Borrowers trying to pay off more debt
Recent figures have shown that whist mortgage lending was up in October compared to September it appears that the residents of Great Britain are keeping focussed on paying off as much debt as possible.
Figures were released from the Bank of England, and showed that consumers are trying to rid themselves of various loans and credit cards debts in a bid to try and reduce their outgoings are their overall debt levels.
The number of mortgages that were granted went up to the highest level since March of last year according to the figures.
However, overall lending levels were down, which officials have said indicated that people are less likely to take on debts in the current climate, and those that already have debts are looking to get their debts repaid as quickly as possible. During the month consumers repaid £579 million worth of debt. This reflected the biggest overall repayment on unsecured debts since records began back in 1993.
Repayments on overdrafts and loans fell for the ninth month in a row in October. It is thought that there are a number of factors behind the drop in credit card debt as well, two of the main factors being restrictions on lending levels from credit card providers and increased wariness from borrowers with regards to taking on further debt. Remortgaging levels for the month were also down according to figures.
Howard Archer, an economist from Global Insight, said: ‘The record, and fourth, successive net repayment in consumer credit in October is clearly the consequence of many consumers’ desire to reduce their debt, low demand for credit and a lack of availability of unsecured credit from banks.’
Many people are also loathe to put their money into savings at present due to low interest rates, and instead are putting the money towards paying off debt.
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Today debts are required for almost every kind of economic activity. They are the backbone of any economy and strengthen the economic growth. These debts come along with an interest that has to be paid to the lender. There are many types of debts that are available to the borrowers today. The repayment of these debts is equally important, as incase there is a lack of payment there can be serious consequences.