Why Does Financial Instability Affect Loans For Bad Credit?
October 30th, 2011
If you were just looking at the interest rates on various types of loans, you would probably assume that the most attractive borrowers would be the ones who take out loans for bad credit and therefore have to pay very high interest rates. There are times when this is true, but banks are nervous about the risk that these borrowers will default. Since they are often already financially unstable, any kind of upheaval in the economy will hit these borrowers the hardest and banks will be even more unwilling to lend to them.
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