by News Team on April 2nd, 2008
The cost of borrowing money in the UK has been steadily increasing in recent weeks despite the Bank of England’s decision to cut the base rate of interest, it has been claimed.
According to data from MoneyExpert, the typical interest rate on an unsecured personal loan currently stands at around 11.4 per cent, which represents a rise of close to one per cent since the start of this year.
The rising cost of borrowing will make life more difficult for people aiming to become debt free and the price comparison firm suggests that the increases have affected loans of all sizes.
Highlighting why these issues offer cause for concern, Sean Gardener of MoneyExpert commented: “Over 180,000 people consolidate their debts every month, and the vast majority turn to an unsecured personal loan to help them control their finances.”
The Bank of England trimmed its base rate of interest in December 2007 and again in February of this year.
Posted in Creditor Behaviour, Debt Management, Personal Debt | No Comments »
by News Team on April 2nd, 2008
Taking on a debt consolidation loan can make sense for people with credit deals in place with a number of different lenders, according to one expert.
David Kuo, head of personal finance at Fool.co.uk, cited his own company’s research to point out that debt consolidation is the most common reason for British consumers to take out a loan.
Around 40 per cent of all the personal loans handed out in the UK are used to clear debt, but Mr Kuo has aimed to stress that such a solution requires a good deal of discipline.
“Rolling up several expensive debts into one affordable monthly payment can make sense if you are faced with a myriad of claims on your money,” he said.
“Consolidation loans can be a welcome lifeline, you need great discipline to stop it from being a noose around your neck.”
According to figures from the Insolvency Service, there were more than 10,000 Individual Voluntary Arrangements (IVAs) entered into in the UK during the second quarter of last year alone.
Posted in Creditor Behaviour, Debt Management, Personal Debt | No Comments »
by News Team on April 2nd, 2008
British consumers who are dealing with debt management problems are likely to have a difficult year financially during 2008, it has been suggested.
According to Callcredit, the rises in the cost of living and the reduction in the typical scale of disposal income among UK households is likely to see thousands of families being “squeezed from all sides”.
With this in mind the credit reference company is keen to see consumers around the country keep up to date with their own personal finance situation.
“Regularly checking your credit report is an essential part of a healthy financial lifestyle,” said Owen Roberts, head of consumers affairs at Callcredit.
The comments from the credit reference firm came after figures revealed by the Conservatives showed that disposal income levels have fallen by around £300 per year for UK households since 2006.
MoneyExpert recently advised consumers who are struggling to become debt free to prioritise clearing their most expensive credit deals.
Posted in Creditor Behaviour, Personal Debt | No Comments »
by News Team on April 2nd, 2008
Homeowners around the UK look set to face increased debt management problems in months to come as they look to secure a new mortgage deal, it has been claimed.
Around 1.4 million fixed-rate mortgage arrangements are expected to expire this year and for many people a new deal will mean higher monthly repayments.
The Council of Mortgage Lenders (CML) has suggested that many homeowners have already had to readjust their finances in order to take account of the “payment shock”, but many more are likely to face the same issues.
“Market conditions remain uncertain and borrowing costs are continuing to rise,” said Michael Coogan, director general of the CML.
“Borrowers need to plan ahead for higher monthly payments and look carefully at the options available to them,” he added.
Last week, price comparison firm moneysupermarket.com urged anyone who is worried about their ability to manage their finances to seek debt help links as soon as possible.
Posted in Creditor Behaviour, Debt Management, Houses and Mortgages, Personal Debt | No Comments »
by News Team on April 1st, 2008
Banking groups operating in the UK have committed to a new code of conduct that is designed to give consumers a higher standard of service.
The code was established by the Financial Services Authority, the Office of Fair Trading and the Treasury after a process of consultation and lending more responsibly is among its stated aims.
Many consumers have seen their debt management problems worsened as a result of lender actions and the charging of fees and it is hoped that the new set of rules will change the way banks deal with financially vulnerable individuals.
Furthermore, the aims of the code include improving credit assessment criteria and making sure that the terms of credit deals are made clearer to consumers.
Angela Knight, the British Bankers’ Association’s chief executive, commented: “This new banking code gives strong commitments that banks will lend responsibly and will help customers who may be heading towards financial difficulties.”
Last week, a report released by Help the Aged and Barclays showed that more and more British consumers are still facing debt management issues as they reach pension age.
Posted in Creditor Behaviour, Personal Debt | No Comments »
by News Team on April 1st, 2008
A majority of adults around the UK are cutting back on the amounts of money they spend on a monthly basis, according to recent research.
With millions of British households already struggling to deal with their debt management difficulties, close to 57 per cent of consumers are now looking to trim their spending, MoneyExpert reports.
A recent study by the price comparison firm found that around a third of adults plan to reduce the amounts they spend on going out and roughly the same proportion intend to stop splashing out so much on clothes.
In light of its own research, MoneyExpert has encouraged consumers around the country to deal with their personal loan and credit card debts as soon as they can.
“The credit crunch is moving on from being something that just affects bankers to having real effects on real people in the real economy,” said Sean Gardner of MoneyExpert.
Meanwhile, figures released by research firm GfK NOP last week indicated that consumer confidence in the UK has reached a 15-year low in recent weeks.
Posted in Debt Management, Personal Debt | No Comments »
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