The figures were released by the Bank of England, and showed that in December new borrowing increased by around £52 million.

Officials believe that the main driver behind the increase in consumer borrowing in December was increased borrowing on credit cards. It is thought that the run up to Christmas and New Year fuelled additional spending on credit cards, as consumers rushed to buy gifts and other items for the festive season.

In addition to this the January rise in VAT may have also sparked a purchasing rush on items such as big ticket items for which many may have used credit cards to fund the cost.

Over recent months reports have shown that consumers have been focusing on paying off their debts rather than increasing their debt or saving money, and this has certainly been the trend during the economic and financial downturn.

However, December saw this trend reverse as many people hit their credit cards with a vengeance, thus driving up consumer borrowing levels.

One industry official, Andrew Goodwin from Ernst & Young, said that there may a relapse following the increase in consumer borrowing. He stated: “The small increase in consumer credit is likely to be connected to consumers bringing forward purchases to avoid the VAT increase and a relapse is likely next month. The household sector is continuing to deleverage and we expect consumers to provide little support to the recovery as it develops this year.”

New borrowing on credit cards and loans on the rise is a post from: Glitec Loans

These short term loans do not generally require a credit check, and many people that need some cash to tide them over until they get paid use pay day lenders to get the cash that they need. Doorstep lenders have also become increasingly popular in the current climate, where many people cannot get the loan that they need through a traditional lender.

However, there are concerns over the interest rates that are being charged by some doorstep lenders, which can lead to low income families – often the ones that rely on these lenders – really struggling to repay the money that they owe. It has now been revealed that these lenders could face having the rates of interest that they charge curbed following proposals that are set to be discussed in the near future at Downing Street.

The Better Banking Coalition has put the package of changes forward, and the group is focussed on getting ‘fair access to credit for all’. The group comprises social enterprises, voluntary groups, and community organisations. Both doorstep and pay day lenders who focus on short term loans for those that would struggle to get money from a mainstream lender will be on the agenda with regards to curbing the rates of interest that they charge.

A spokesperson for the coalition stated: ‘In the worst case, these rates can run at 9,000% a year, and 1,000% is not unusual.’ She added: ‘Financial institutions are not lending enough to enough people and that is having a huge impact. The Government has been working on the issue of financial exclusion for many years, but we do not feel that existing measures are strong enough.’

Interest rates to be curbed on pay day loans is a post from: Glitec Loans

The news is not all good, as rates on personal loans are still at five year highs. However, according to reports they have now fallen to their lowest level since the Bank of England cut the base rate to its current low in March of last year.

A number of lenders are said to have cut the rates on their personal loans recently, which will prove good news for anyone that is looking to borrow money. The loan rate cuts have been applied by both mainstream lenders and some other lenders such as supermarket finance sectors, and amongst the lenders that have reduced their personal loan rates so far are Nationwide, Halifax, Sainsbury’s, and Tesco.

Based on Moneysupermarket.com tables the average rate that is now charged on the top ten loan deals is now 8.35 percent on a loan of £7500. This is the second highest rate recorded since 2005, when the average rate was 6.3 percent, with the highest being seen at the start of last year when the average rate was 8.42 percent.

It has also been pointed out that in 2005 the base interest rate was far higher, and this meant that the profit margin for lenders was only slight coming in at around 1.55 percent.

These days, however, with the base rate being so low the profit margin for lenders has soared to around 7.85 percent. Many of these loans are also only made available to those that have the best credit ratings, and those that have blemished on their credit records can expect to pay a significantly higher rate or may find that they cannot quality for a loan at all.

Reductions being seen in personal loan rates is a post from: Glitec Loans

Three such schemes were brought into play in 2007, and the scheme about which many tenants and landlords are concerned in the Tenancy Deposit scheme, which is the biggest of the three independent schemes.

The schemes were set up to protect the deposits of tenants, and with this in mind landlords that thought they had a right to keep any or all of a tenant’s deposit would have to provide evidence of the damage or arrears for which they intended to keep the deposit. A decision would then be made with regards to whether the landlord had a right to keep all or part of the deposit. Independent adjudicators would be used to resolve any disputes with the claims.

However, it has been revealed recently that the Tenancy Deposit Scheme is cutting back on staff members in order to cut costs, and this is what is causing concern to tenants and industry officials with regards to whether the scheme can keep up with its current level of service. The scheme is said to be cutting down its employee numbers from seventy to just twelve, and the National Landlords Association is convinced that this could cause problems.

Officials from the Tenancy Deposit Scheme have denied that there will be any adverse effects from the changes to staffing, stating that it will help to make the whole process speedier. The TDS said: ‘We’ve brought adjudication in-house, which should make it a quicker process. We have a near 50:50 split on cases in favour of the tenant or landlord, so there is no bias.’

Landlord and tenants worried about tenant deposit scheme is a post from: Glitec Loans

The fall resulted in a 7.6 percent drop in the annual rate of net lending, which has been driven to its lowest level in a decade.

The figures in the Trends in Lending report showed that for the month of October there was a fall in lending by UK banks to businesses of £4.8 billion, and this was slightly higher than the fall that was seen in the previous month, which stood at £4.6 billion.

The Shadow Chancellor, George Osborne, said that the figures showed that many businesses were still in the throes of a credit crunch, and that the measures and steps that had been taken by the Labour government clearly hadn’t had the desired effect because businesses were clearly still struggling to get the credit that they needed from the UK’s banks.

Economist, Vicky Redwood, said that it was likely that in the near future lending to businesses would remain subdued, and that there was doubt that there would be any significant pick up in bank lending over the course of next year. She added that for the foreseeable future credit conditions would remain restricted in the UK, and that amongst the groups that would be most affected would be consumers and smaller businesses.

