How has the Lockdown Affected our Financial Behaviour

The covid-19 pandemic has influenced the way of life of many people across the globe. The epidemic has especially significantly changed the financial sector. Due to the lockdown and the movement restrictions, many businesses have had to put their operations on standby. It has also forced many companies to let go of their employees hence resulting in a financial crisis for businesses, individuals, nations and the world at large. As the pandemic keeps spreading, the negative impacts keep becoming more significant than ever.

Below is how the lockdown has affected peoples’ financial behaviour

During the lockdown, more people have turned towards less expenditure. The reason is that the financial crisis has made it necessary for people to worry about their spending. Even those people who still have the financial means were forced to cut down on expenses because of the movement restrictions and lockdown. For instance, the lockdown has made it impossible for people to go on shopping sprees and expensive vacations.

Banks and lending organizations have reduced their interest rates for loans like mortgages in attempts to help people deal cope. Businesses have also had to reduce the cost of their products during this era.

What decisions are expected for the after crisis era?

One of the main decisions that are expected after this era is taking loans. From uk bridging loans to business loans, no matter what your monetary needs, there is almost always a type of loan out there that can help.Below are some loan options for during and after the crisis-era;

Logbook loans

The reason why logbook loans are popular is that they are the easiest way to access money when it is urgently needed. It is, therefore, the most convenient type of loan during a crisis because of the financial constraints that most people are suffering. The fact that even people with the most mediocre credit scores can acquire the loans also makes them a good option. In this kind of loan, you receive money by signing over the ownership of your car. You also have to give your logbook to the lender. However, this does not mean that you cannot use or access your car after signing it over as you are only taking a loan against your car. You still get to use it, but if you fail to meet the payment terms, your vehicle will be repossessed. While logbook loans are easy to get because they do not ask for a lot of requirements, they are also risky. The risk is that most of the time they end up in repossessing of the cars. The interest rates for these loans are even higher than the others.

Car equity loans

These types of loans are designed similarly to home equity loans. They are loans where your vehicle is used as a form of collateral. This type of loan keeps increasing in popularity because they are a fast and easy way of acquiring money, especially in these hard times. They can also be categorized as short term loans. Their popularity can also be attributed to the fact that they are a cheaper alternative to the first type. They feature lower interest rates, and the amount of risk involved is also lesser than the latter. They also have a longer repayment term hence making them much more comfortable to pay off than the last. Once the loan is completely repaid, the lender gives out a vehicle equity release.

Business loans

This type of loan would be the best move after the crisis as business people try to rebuild their businesses. Business loans are designed for funding companies. They are taken by people looking to start businesses or inject more cash into an existing business.

Business owners can get this type of loan if they have an excellent personal and business credit score. The company also needs to have a proven track record of profitability. After the crisis, business owners can use these loans to get their impacted businesses back on track. While applying for this loan could be tasking and pain, it is the most obvious solution of struggling companies.


This is where you borrow from your bank by going into a negative balance on your current account. Anyone with an existing account can get an overdraft provided they have a good credit score and earning. These factors, as well as the type of account, affect the amount one gets from the lender. The interest rates are slightly similar to those of regular loans.


The financial impacts of the lockdown and the pandemic, in general, are so far stretched that the clear financial solution for most people and organizations is taking loans. It is through investments that businesses and individuals can get back on their feet.