Posts Tagged ‘credit’

Consumers should take early action for a financially healthier New Year

Wednesday, October 19th, 2011

Every year there are huge numbers of people who make resolutions to resolve their financial problems, reduce their outgoings, and streamline their budgets. Already, there may be people who are planning to have improving finances as their main New Year’s resolution when 2012 comes around. However, for those that plan to stick to this resolution it could pay to take action now rather than wait for the New Year to actually come around.

By taking action early, those that want to improve their finances can start the New Year as they mean to go on rather than waiting until 2012 before taking any action at all to resolve their financial problems. One of the main ways in which consumers will be looking to improve their financial situations is simply through reducing their outgoings, which is easier said than done. However, there are a number of ways in which this can be done, and the earlier consumers take action the better.

One way to reduce financial outgoings is through debt consolidation, which involves consolidating all existing unsecured debts, such as credit cards, loans, and overdrafts, into one lower interest loan. This can help many people to reduce the amount that they are paying out on their debts each month and comes with the added benefit of making it easier to deal with finances due to having fewer creditors to deal with.

Another way in which people can streamline their finances is by switching various services to a cheaper plan or provider. This can include energy suppliesr, broadband and phone services, home insurance, vehicle insurance, and more. All of these little savings can add up to a tidy monthly sum, which can help to ease the strain on finances that little bit more.

Tags: credit cards, credit, New Year, creditors, month

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Direct debits can help avoid penalties on debts and bills

Monday, September 26th, 2011

For most people the variety of bills and debts that has to go out of their money each month can become very confusing to deal with. Most people have enough to deal with each day without having the constant worry of what is going out of which account and when. This is why so many people end up inadvertently missing payments or making late payments, which can lead to all sorts of problems.

One of the major pitfalls of missed and late repayments is that many companies will then impose a hefty fee on your account, which is money that you are essentially paying out unnecessarily. Another issue with this is that it can impact heavily on your credit rating, which can of course have a serious knock on effect on your ability to get affordable finance and credit in the future.

The debt levels that consumers and households are facing have soared over recent years, with many struggling to find enough cash to keep on top of their debt repayments.

One official said: “It’s worrying to see such a high number of people needing to use so much of their income just to service existing debt.”

With consumers already facing overstretched finances due to their debts the last thing that many can afford is added charges and fees for late and missed payments. Industry expert have said that setting up a direct debit for payments can save consumers time and hassle as well as helping to ensure that payments are never missed or late.

One industry expert said: “Setting up a direct debit helps consumers avoid missing payments and forking out significantly more than expected in interest payments and fees.”

Tags: late payments, future, pitfalls, Most people, credit, overstretched finances

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How to help ease the strain of debt

Monday, March 28th, 2011

For many people the strain of debt and financial problems has really taken its toll on their quality of life, and with soaring living costs, job losses, and frozen or reduced income the situation could get worse for many people. Finances have been overstretched in many households for some time and many industry experts believe that things could get worse for some households over the course of this year with the budget having delivered little by way of immediate good news for those that are struggling to keep their heads above water in terms of their finances.

However, there are ways in which consumers can help to ease the strain by taking control of their finances. There are a number of steps that you can take to try and reduce your monthly outgoings, which means that you will have more disposable income either to deal with living costs or to reduce your debt levels. Some of these measures are outlined below:

-      Switch your services: there are many services that you can switch to try and make reductions in your monthly outgoings, and it is surprising how much you can save collectively simply by switching  handful of services. This includes things such as your energy supplier, your broadband and television provider, your car insurance provider, and your home insurance provider. Whilst you might only save a fiver here and a fiver there it can all quickly add up to a fairly tidy sum over the course of the month.

-      Consolidate your debt: You may find that it is cheaper and more convenient to consolidate your various debts into one with a low rate consolidation loan. You can wrap up debts such as your credit cards, your store cards, any catalogue balances, smaller unsecured loans, and overdrafts in a bid to try and reduce overall interest and cut monthly repayments. You will also benefit from having just one repayment each month by doing this rather than a number of different payments to make to a range of providers.

-      Cut back on your luxuries: Despite the difficult financial climate many of us still have luxuries that we pay for each month. If things are getting really tight consider cutting out these luxuries even if only on a temporary basis. You can do things such as freeze your gym membership if you have the facility, cancel subscriptions, reduce your broadband and television service down to a minimum, and cut back on shopping.

Tags: television provider, smaller unsecured loans, credit, insurance provider, home, handful, financial problems

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Officials urge consumers to make use of their credit files

Friday, January 28th, 2011

The financial sector and climate in the UK is still extremely fragile, and for the millions of people hoping to get a loan or credit card things have become increasingly difficult. Research has recently been carried out into the level of rejection that consumers are experiencing when it comes to getting finance such as credit cards and loans.

The research was carried out by moneysupermarket.com and showed that over the past year over 25 percent of applicants in the UK had been turned down for a loan or credit card, which equates to around 4.5 million consumers. Officials are concerned that this could result in millions of people causing further damage to what may be their already damaged credit files, and this could further reduce their chances of getting affordable finance in the future.

Consumers are being advised to familiarise themselves with their credit file prior to applying for any form of credit, as the state of the credit file and history is one of the things that lenders will look at when deciding whether to grant a loan or credit card. This is why it is important for all consumers to make sure that their credit file is in a decent state before applying for credit.

