There can be lots of risks to consider when looking at taking on credit, particularly with the current climate of unstable UK politics.
Post Brexit Credit
With a clear sense of disillusionment amongst residents of the United Kingdom in relation to the political climate this could ultimately lead in a loss of faith in the financial sector which would, in turn lead to a reduction in the number of loan applications being made. There is already a heightened sense of fear across the United Kingdom due to the uncertainty of what may happen post Bexit. What impact does this have on the lending arena and how is it this would have an impact on peoples submitting applications for credit? The answer is quite simple really; research would suggest that due to the uncertainty people are holding onto their assets, austerity measures are being implemented within households and there is therefore a lack of risk from the average UK household certainly when it comes to applying for unsecured lending.
Loan Market Destabilisation
Where does this leave the lenders one may ask. Well, there is still a plethora of short-term and long-term unsecured and secured lending options available and indeed this will always be the case both pre-and post Bexit. The only real implication on either secured or unsecured loan applications will be individuals uncertainty on where the political landscape will be come October 2019. If a deal can be secured and this is what political commentators have predicted will be the likely outcome, and it could be argued financial sector will remain largely unaffected. If however were to leave Europe without a deal this could potentially destabilise the markets, interest rates could rise on mortgages and the once solid credit rating held by the United Kingdom could fall which could impact on lending between nations.
UK Credit Ratings
Although this is a worrying time, one must always hold onto the fact that there are many other countries who are not part of the European Union and who function perfectly well. He continued to have stable lending sectors and have all been able to maintain outstanding credit ratings, Norway being a prime example of this. With regards to financial advice for any residents of the United Kingdom who are considering taking on higher levels of lending it may be advisable to wait until the outcome of Brexit to ensure certainty around what potential interest rates will be applied across the board