Loan applicants are being rejected by the banks at the same rate beautiful women turn away hopeful young men on Saturday night.

The old saying that banks will only lend to people that don’t need it, is as relevant as ever. Loan applicants have to shoot a white arrow after their dreams, because the vault is closed. While governments are trying to spend their way out of the financial crisis, the banks don’t follow suit. The scare from the last few years have send banks sneaking back into their old shells and credit is no longer as easily available as we have become used to.

Taking into account that the tax payers are paying to clean up the mess after the banking industry failed, is it reasonable that they suddently don’t have access to credit? Banks seem to be reacting like a pendulum swinging from one side to the other, but they should make a bigger effort to find the balance in the middle.

Of course you would expect banks to clean up and tighten the lending criteria, but there has to be a middle way. People on a good income should be able to buy a home or a new car but without access to credit that’s not possible. This is a major problem and it will have long term effects. The banks have to live up to their responsibility and play their role in society.

People have started to turn to alternative credit providers such as payday loan companies. According to research from the UK comparison aggregator, Money Supermarket, the UK market for short term payday advances increased by 55% from may 2008. The higher demand for the quick cash loans are a good indicator of the economic pressure people are feeling. Luckily the payday loan product has evolved significantly over the last few years and can now be considered a smart and safe alternative to credit cards and other short term credit products.

However banks should really take responsibility and find a better balance. We all realise that the lending practises used over the last few years were completely out of hand but so is the narrow loop hole people have to jump through today.

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