An official from Moneysupermarket.com said: “The decision to borrow should never be taken lightly, but credit cards still have a huge role to play in the nation’s finances if used correctly. However, it’s worrying to see such a huge number of people being rejected for credit cards or loans, especially as you could avoid being declined by taking the time to research the best card for their needs. Rejected applications can have a damaging affect on your credit score and further reduce the chances of you qualifying for another credit product in the future.”

Tags: fragile, credit, credit files, credit score, time, damage, best card

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Avoiding credit card debt could cost you

Tuesday, January 25th, 2011

In the current climate, and given the financial difficulties that most people are facing, it is not surprising that so many people have strong concerns about their credit card debt. Many people have racked up huge amounts of credit card debt over the past couple of years, with many even using their cards to make payments on their rent, mortgages, and bills.

However, although the level of concern over the huge amount of credit card debt that many people are in has increased it seems that many credit card providers are determined to encourage cardholders to get into increasing levels of debt on their cards. This is because some providers are now charging people that do not clock up debt on their credit cards by charging what is effectively an inactivity fee – a fee that is charged for failure to use the card.

It is likely that a rising number of credit card providers will now start charging these fees given the new regulations that have been brought in to provide consumers with a fairer deal when it comes to their credit card debt. These new regulations will mean that credit card companies suffer losses, and many people guessed that providers would try and find new ways to recoup the cash, such as by increasing interest rates and applying fees such as these.

One industry official said: “Consumers that use their cards and cannot repay the balance in full often get charged very high rates on interest on their borrowing. On the other hand, those that are trying to keep their heads above water by not using their cards and avoiding debt may now be charged. It seems as though you just can’t win when it comes to some credit card providers. For people that only want a credit card for emergencies this could be a big problem, as they will have to either use the card, emergency or not, or face paying a fee.”

Tags: inactivity fee, credit, cardholders, balance, Balance transfer, official, couple

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Sensible Tips for Debt Consolidation

Tuesday, December 28th, 2010

When sensible tips for debt consolidation are used it is possible to get out from under the financial stress. These tips can help to clear up the outstanding debts by budgeting properly, not taking on new debt and rather than having 10 bills each month it is consolidated into one. (more…)

Tags: approach, financial, debt, estimates, Debt-snowball method, credit, financial obligations

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Low mortgage approvals could lead to falling property prices

Wednesday, December 1st, 2010

Industry experts have said that property prices in the UK could be set to fall again amidst low mortgage approvals. The news comes after figures were released showing that October saw the lowest level of mortgage loan approvals since February. The figures were released by the Bank of England, and showed that mortgage approvals had fallen for the sixth month in a row.

During the month the total number of mortgage approvals came to 47,185. In a consistent market the expected level of mortgage approvals for the month would be around 70,000. Industry experts have said that the mortgage market is still ’severely depressed’. They have also warned that property prices do not show any signs of improvement.

One economist said that six months of mortgage approval falls reflected the severe difficulties that the mortgage market was still experiencing, and added that things were unlikely to change for the better over the course of next year. Banks are becoming increasingly strict with regards to mortgage lending in light of fears relating to job losses stemming from public sector cuts.

Further reports have shown that those with smaller deposits are likely to continue facing much higher rates of interest on mortgages even though there are now more mortgage products available that there were when the country was in the midst of the recession.

One economist said: “The sixth consecutive monthly fall in mortgage approvals for house purchase underlines the message that the mortgage market is severely depressed. We expect it to remain that way throughout 2011. The troubles in the mortgage market are still with us. With little chance of a meaningful recovery in mortgage approvals for the foreseeable future, we expect that credit conditions will continue to weigh on house prices for some time to come.”

Tags: number, time, mortgage, way, light

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Is a debt management plan a good idea?

Tuesday, November 30th, 2010

It is not unusual these days for people to be in high levels of debt where they are struggling to meet repayments and they cannot make ends meet financially. There used to be a huge stigma attached to being in high levels of debt, but this is now such a common situation that people are now talking about their debts openly.

The number of possible solutions to help those that are experiencing difficulties in repaying their high levels of debt has also increased, and these days there are a number of options available to those that need help, advice, and assistance in order to get their finances on track and make their debts more manageable.

Debt management plans are one such solution and these plans could prove really helpful for those that have a range of unsecured debts that they are struggling to repay with a number of different creditors. There are a number of debt management companies in operation but you need to make sure that you do not go through a company that charges you for advice and to operate your plan, as otherwise you will end up even worse off financially in the long run.

You will find a number of charities and companies that do not charge a fee for debt management advice and assistance, such as Payplan, and these are the companies that you should go through if you are considering a debt management plan. These companies will go through your income and expenditure and will let you know whether you qualify for a debt management plan and how they can help you.

With a debt management plan your debt management company will work out how much you can afford to pay towards your debts each month, and you will then make this one single payment tom your debt management company each month. The debt management company then distributes the money amongst your creditors, paying them on a pro rata basis depending on the balance of your debt.

A debt management plan has its pros and cons. Obviously the main benefit is that you can cut your repayments dramatically each month, which will enable you to make your finances stretch further and pay your living costs, rent, or mortgage more easily. On the other hand you will be paying your debts for a lot longer than you normally would, so you will not be free of debt for a long period of time.

