They need to be able to demonstrate that they can repay

The amount they are seeking; it will be in equal instalments over the agreed term of the loan.

Recent economy

Recent economy figure unleashed in USA

There are some good signals coming from the Federal Reserve. While overall credit in the USA has increased, the most dangerous debt, credit card debt which incurs a high level of interest at the end of each month, is falling. Perhaps the message is getting through that the irresponsible use of a credit card, and spending money in excess of their income, makes no sense. The actual figures for the first month of 2016 show that consumer credit increased by $10.5 billion, excluding mortgages. At the same time revolving debt which is largely credit card debt fell by $1.1 billion, the first fall for almost a year.

The rise are due to increases in auto loans and student loans. The former may be a boost to the economy but the fact that credit card debt is falling suggests that consumer spending may be doing so too.

There are some obvious answers why this has happened. Clearly consumers are feeling less inclined to buy the latest technology and with some of the major retail names in the USA closing down some stores, names such as Wal-Mart and Macy's, the signs are that the trend may continue in the coming months. Even with gasoline prices falling there is little sign that this will boost spending.

The large auto manufacturers are relying on easy proper online fast loans- over an extended period to maintain the level of sales they require. The average auto loan in the last quarter of 2015 was almost $30,000.

Positive Loans

There is nothing wrong with loans as such; some can have a positive effect on a person's life:

  • Mortgages. The real estate sector depends upon mortgages. An excellent way for a family to build up an asset is to invest in real estate which is certain to increase in value over the medium to long term. There can be short term problems such as happened in the recent recession but in general it is well worth taking a mortgage over a term of up to 30 years at a relatively low interest rate as an investment.
  • Student Loans. It is generally agreed that a person's career prospects improve if they can get good educational qualifications. Education is not cheap so for most people a student loan is the means by which they can go to college and obtain the qualifications they require.

Credit Card Debt

Other loans or credit are not so beneficial. There has been easy credit in the USA for years. Prior to the recession credit card companies seemed to be falling over themselves to get more customers with minimal checks as to whether they were worthy of the credit they were being given. The recession not only hit consumer confidence, it hit everyone's pocket.

While a great deal of credit card debt was written off as bad debt during the years of recession there is still a considerable amount of such debt today even though January's figures were an improvement on previous months.

As a minimum people should look at their credit card debt and resolve to get rid of it as soon as possible. It is sheer waste. Those that have a regular income may well be able to pay off their debt by taking out a personal loan at a much lower rate of interest.

Financial Health

In everything other than the very short term the national economy will only benefit from consumers having their financial affairs in good order. That is what will expand and sustain spending and help businesses increase their sales.

There is more to good financial health than getting rid of credit card debt, important as it is. Everyone wants a long and comfortable life and that means having the resources needed. While some get through their lives without ever facing an emergency it does make sense to have a fund set aside just in case.

In order to make provisions for retirement everyone should start saving at as early a stage as possible. The signs are that those in their 20s have realized this and are prioritizing proper budgeting as part of their lives. In order to save it is important not to waste; waste is credit card debt and paying too much for utilities, telephone and insurance.

The figures on auto loans show that the auto manufacturers are doing their best to market their products. There is certainly nothing wrong in buying a new car if you can afford it. If you are ignoring the other essentials in your budget such as saving in order to get that new automobile you may well be storing up problems for the future. They include retirement of course and even if you think that is far in the future it is surprising how quickly times goes. Everyone produces financial statistics which are interpreted in different ways. If the fall in credit card debt continues at least that is one piece of good news.

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