An article in the Times this week about personal loans highlights how banks and other lenders seem to be fighting to offer the worst loan deals at the moment - in a potential bid to curb demand. Despite gargantuan cuts in the base rate recently, a cheap loan is becoming harder to find than a new Christmas number one for Cliff. Here’s an extract:

The cheapest loan available is now 8.2 per cent – that is more than four times the base rate at 2 per cent. Experts say that providers may actually be trying to price themselves out of the market as the availability of credit continues to be squeezed.

Several providers have increased personal loan rates in the past four weeks – including Barclaycard by 2 per cent, Sainsbury’s Finance by 1 per cent, and Britannia building society and Lombard Direct by 0.5 per cent.

At the same time cheap bank loans are vanishing, the number of lenders who are willing to help out is also shrinking:

Lending on personal loans dropped by 26 per cent in October in comparison to the same month last year, according to uSwitch.com. Whilst six months ago borrowers could get rates of 7 per cent or less, all of these deals have now disappeared. Moneyback Bank, which consistently offered loans as low as 5.5 per cent over the past two years, has closed for new business completely.

Last year almost 1.3 million people took out an unsecured personal loan to consolidate debts – but with interest rates rising and credit being harder to obtain, less borrowers will have that option.

If you’re having trouble finding a cheap loan, or any loan at all, now might be the perfect time to try a short-term Wonga cash advance. You will need to pass our online credit check but, unlike the banks, we lend cash to tide you over for up to 30 days, so we’re not looking to predict your reliability over several years. You also won’t be left making repayments for years either of course!

While plenty of people will be looking forward to Christmas, this year will no doubt be a stretching one for many. And with financial strain usually comes stress.

It’s an expensive time of year and the pressure to ‘buy’ yourself a happy Christmas can be intense. Whether it’s your desire to buy the right presents, to cook up a festive feast for the in-laws or just afford the basics like Christmas cards, it can be a worrying (as well as wonderful) time.

So with the Credit Crunch all over the media like an unsightly rash, it’s no surprise there’s a mountain of money saving tips out there right now. Try searching for ‘money saving Christmas’ and you’ll get over 1.3 million results. Thankfully you can always count on Wonga to keep things simple!

We’ve trawled cyberspace for you and sorted the wise from the wacky. Here are our favourite five tips to have yourself a merry little Christmas on a budget.

1. Set yourself a realistic limit on everything from presents to food and stick to it. Most overspending occurs when you’re not thinking, stressed and get lured into an impulse purchase. So make sure you write down your limits and make it a challenge to beat them.

2. It’s easy to borrow in haste and repent at leisure, so make sure you consider any credit very carefully before committing. Loans and credit cards can seem appealing at times of financial stress, but they don’t mean an end to your cash worries, they merely delay them until the new year. A Wonga loan is a short term loan designed for short term cash flow problems. That means you won’t be left making repayments come next summer, but you should still consider whether you could really do without the cash before applying.   

3. Don’t succumb to unspoken pressure to have the perfect Christmas. For example, if you’ve been giving and receiving presents of a certain value with your family for years, don’t assume it has to be so this year. Discuss more sensible budgets or even the idea of a ‘Secret Santa’ gift approach, where you all spend £5 on one person and have a bit of fun. You might find everyone’s relieved at the idea of spending less this year. And it wasn’t so long ago that the season of goodwill didn’t entail spending a small fortune on pressies!

4. Entertainment needn’t cost and arm and a leg either. Classic TV and walking the excess grub off are both part of Christmas tradition, so don’t feel you have to be in a pub, restaurant or cinema to enjoy yourself. Get back to basics and enjoy just being with friends or family. Knowing you’re saving cash should help you relax too.

5. Finally, let’s cheat! Here are a few thrifty suggestions rolled into one… Send eCards for one year, tart up cheap brown wrapping paper with a roll of ribbon, buy new decorations after Christmas for 75% savings, spend any reward points you’ve earned this year and check out low-cost gift guides like this one from the Guardian. Oh, and shop around for the best price on EVERYTHING - retailers are struggling too.

There are many reasons why a Wonga loan is different to a traditional loan, but perhaps the most fundamental point is that we make money when customers repay their cash advance. ‘So what?’ you might think, ‘Surely that’s normal.’ But in the world of unsecured personal loans and credit cards there’s a cast iron rule that usually goes unspoken… They generally make money by keeping customers in debt for as long as possible!

In an industry where new customers are won on low headline interest rates, cash is often made by other means. These tactics include long repayment periods, fixed terms and penalty charges.  

Even in these uncertain times of soaring inflation, nationalised banks and restricted lending, many rules of traditional credit still apply. Indeed, while there has been unimaginable turmoil in banking, true innovation in the way services are offered to consumers remains a rare thing. The credit industry is such an ancient one that in times of trouble it’s common for lenders to become even more cautious and rigid.

