What chances anybody with a bad credit status has, to get a loan during the credit crunch?
Very limited, almost none. As you may have heard, the credit crunch is the result of banks and lenders suddenly tightening their lending practices. Put simply, you need to be a low risk borrower, to get your loan application approved. Why? because the same banks have lost lots of money lending to entities with very low credit worthiness, and got burned badly.... losing millions along the way.
Finally, the Reserve Bank has put a hold to those practices, and all financial institutions have to follow. If not, their own borrowing will be severely reduced.
What does it mean for you? Each case of credit application will now be scrupulously reviewed, and the true financial position of the borrower, will be assesed. Bad credit history will eliminate most of the applicants, unless they're able to offer really high security level, as a collateral.
Of course, there still be "finge lenders" who will take the risk of lending to the credit impaired applicants. They will be following the same practices that got subprime lenders counting their loses. But, when the interest rate and deposit on borrowings are set high enough, you can cover all risks. That's how payday loans make some financial businesses very rich.