Tags: plan, different creditors, helpful, debt management, Stigma

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Mortgage lending remains subdued

Thursday, October 28th, 2010

The British Bankers’ Association has reported that mortgage lending remains subdued, and the decline in mortgage lending approvals continued in September. Concerns over the budget and government cutbacks is said to be having a serious effect on mortgage and other forms of lending, with many households being cautious in the current climate and shunning new borrowing.

The BBA said that based on the figures for September, and given the low level of consumer confidence stemming from the budget and spending cuts, activity in  the housing market was likely to remain subdued in the months to come, and in addition to mortgage lending being affected there was little appetite for other types of finances at present including personal loans.

With the low demand for borrowing continuing the number of new mortgages approved for September fell from the previous month to 31,104. The BBA said that this was below average compared to the last six months. The BBA said that the low appetite for borrowing was also being seen with other forms of finance such as unsecured lending, with many too cautious to lumber themselves with more debt in the current climate.

The Spending Review that was announced by the chancellor George Osborne recently is likely to hit consumer confidence hard, as it will increase fears about job losses amongst other things. This will further hit consumers’ appetite for borrowing, and could see figures slide even further.

BBA statistics director David Dooks said: “Subdued mortgage activity and little demand for unsecured credit are a reflection of household uncertainties ahead of the Spending Review. Demand for new mortgages remains low despite more properties on the market and falling house prices.”       

Tags: personal loans, current climate, unsecured debt, debt, uncertainties, credit, hit

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Mums return to work to help with debts

Thursday, October 14th, 2010

According to a recent report a rising number if stay at home mums are returning to work by taking on part time jobs in order to assist in paying off debts. Figures were released by the Office for National Statistics recently, which showed that there had been a drop in the number of full time stay at home mothers, which indicates that more and more mums are taking on jobs in order to help with finances and debt repayment in the home.

The number of full time mums is said to have dropped to 2.07 million, and this is said to be the lowest level since records began back in 1994. Officials believe that part of the reason for many mums returning to work is that many breadwinners, which usually indicates their spouses, have lost work or hours in the last year as a result of the recession, making it difficult for some households to make ends meet financially without further work being taken on.

In a recent survey the main reason that mums gave for returning to work was financial restrictions, with many stating that they had felt that they had to return to work in order to pay debts and in particular to help with mortgage repayments. The survey was carried out by price comparison website uswitch.com, and the results show that more than 50 percent of mums that had returned to work despite having a child under the age of three said that they did so in order to help with debt and mortgage repayments.

One mum who has a child aged just two said: “Whilst I would have loved to have stayed at home for a while longer with my daughter it’s been tough over the past few months because my partner had his hours cut a few months ago. It’s put real pressure on us financially, so there wasn’t really much choice other than for me to go back to work.”

Tags: debt, credit, mortgage, mums

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Loans for financially excluded made available through new scheme

Thursday, September 23rd, 2010

A new government backed scheme has been launched to offer small loans to financially excluded consumers who cannot get finance through traditional means. It is hoped that the new scheme, which has been launched by the National Housing Federation, will reduce the number of people that are turning to unscrupulous and unregulated loan sharks in order to get finance.

The scheme, which is being piloted in the West Midlands for now, is called My Home Finance, and has been launched in conjunction with the Department for Work and Pensions. Under the new scheme eligible consumers will be able to borrow sums of up to around £500, and will then make weekly repayments to clear the debt.

Before being approved for the loan consumers will have to take part in a forty five minute interview, and this will enable officials to determine whether the person will be able to repay the loan. However, whilst the scheme could help the financially excluded to avoid loan sharks the rate of interest being charged on the loans is higher than the maximum charged by credit unions.

The interest on these loans will start at 29.9 percent APR. However, after the initial period it will rise to 49.9 percent APR. That said, the service could still prove invaluable for many. My Home Finance will also offer consumers financial and debt advice, which is another service that will prove invaluable to many people.

David Orr, chief executive of the National Housing Federation, said: “My Home Finance will provide an affordable, convenient and trusted option for people on lower incomes looking to build up their savings and borrow modest sums.” He added: “By offering fair loans at fair prices, we hope to offer an alternative to both loan sharks, who cynically prey on hard up families, and doorstep lenders, who are all too willing to lend cash to the desperate at hugely inflated rates of interest.”

Tags: debt, credit, Personal finance, loan

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UK households struggle with debt

Thursday, September 9th, 2010

According to a recent report UK households are increasingly struggling with personal debt problems, and many have no solution to help them out of their debt problems. A report has been released by the debt charity, the Consumer Credit Counselling Service, showing that nearly one third of people seeking assistance from the charity have been told that there is no solution to their financial problems.

Over 96,000 clients were counselled by the charity in the first six months of the year, and of these over 30,000 were told that there was no solution to their debt issues. The charity said that in cases such as these consumers needed to earn more but in many cases this simply wasn’t possible.

On average those that could not be helped had outgoings that were around £449 higher than their income. This was for a variety of reasons, such as losing income, having hours shortened at work, or having an extra expense such as a baby.

Debt problems in the UK have been further highlighted in a report from the UK’s Office for National Statistics, which showed that nearly four million households, equating to 20 percent – had no adult in work living in the household. The situation could be worsened as a result of the job cuts expected due to the cutbacks being made in the public sector as part of the emergency budget to cut the public deficit.

