As a result of the credit crisis and recovery act initiatives we’re seeing some of the lowest interest rates in history.  Although interest rates have been low at other times but the recent bubble bursts has created a very unique situation.  As the economy naturally began to flatten out, prices across several market sectors in have been lowered a great deal as well.  Borrowing to finance a new business, a home, a new car, or just about anything else is just about as “inexpensive” as ever, but does this make now the perfect time to take out new loans and more debt?

Credit industry experts have warned that although today’s current economic conditions may make it tempting to finance new purchases, it is important to remember to avoid the same mistakes many Americans have made in the past.  Now may be the time to continue to save more, pay down debt, and work on repairing your credit score instead.

Job growth prospects remain slim.  If you haven’t already lost your job, there is still always a possibility that you may lose yours and be left without one for a long period of time, like millions of other Americans.  With your current job, you may be capable of taking advantage of the current market by taking on new loans, but if a job loss arises, you may become behind in payments or even have to default on your loan, badly damaging your credit.  If you’re currently unemployed already, there is a good possibility that taking on new debt will not be worth it.

In addition, obtaining credit can be much harder today.  If your credit score is less than excellent, you may not qualify for a new loan as you would have easily qualified in the past.  Even those who are looking to refinance a home now will generally need at least 20% in equity in the home as well as stable income.

If you do decide to take on a new loan to take advantage of today’s climate, make sure you will be able to maintain good credit.  If you do need to borrow now, but your credit score is leaving you with less than the best interest rates, talk to Mick Bernard, in order to work towards obtaining the best possible rates.