Following the release of the report George Osborne stated: “The continuing decline in credit to business… revealed today shows that all those Government recession schemes have failed and the credit crunch continues for many smaller businesses.”

Fall in lending to businesses according to central bank is a post from: Glitec Loans

The increase in the loan rates since the start of this year means that borrowers will end up paying more each month for their loan or will have to take it out over a longer period to keep repayments down.

Industry experts have said that whilst the base rate has fallen dramatically over the past twelve months, and has been at an all time low for the last nine months, this has yet to feed through to the personal loans market.

They have also said that there is a lack of supply with personal loans, as banks as being far more choosy over who they will give loans out to. Recent research suggested that around d eight out of nine banks were now only offering personal loans to existing customers, such as those that have current accounts, rather than to opening their loan products up to those that are not already customers.

The British Banker’s Association said: “The UK economy has changed considerably since the credit crunch began and it is still changing. Lenders price their loans according to the economic factors of the time, and although there is still aggressive competition for customers, there are also harsh economic realities they have to deal with. They still have to fund their loans using a mix of wholesale money and customers’ deposits, and neither of these options is open to them at anything like the Bank of England’s base rate.”

Cost Of Personal Loans Increased By Banks is a post from: Glitec Loans

The regulator stated recently that some lenders had been so reckless with their lending that between 30 and 60 percent of their borrowers had now fallen into arrears. The concerns of the FSA were voiced by Jon Pain who was speaking out at the annual conference of the Council of Mortgage Lenders.

Mr Pain said that this recklessness was part of the reason why the FSA has been bringing in new rules and regulations to further restrict mortgage lending and promote more responsible practices by lenders. However, the chairman of the Council of Mortgage Lenders had his own concerns to voice, claiming that the restrictions that have been brought in by the FSA are too tough.

The chairman, Matthew Wyles, said that he was worried that regulators saw lenders and intermediaries as the ‘drug dealers at the school gates’ of the mortgage market who were only interested in getting people hooked and making lots of money.

He added that the FSA was going too far with its regulations, and that it was wrong of them to brand self certification mortgages as liar loans because people that generally took out these loans were often in complicated situations rather than being dishonest.

Speaking about the decision to stop self certification mortgages Mr Pain said that this would not lock three million self employed people out of the mortgage market, as had been suggested. He added that genuine self employed people should have a way of proving them income anyway, and that the decision to stop self cert mortgages was based on ensuring people didn’t get lumbered with loans that they could not repay.

FSA voices concerns over recklessness of some lenders is a post from: Glitec Loans

She said that she contacted Yes Loans and went through some application details, and she was then asked for her bank account details.

Under the impression that she had been approved for the loan she gave her details to the loans officer, but after doing so she was put through to another member of staff who said that she had been turned down for the loan.

The second staff member told Louise that Money Worries, which was the sister company of Yes Loans, could help to get her into a debt management plan that would reduce her repayments and help her stabilise her finances, and that there would be an upfront fee for this.

Louise went on to state that the categorically told the staff member that she did not want to go ahead with this until she had discussed it with her partner.

However, when she received her bank statement she found that a sum of money had been paid out to Money Worries.

Louise said that she was outraged, because she hadn’t signed anything and had not even verbally agreed to go ahead with the plan. She said that the missing money caused them a lot of problems financially.

Officials from Money Worries disagreed, stating that she had agreed verbally to the debt management plan and that the company had subsequently carried out work on her behalf. The firm added: “We categorically deny that we take fees from customers’ accounts without them realising.”

Consumer felt duped by Yes Loans is a post from: Glitec Loans

The Treasury Select Committee has recently heard how the searches that are carried out on applicants looking for credit can adversely affect their credit files, and this often means that they do not get the advertised APR on the loan or credit card but a higher rate based on the risk that they pose to the lender.

Consumer groups have argued that the use of this risk based pricing, which is becoming more commonly used, it resulting in it becoming harder and harder for many customers to get a good deal on their borrowing.

It is also making it difficult for consumers to compare products, because if they apply for a loan or credit card and then turn it down because there are better deals out there this leaves a black mark on their credit report, adversely affecting their credit score.

The consumer groups have also said that a softer system needs to be in place where black marks are not left on credit files in this way, which means that consumers will be able to search around for the best deals without fear of having their credit score and file adversely affected.

However, lenders want the existing system to stay in place, as they say that they need to alert one another in the event that cash strapped consumers are applying for multiple loans or credit cards.

A recent study has revealed that many consumers are not even aware that making multiple applications or turning down credit can adversely affect their credit score.

Loan and credit card customers being penalised unfairly is a post from: Glitec Loans

However, despite these promises one bank appears to be making a mockery of the bailout by continuing to award huge bonuses to executives.

Like a number of other banks the Royal Bank of Scotland has been bailed out using the public purse, but has been in hot water a number of times as a result of its lavish spending even though it has run into problems and has had to be bailed out.

Last year the bank came under fire for throwing lavish parties where employees were wined and dined at a five star establishment and were put up in a posh hotel. This year is even worse, with the bank now hitting the headline as a result of the amount it is spending on its salaries and bonuses.

It has been reported that the salaries and bonuses that will have been handed out to RBS employees this year will have come to a massive £4 billion. In the investment banking sector of the bank the average worker will take home an average £240,000, and more senior officials are set to enjoy bonuses of between £1 and £5 million. According to reports these amounts even top those that were dishes out in 2007 before the financial crisis hit and the bank had to be bailed out.

The bank had to be bailed out with £20 billion of taxpayers’ money, of which almost a quarter will be used on salaries and bonuses. In a recent podcast the Prime Minister Gordon Brown said: “Banks must put lending to businesses and homeowners before making huge payouts to their staff.”

RBS bonuses fly in the face of government promises is a post from: Glitec Loans