The Money Advice Trust said: “We have grave concerns that households witnessing a fall in income due to unemployment will start to default on debt repayments, and that we may start to see a sharp rise in personal insolvencies. Research undertaken by the University of Wales last year found there were 2m ‘iceberg bankruptcies’ in the UK – employed people who could not afford any fall in income without defaulting on debt repayments.”

Tags: households, credit, Consumer Credit Counselling Service, debt

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Consumers should shop around for personal loans

Wednesday, September 8th, 2010

Officials from a financial group have recently reiterated the importance of shopping around for the best deals for consumers who are looking to take out a personal loan. The advice comes from Sainsbury’s Finance, with officials from the firm stating that consumers could potentially save a small fortune by taking the time to shop around for personal loans rather than going for the first loan they come across.

Personal loan rates are said to have been rising recently despite the fact that the base interest rate is at an all time low of just 0.5 percent, and this is particularly true for smaller personal loans of less than £5000. Some consumers may find therefore that they are better off going for a slightly larger loan and paying less interest than a smaller loan that comes with a higher rate of interest.

With interest rates on personal loans on the rise it has become all the more important for consumers to compare the different rates and terms on loans from a range of providers before making a decision or commitment. Steven Baillie, head of loans at Sainsbury’s Finance, said that consumers looking for a loan of around £10,000 could potentially save a massive £1000 by shopping around.

He said that many people were paying over the odds for a personal loan even though they didn’t have to, and that by shopping around they could have saved a fortune on their overall cost of borrowing. With Sainsbury’s consumers are able to apply for a personal loan of between £7500 and £14999 with a typical APR of 7.8 percent.

Baillie said: “Ultimately, you must make sure you’re getting the best possible rate for your requirements and not paying over the odds, because you don’t have to.”

Tags: Sainsbury's, finance, Interest, loan, credit

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Why you should repay your credit card debt as soon as possible

Monday, August 16th, 2010

Although having a credit card is considered convenient and easy by most people it is all too easy to accrue debt on your plastic, and in many cases – especially in the current financial and economic climate – consumers find it difficult to repay the debt. However, those that have a high outstanding balance on their credit cards need to be very careful about how much they are paying off on the balance, as failure to make a big enough repayment could result in the debt lasting for years or even decades, and this is on a relatively modest debt. It is important to remember that by making minimum repayments you will not be making a dent in your outstanding balance but will merely by keeping things on hold, leaving you in financial limbo.

There is another major downside to paying only the minimum repayment on your credit card balance each month aside from the length of time it will take to make the repayments, and this is the amount of interest that you will pay. The longer your debt drags on the more interest you will be paying to the lender, and by sticking to minimum repayments you will end up paying an astonishing amount of interest on a relatively small debt.

Of course, not everyone can afford to make huge repayments on their credit debt especially in the current climate, and this is where it may be worth considering a balance transfer credit card that offers either 0 percent interest on balance transfers or offers a low rate of interest for the life of the transferred balance. This will make it easier for those with credit card debt to repay their debt without having to pay interest, as these cards offer a generous interest free period or a really low rate of interest until the transferred balance in repaid.

For those that feel that they can pay the transferred debt off within a year or so then a 0 percent balance transfer card may be best, and there are some that now offer interest free period of well over a year. However, for those that need to be very careful with their repayments and believe that they need to have a far longer period within which to repay the transferred debt a life of balance transfer card could be the ideal option.

Tags: Interest, credit, Credit card, debt

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A third of home equity pensioners pay off debt

Thursday, August 12th, 2010

Over the years many older homeowners who have had equity in their homes have drawn on this equity and used the money for a variety of purposes, from making repairs and improvements to the home to treating themselves to a once in a lifetime trip overseas.

According to a recent report many pensioners who are drawing on their home equity are now using the money to repay debt. Figures show that around one third of retired pensioners that are taking equity from their properties are now using the money to repay their debts. The research was carried out by the University of Birmingham, and was on behalf of the charity Age UK.

The most common reason for taking equity from the home for retired pensioners was still to carry out repairs, improvements, and maintenance in the home, and around half of all those taking equity from their homes were using the money for these reasons. Key Retirement Solutions, the equity release specialists, have said that this year older people will spend around £550 million on home improvements.

Like many other people a rising number of pensioners have accrued more debt over recent years as a result of the financial crisis and the recession, and using their home equity has become an effective solution for many of these older homeowners to repay the debt and ease their financial problems.

One consumer said: “My elderly aunt had built up a fair amount of debt in terms of credit cards and loans over the years, and now she’s retired repayments were becoming a struggle. However, she did have cash tied up in her home so rather than struggling along each month we advised her to use the money that was in her home to clear the debts and then spend some time enjoying retirement.”

Tags: credit, debt, equity release, finance

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Should those in debt consider an IVA?

Sunday, August 1st, 2010

Many people have found themselves knee deep in debt over recent years, and this results partly from the global financial crisis and the recession, both of which have had a huge negative impact on the finances of many households. For many the financial problems that have hit them over the past couple of years have resulted in huge levels of debt, with many people having accrued debt such as credit cards, overdrafts, and loans.

Whilst some of those that have accrued these debts may now be finding it a little easier to manage their money and honour their financial commitments due to the end of the recession there are still many others who continue to struggle financially, and who are finding it difficult if not impossible to make payment on their financial commitments.

For many of those that have accrued a lot of debt and are finding it hard to keep up with their debt repayments it is vital to find a solution that will enable them to sort their financial problem out as quickly as possible before matters get worse. There are a number of options open to those that have high debt levels, and one of these is known as the IVA or Individual Voluntary Arrangement.

