed to see improvements across all areas of loans in the UK, it is going to help the economy bounce back. It is a move in the right direction, and the forecast from experts predicts this trend is going to continue. Virgin Money and other lenders have struggled due to reduced loan applications from consumers due to the COVID-19 pandemic.
There is also the issue of loans that consumers defaulted on. There are many reasons that happened such as reduced or lost income, health issues, and increased costs for basic necessities. As a result, the shares for Virgin Money decreased, but at a lower rate than those of other larger lenders in the UK.
Due to COVID-19, lenders are more forgiving of blemishes on credit according to same day loans company Now loan. This includes higher debt to income ratio for bad credit loans. Consumers should talk to a lender if they need to borrow, rather than assuming their credit isn’t good enough to borrow the funds. In these evolving times, lenders like this are doing what they can to put the money within reach of consumers.
The company expects the net interest margin for 2021 to be above 160 basis points. This is going to help Virgin Money continue to be a profitable entity. They are in a position where they can help boost the UK economy by offering great deals on loans to their customers. Such information is reassuring and encouraging. With so much uncertainty about COVID-19, some good news for the economy is welcomed!