What does a credit crisis typically result in regarding loan availability?

A credit crisis typically leads to a sudden reduction in the general availability of loans. During such a crisis, financial institutions become more risk-averse due to concerns about borrowers' ability to repay their debts. As a result, lenders tighten their lending standards, making it harder for consumers and businesses to obtain loans. This action is driven by the desire to minimize losses and manage the risk associated with lending during uncertain economic times.

In contrast, the other options do not accurately reflect the implications of a credit crisis. For example, the notion of increased loans with fewer conditions is contrary to lenders' behavior during a credit crisis, as they are more likely to impose stricter lending criteria. Likewise, greater consumer confidence in borrowing is usually undermined during a credit crisis since potential borrowers may be wary of taking on debt amid economic instability. Finally, an expansion of loan terms would typically suggest a loosening of credit conditions, which does not occur in a credit crisis situation, where availability is reduced and terms are generally tightened.