With an IVA those that have above a specified level of unsecured debt with a number of different lenders could be eligible to make set monthly payments based on their income and outgoings, and after a period of five years the remainder of the debt is written off.

An IVA can be a great solution for those that are struggling to pay their unsecured debts, and can really help to ease the financial burden for those that are truly struggling. However, those considering an IVA should bear in mind that it is considered to be a softer alternative to bankruptcy and therefore should not be taken lightly.

An IVA should not be seen as a means of escaping debt, as the long term effects on your credit file and the various side effects can make life difficult. However, it can prove extremely effective for those that truly cannot make their debt repayments.

This interested in opting for an IVA can contact one of a number of debt charities or advice groups, who will be able to go through the criteria and can quickly determine eligibility for an IVA.

Tags: individual voluntary arrangement, credit, iva, debt

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Payday loans been helping struggling workers

Saturday, July 31st, 2010

The recent financial crisis has left many people struggling financially, and whilst those that are short of money would normally have relied on an increased overdraft or credit card to tide them over financially in the event that they ran short of cash or had emergency bills this is no longer an option for some people due to tighter credit conditions.

The tighter credit conditions that have come into place have caused a real problem for some people, particularly those that have no savings to fall back on if the need arises. However, for those that are working there is another option available in the form of payday loans, which are designed to provide a short term financial lifeline to those that need small loans on a short term basis.

Often people are hit with unexpected bills, emergency repairs, and other unexpected costs before their payday comes around again, and this can create a problem if they do not have the available funds to pay. With a payday loan workers are able to borrow relatively small sums of money to tide them over until payday comes around, which can be a real lifeline for those that would otherwise be stuck.

There has been some bad press about payday loans over the past couple of years, mainly connected to the interest rates charged. However, consumers are reminded that the loans are only very short term ones and therefore the amount of interest that is actually paid is not a huge amount in most cases.

One consumer said: “I’ve had to use payday loans on a few occasions when I’ve run short of cash and they have been really useful. I don’t have savings or family to borrow money off, and when emergencies come up like essential car repairs I would be stuck without facilities like this.”

Tags: credit, payday loan, loan, Interest

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Payday loans – friend or foe?

Tuesday, July 6th, 2010

Payday lenders have received a lot of bad press over recent years over the level of interest that they charge on their short terms loans for borrowers that are looking for money to tide them over for a short period of time. With many payday lenders the APR charges can indeed be very high, which can instantly put some people off. However, there are also a number of benefits to these loans, which could make them useful for some people.

Whilst the APR on payday loans can be high it is important to remember that the loans are designed to be used over a very short term such as several weeks. As the name of the loan implies this type of loan is meant to be taken on a short term basis to tide borrowers over until payday, and this means that borrowers will not really end up paying that much for their borrowing.

Payday loans can prove ideal for those that find themselves short of money one month or have unexpected bills or emergencies arise for which they do not have the funds. These loans are not designed to be used on a regular basis in the same way as many people use their overdrafts every month, as otherwise they will prove costly. However, as a one off or for occasional use they often provide an effective solution for those in short term financial need.

Another thing to bear in mind with payday loans is that there is usually no credit check required, so those with damaged credit will not have to worry. However, borrowers will need to prove their income, personal details, and employment details, as these loans are only available to those that are working and can therefore repay the loan when they get paid.

The upper limits on payday loans can vary depending on the lender and on the income of the borrower. Generally payday loans are for a limited amount of money, with upper limits generally tending to be around £1000 with many lenders. However, this is something that borrowers should check when looking at which payday lender to go through.

For those that need finance on a long term basis a personal loan or credit card is the best option, but for those that just need to bridge the gap until payday comes around again payday loans can prove to be a good choice.

Tags: Personal finance, payday loan, finance, loan, credit

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Consumers cautioned about debt as credit card availability increases

Saturday, June 26th, 2010

Consumers in the UK have been warned by a debt management and advice group about getting into debt as a result of the number of credit cards in the UK increasing. Figures have shown that there has been a sharp increase in the number of 0 percent purchase credit cards available, and there are concerns that this could lead to more people getting into debt.

Officials believe that the more relaxed lending criteria by lenders could also contribute to more people getting credit cards and then finding themselves in unmanageable levels of debt. This time last year there were only two credit cards that were offering 0 percent interest of more than ten months on purchases, but this has now increased to eleven such cards.

Whilst eleven may not sound like a huge number it does reflect an increase of around four hundred and fifty percent compared to last year, and with rules relating to lending becoming more relaxed there are concerns that more people could find themselves getting into credit card debt.

Officials believe that competition has returned to the credit card market, and once again lenders are vying for business from consumers, although not to the same level as they were several years ago before the financial meltdown. This could lead to more people applying for these cards, and eventually could lead to greater levels of debt of people are then unable to meet repayments.

However, whilst the debt company was concerned about debt levels officials from the firm also said that these 0 percent interest purchase credit cards could be useful if used properly.

The debt company stated: “If used properly, the 0% purchase deals for extended months is still a viable option for many consumers. However, it is important to stay within your limits and pay off the difference by the final month, otherwise you could be in for an unpleasant surprise in the form of increased interest rates.”