The best advice is to make sure you fully understand the terms of any form of credit agreement before taking the plunge. Always read the small print and, in the case of personal loans, check for early repayment clauses. Otherwise you could find yourself handcuffed to your debt for longer than necessary.

Or you could visit Wonga.com instead! At Wonga we have no desire to keep you in debt and the entire service is geared towards helping you manage your cash flow with short-term credit - on the odd occasion when unexpected expenses strike. You can choose exactly how much cash you need and exactly how long you want it for. That means you’re in control and you settle the debt quickly. 

Our commitment to responsible lending also means you won’t find any hidden charges even if you decide to repay your loan early. We will actually welcome it!

The Times has written about recent research from Moneyexpert that exposes another ruse by banks to secure even more revenue during the credit crunch and ongoing regulatory pressure.

The article highlights how the best savings rates are being reserved to tempt new customers, while existing customers are often seeing the interest they can earn reduced. Instant access accounts are being worst hit, as the banks look to tie customers in with products that come with a long-term commitment. Here’s an extract, but you can read the whole article here.

Banks and building societies have slashed interest rates for loyal customers with instant access accounts as they look to lure new savers with eye-catching offers on long-term fixed-rate products.

The credit crunch has created a “dash for deposits” with rates as high as 7.2 per cent paid on fixed-rate savings. However it is only long-term savers, happy to lock their money away for extended periods, who have been the beneficiaries, an analysis by Moneyexpert.com, the comparison site, has shown.

The average rate paid on instant access accounts has dropped from 3.76 per cent in January to just 3.3 per cent now, said Moneyexpert. Northern Rock’s Silver Savings account, for example, paid 5.75 per cent in January but has since been cut to 5.02 per cent.

Inflation has been back in the news most of this week, as it hit the highest level since UK records began. But many people have been feeling the squeeze without needing a number to tell them the cost of living is soaring.

There’s never been a better time to get your finances in order and it’s not something to keep putting off. Stick the kettle on and make a list of your income and all your outgoings. Then look at the balance and your outgoings in particular. Work out if you can make savings anywhere - either to free up your cash flow, help reduce any outstanding debt or simply to keep for a rainy day (the forecast’s not looking too hot after all).

Our free Wonga budgeting tool should help and it’s been designed to take the pain out of doing the maths. You can download it from our borrowing advice section. Go on, it won’t bite!

Your credit history can be a big factor in the cost of borrowing. Like a school report, good behaviour is rewarded, but if you don’t play by the rules it’ll be noted by the credit bureaus and your grades will suffer!

Lenders may penalise you with higher interest rates, or refuse to lend you anything as a result of a poor credit rating, although it’s worth noting that many banks will be looking to assess your potential profitability as much as any risk of non-payment!

Your credit history looks at current debt, bill payment and a number of other factors. It may seem strange, but not using credit can be as bad for you as behaving badly with it. Lenders are looking to rate your reliability in the past, so if you’ve not yet proven you can be trusted you’ll be classed as higher risk.

Using Wonga.com can actually help improve your credit rating - and fast. This should never be the sole reason for applying for a cash advance of course, but it’s a very useful bonus and could mean better deals from potential long-term lenders in the future.  

Wonga is good for your credit rating because we carry out a credit check as part of our sophisticated decision process. When you take a short term loan from Wonga we create a SHARE account, which is a way for lenders to see the past behaviour of potential customers with other companies. Thanks to our hi-tech systems we update this information very rapidy with good news, everytime you repay a cash advance on time.

It means other potential lenders, such as mortgage providers, banks and credit card companies, get almost instant visibility of your trustworthy use of our service. Anecdotal evidence from testers and customers suggests it’s a very quick way of improving your ‘FICO‘ score, which is a rather mysterious rating used by some credit bureaus and can play a deciding role in applications with some lenders.

An article on thisismoney.co.uk paints another gloomy picture of Britain’s economy today, with poor growth in the services sector and a dissapointing bank holiday weekend for retailers…

“There was also grim news on the High Street in the wake of a miserable bank holiday weekend for retailers in London and around the country.

“Exclusive research for the Evening Standard by SPSL showed Saturday was particularly bad in the capital, with shopper numbers down 3.8% on the equivalent day last year.

“Retailers fared slightly better on Sunday when footfall was down 0.8%, but the improvement could not hide the pain on what was seen as a vital weekend for struggling stores.”

Consumers are certainly starting to feel the pinch in a very real way. The rising cost of gas, leccy, petrol and grub, plus uncertainty over housing and tightening of lending criteria by banks are all contributing. It’s a sensible time to minimise your long-term credit commitments as far as possible - credit cards, overdrafts and bank loans.

It’s worth making a list of what you owe, who you owe it to and what the repayments are. You should also make sure you find out the early repayment terms of any such commitments and work out if you can reduce some of the balances or even pay off a loan ahead of time without being penalised.

Although it’s easier said than done, it’s worth cutting down on any luxuries in the short-term if it means you might be able to reduce your outstanding debt during turbulent times. Use Wonga’s budget tool to assist you.