There’s never been a better time to get a personal loan with rate cuts due to Brexit!
After a landslide victory over Jeremy Hunt, Boris Johnson became the new Prime Minister. The elected Tory majority is a clear sign that we will definitely be leaving the EU, with the due date being set to January 31.
However, if the Prime Minister doesn’t convince the members of the parliament to get on board with his proposed EU divorce plan. If this happens, a trip over to Europe certainly won’t feel the same.
However, there’s a silver lining.
To support the economy, The Bank of England is considering cutting down interest rates by an additional 0.25% per cent. While this might not be the best news for someone with a savings account, it can certainly help people with a mortgage. Lower interest rates mean that your repayment cost per month is going to go down.
This is also a great opportunity for anyone looking to get a personal loan, as low-interest rates mean your repayment rate will be significantly lower. This could be a great opportunity to use a personal loan to deal with previous debts or other financial problems, which will ultimately help you improve your credit score.
With all the uncertainty surrounding the recent election and its consequences, if you needed a personal, unsecured loan now would be the ideal time. Not only are the rates lower than they are going to be in the foreseeable future, but the risk of an interest rate increase is also very low.
Namely, while a rise of the interest rate can affect the payable of mortgages, personal loan interest are not as strongly connected to The Bank Of England’s base rate. Therefore, the rate increase may not come as fast for personal loans as it will for mortgages.
What Does This Mean For You?
Higher interest rates will undoubtedly affect every aspect of our lives. For start, our monthly expenses will significantly rise. This entails everything from your monthly bills to the consumer price index (how much you spend shopping).
First and foremost, higher interest rate increases the interest rates of your credit cards or personal loans. This means that if the interest rate is raised, you can expect you’ll be spending more on your credit card transactions, as well as higher repayment rates for any loans you might take out.
If you were planning a trip to Europe anytime soon, you better start packing your bags now, because a “no-deal” Brexit could mean a whole lot of changes. For one thing, if you’ve planned on taking a driving trip you are going to need a lot more paperwork than right now, including obtaining an international driving permit. There will also be additional roaming charges, as UK phones won’t be covered in the EU anymore.
With future trips being more expensive, getting a personal loan to fund your trip to Europe might be a good and affordable idea at the time. This could be your opportunity to both see Europe before visitation laws are tightened and to do it at a much more affordable price through an unsecured loan.
How Will This Affect Our Finances?
There has been a lot of talk about how the financial landscape will change in the UK, more specifically personal finances. If you haven’t been living under a rock, you know that Brexit stands for Britain’s exit from the European Union.
The main issue here is whether Britain leaves the EU with a negotiated deal or not. If the deal is reached, the regulations, prices and consumer rules will likely remain the same until the end of 2020 or longer (based on the terms of the deal).
However, if the UK leaves without a negotiated deal in a „no-deal“ scenario, things are most likely to change at a drastic rate. There have even been education campaigns staged by the government to prepare the populace for the “no-deal” scenario.
The EU has set January 31, granting us the requested deadline extension. However, if a deal is struck earlier, we will be able to leave even earlier.
What Will The Brexit Deal Look Like?
Short answer: We are still uncertain.
The long answer: Boris Johnson has promised a new deal and having the majority in the general election means that MPs will likely fully support his proposed plan.
If we leave the EU with a deal in place, regardless of the specifics of the deal, there will likely be a transitional period until the end of 2020 at least. During this time, certain aspects of the relationship between the UK and EU will still be in place.
However, in a “no-deal” scenario, the relationship between the two will be overseen by the World Trade Organisation. However, the specifics of that scenario are still uncertain, which is why leading financial experts are advising to resolve any financial issues such as applying for a loan immediately or at least before the exit.