Tags: finance, debt, Credit card, credit

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Debt worries for private tenants

Friday, June 25th, 2010

Recent reports have suggested that debt worries may be increasing for private tenants in the UK, with reports of large increases in the number of private tenants seeking advice with regards to their debts. The data comes from the Consumer Credit Counselling Service, which claims that the level of enquiries regarding personal debt has increased.

The CCCS said that the number of debt related enquiries from those that are privately renting as well as those in social and council rented properties has been rising as a result of many of these renters being unable to keep on top of their repayments. The charity said that previously many enquiries had been from people that were homeowners and worried about losing their homes, but now this had switched to many of the enquiries being from those that were renting.

The CCCS is now concerned that there could be an increase in homelessness as a result of renters struggling with their finances. Those that fall behind on their rent as a result of their financial situations could quickly find themselves being evicted. The CCCS is urging renters to ensure that they always make payments on their rent before they worry about non-priority debts.

The charity also said that things could get worse for those that are on housing benefits, as the new coalition government has cut benefits including housing benefits, which could increase the difficulties that are facing many renters.

An official from the Consumer Credit Counselling Service said: “While we have always had more people in rented accommodation calling for help with their debts, they have usually been able to maintain their rent payments. This suggests that the personal finance situation for those in rented accommodation is deteriorating to the extent that they many end up homeless.”

Tags: debt, Consumer Credit Counselling Service, credit, finance

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Seeking advice on debt

Monday, June 21st, 2010

Over the past couple of years many households have experienced real financial difficulties stemming from the global financial crisis and the effects of the recession. Whilst the recession may be over and the economy is meant to be picking up there are still many people that are suffering financially, having got themselves into significant levels of debt over a short space of time.

During the recession and the credit crisis many people found themselves struggling to make ends meet financially, and this meant that many were forced to turn to solutions such as using their credit cards and overdrafts to meet day to day costs. This has left a huge number of households now struggling to make repayments on their debts, and with speculation over the base interest rate increasing this could be a very worrying situation for many.

It is vital for those that have debts that they are really struggling to repay to take action sooner rather than later, and the wrong thing to do – which sadly many people find themselves doing – is to bury your head in the sand and hope that the problem goes away. All too often this simply leads to the debt problems getting worse and worse, and getting to a point where the borrower ends up having legal action taken out against them.

In order to avoid this it is important to keep an eye on your finances and make cutbacks wherever possible so that you can ensure that your debt repayments are met. However, if you have gone through your finances with a fine tooth comb and cannot find any other areas where you can cut back it is important that you do not simply sit back and hope for the best. If you are struggling on a regular basis to make your debt payments it is advisable to seek advice as soon as possible.

There are two main courses of action that you can take to try and solve your debt problems. The first is to contact your creditors directly and see whether some arrangement can be made to ease the situation. Most creditors are aware of the problems that borrowers are facing, and may be able to reduce your payments by extending your repayment term. It may be a good idea to go in and see your lender in person, as you can then effectively explain your financial situation and get the problem resolved as quickly as possible.

Another option that is available is to seek advice from a debt advice agency, and there are a number of these available these days. These agencies will be able to look at your financial situation and outgoings and will be able to recommend an appropriate course of action, such as a debt management plan, and IVA, or simply suggesting ways of budgeting more effectively to ease the financial strain.

Tags: finance, credit, debt, Debt settlement

Posted in Debt News, Featured Articles | 1 Comment »

Bogus companies offering personal loans

Friday, June 18th, 2010

According to recent reports there has been an increase in the number of companies that are offering fake personal loans in the UK, and those being targeted by the bogus companies are people that would most likely be unable to get a traditional loan and are therefore more vulnerable or high risk. Officials are warning consumers to be on the lookout for suspicious loan companies and offers.

In the current economic and financial climate many consumers are more likely to fall victim to these bogus companies, as many will be after a financial lifeline, which they believe that these companies may be offering. Officials have warned consumers to look out for companies that target people through cold calling or via the internet or text messaging, as these are more likely to be the bogus ones.

The warning was issued by officials from the Citizen’s Advice Bureau, and there are concerns that people that are unable to get finance from mainstream lenders may easily fall for these scams in the hope of being able to get finance. However, many of these companies are charging upfront fees to customers to get them a loan, and then the loan never actually comes to fruition.

One official from the CAB said that many of these companies were targeting more vulnerable people, as they knew that they would be more likely to fall for the scam. She said that people needed to be careful of companies that carried out cold calling, emails, and SMS messaging, and direct mail campaigns in order to get people to take out a loan.

Consumers that are looking for a loan should always check the credentials and reputation of a company before making any commitment, and should always exercise caution if asked to pay an upfront fee.

Tags: bogus, finance, Citizen's Advice Bureau, credit, fee, loan

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Consumers urged to check credit before making loan application

Thursday, June 3rd, 2010

In the ongoing difficult financial climate many people have struggled to get finance, and no matter sort of finance consumers are applying for – be it loans, mortgages, or credit cards – there is a far higher chance of getting rejected for the finance these days than several years ago before the onset of the global financial crisis.

Lenders these days are being far more stringent with regards to who they will lend to, and the credit score of an applicant has become more important that every, as lenders are using credit reports to go through applicants’ past financial history with a fine tooth comb before making a decision on whether to give them the finance that the need.

With credit reports now playing such a big part with regards to the decision that lender making when deciding on loan and mortgage applications those that are considering applying for a loan are being advised to check their own credit before they make any application, as otherwise they could quickly be rejected and this could further damage their credit rating.

These days it is possible for consumers to order a copy of their credit report and score with ease and convenience online, and for just a few pounds. The information from the credit report can prove invaluable in helping consumers to determine whether to make an application for finance or wait until their credit has improved.

One former bank official said: “It has become really important to check your credit report before applying for finance these days, and by doing this borrowers can save themselves the hassle of making an application that is going to end up in the rejection pile. More importantly, however, they can avoid another black footprint on their credit file.”

Tags: credit score, credit history, credit, finance

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Lenders offer mortgages to those with slightly damaged credit

Thursday, May 20th, 2010

Since the onset of the global credit crunch the term ’sub-prime’ has become something of a swearword in the financial industry, with lenders who were once doling out loans to those with bad track records shying away from anyone with even slightly tarnished credit.

The sub-prime mortgage sector has practically died a death over the past two years, and this has left even those with slightly damaged credit struggling to get mortgage finance. However, according to a recent report this could be changing with a couple of lenders now considering ‘almost prime’ and ‘complex prime’ consumers for mortgage loans.

Several years have passed since the financial meltdown began, which was parked across the pond and was partly blamed on subprime lending to those that could not make repayments. However, reports claim that General Electric Co.’s GE Money unit and Investec Plc’s Kensington division are now considering lending to those with slightly damaged credit who cannot get loans through mainstream lenders.

Compared to 2007 mortgage lending had fallen by 60 percent last year, and many lenders had stopped considering those with damaged credit for mortgage loans or any other type of finances. This has led to those with credit problems experiencing difficulties when it comes to getting a mortgage. However, the lenders that are easing up on the rules have said that it will not go back to the way it was in 2007, as they will ensure that customers have better credit histories and can meet repayments.

GE Money said: “‘Subprime’ sends messages out that people are lending money to individuals who can’t repay it. Our customers have clear track records though some may have had minor credit blips.”

Mortgage brokers believe that in the current climate there is a big gap in the market for those that have slightly damaged credit histories, as often these people are not a big risk but can still struggle to get mainstream finance.

Tags: credit, mortgage, finance, Subprime lending, Mortgage loan

Posted in Mortgage News | No Comments »

Personal debt levels set to remain high

Wednesday, May 12th, 2010

Over the past few years many people that did not have any significant debt have found themselves lumbered with debts such as credit cards, store cards, and loans, having struggled to manage on their income during the last couple of years, which have been financially turbulent.

At the same time many people who were already in debt have found themselves even deeper in debt, having struggled to keep on top of their debt repayments and to keep on top of other financial commitments. This has left many households in a very difficult financial situation, and despite the fact that the recession is now officially over things are not set to improve any time soon.

In a recent report a financial industry expert, Chris Tapp from Credit Action, has stated that personal debt levels in the UK are set to remain high for the foreseeable future, as many people are still struggling with their finances and therefore do not have the resources to tackle their debts and make repayments on the money that they owe.

Although the credit crunch has resulted in a tightening of lending criteria amongst banks and other lenders, which means consumers are less likely to get finance and accrue debt, many are struggling to pay existing debts because of factors such as reduced working hours and job losses.

Mr Tapp also added that the increase that has been seen in unemployment levels could make debt problems worse, as consumers turn to sources of alternative funding such as credit cards and overdrafts in order to make ends meet.

Tapp stated: “I think we will still continue to see personal insolvencies very high for some time until employment begins to filter back into the system and more people can get back into jobs.”

Tags: credit, repayment, debt, finance

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Fewer personal loans being used for consolidation

Thursday, April 22nd, 2010

Recently performed research has indicated that compared to two years ago far fewer personal loans that are taken out in the UK are being used for the consolidation of other debts by consumers. The research was carried out by Sainsbury’s Finance, with the results showing a marked change in the number of people using personal loans to consolidate their other debts.

The research from Sainsbury’s Finance showed that a couple of years ago one pound in every thirteen pounds taken out by customers in the form of personal loans was used towards consolidation of other debts. However, this has now dropped to one pound in every fifty pounds, which marks a significant drop in the number of people using personal loans for debt consolidation.

Officials from Sainsbury’s Finance have said that whilst people are still taking out personal loans they are being used more for other purposes now rather than for consolidation of other debt. Home improvements are a popular choice for the use of personal loans, and more people are also using these loans more for the purchase of a new vehicle.

A Sainsbury’s spokesperson said: “Debt consolidation has always been one of the most common reasons for people to take out personal loans. But while more and more people are taking out a loan for other reasons, there has been a sharp decline in the proportion of people borrowing money in order to consolidate their debts.”

The spokesperson also went onto to state that consolidation was still something that those with a lot of debt should consider, as it could cut their monthly repayments down to an affordable level and could reduce the overall amount of interest that they pay on their debts. He added that it was important for consumers to shop around for the best rates when considering personal loans for any purpose.

Tags: finance, debt consolidation, loan, Sainsbury's, credit

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Many people in the UK hiding debt problems

Thursday, April 22nd, 2010

A recent report has suggested that there are now many people in the UK who are hiding their debt problems, with many of them struggling to make ends meet financially and hiding their debt issues from their families and loved ones. It is thought that around one in three people could be hiding problems relating to their debt levels and struggling as a result of their debts.

According to the report the value of this so called hidden debt mountain could be an astonishing £55 billion, adding to the already huge level of personal debt that consumers in the UK have overall. The average personal debt in the UK is now said to be just under £10,000.

Industry officials are now concerned how people with hidden debt will cope in this turbulent financial climate. Whilst the recession is over many people are still struggling financially, and the threat of job losses is still very real. For those that do have huge secret debts there is nobody close to turn to if things get unmanageable and this could create further problems for these people.

Those that do have high levels of debt that they cannot manage are being advised to seek advice from a debt charity or group, where they may be able to learn about alternative options that are available to them or get advice on better managing their finances and their debts.

One borrower who has a massive £36,000 of personal debt said: “None of my family know about the debt that I am in. A couple of years ago things got really tough so I had to go into a debt management plan, and my family still don’t know about my debt. I will be paying on the plan for about twenty years before I clear my debts. That’s a long time to keep a secret.”

Tags: debt, finance, secret, credit

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Spending could lead to increase in IVAs

Saturday, April 17th, 2010

It was recently reported that over the past few weeks Brits have been whipping their credit cards back out and hitting the High Street and Internet shopping sites with a renewed confidence. Whilst the recession is not long over and the effects of the global financial crisis are still affecting the nation consumers seem determined to spend their way out of the financial gloom.

However, whilst this increased spending may prove to be good news for the retail sector, which has suffered massively over the past year, it could also lead to consumers burdening themselves with debts that they will struggle to make repayments on. Some consumers are already burdened with debt, and additional debt could tip them over the financial edge.

There are now concerns that increased spending by consumers in the UK could lead to more and more people finding that they can no longer cope with their debts or make repayments on the amount that they owe. Officials believe that this could lead to an increase in the number of people applying for an IVA, or an Individual Voluntary Arrangement, which is a softer form of bankruptcy.

An IVA can have a profound effect on the credit rating and the financial future of the borrower, and should only be used as a last resort by those that are experiencing financial difficulties. However, the more people borrow the more they are likely to be desperate to escape their debt, and for some this may seem like the easy way out, as many fail to recognise the long term repercussions.

Of course, this doesn’t mean that those that have genuine problems with their debts and who are seriously struggling to make repayments do not have some form of help at hand. In actual fact there are many alternatives that consumers could look at which would not have as profound an effect on their financial future as an IVA or bankruptcy.

One potential solution is to contact creditors directly in writing or person, explain the financial situation, and look at making a reasonable repayment offer over an extended term – most lenders will consider this especially in the current climate.

Another option is to go to a debt management agency, preferably a charity run or government run one that does not charge fees. You may then be able to get advice to help you to manage your finances more effectively or may be able to get onto a debt management plan.

Tags: individual voluntary arrangement, credit, debt, finance

Posted in Debt News, Featured Articles | No Comments »

UK recovery dependent on bank lending

Friday, April 9th, 2010

Officials from the Federation of Small Businesses have said that the recovery of the economy in the UK is based heavily on lending from banks, but that banks are refusing to provide finance to many businesses even in cases where the business has a sound business and financial plan in place.

Since the onset of the global credit crunch there have been many issues that have affected the financial industry and both consumers and businesses have suffered when it comes to being able to get finance, which further deepened the recent recession.

The global credit crisis left the banking industry practically in ruins, and in order to shore up their finances many banks are reluctant to lend money to businesses and consumers even if there is just the slightest risk. One economist said that banks no longer had the ‘risk appetite’ and this was affecting their decision over who they would lend to.

The Federation of Small Businesses said that a lot of research had been carried out that indicated many businesses had been desperate to borrow money from banks but that in the difficult financial climate the banking industry had been reluctant to hand out business loans.

However, other reports have indicated that it is not only the banks that are to blame. Some have suggested that the appetite for borrowing money amongst businesses has also dropped, and that one of the reasons behind the poor business lending figures by banks was a reduction in the level of applications.

It is thought that some businesses may be steering clear of borrowing money from banks for one of a number of reasons, from fear of falling behind with repayments to high interest rates or simply a growing lack of trust and confidence in the banking sector.

Tags: Bank, credit, Economics, Business_Finance, financial crisis, finance

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Gloucestershire teens taking out illegal loans online

Friday, April 9th, 2010

According to recent reports teenagers in the Gloucestershire area many be going online to gain access to illegal loans. Police authorities in the area have said that they have been approached by four families so far whose teenage children had one online and taken out loans illegally through unregulated lenders.

One police official from the area, Sgt John Skilling, said that fourteen and fifteen year olds in the area had been visiting sites that were not even regulated and putting in details that then enabled them to take out loans for several hundred pounds.

It appears that the parents of the teens that have been taking out these loans have not even been aware of what was happening until they started receiving letters from the unregulated lenders demanding the money back. Sgt Skilling said that the sites could be very tempting for young adults hence their growing popularity amongst the teens.

Skilling added that these children could see how easy it was to get their hands on some cash, and because the companies that they were using were not regulated they were exploiting these youngsters. He said that awareness needed to be raised amongst parents with regards to the temptation of these sites and the ease with which teens were getting cash.

Skilling said: “Children see how easy it is to get money. If they went to a regulated, reputable company they would be asked for references and bank details, but there are sites out there which enable you to get unsecured loans. It’s exploitation of young people.”  

He added: “It could be as simple as ‘do you want to play this game online? Text 1234 to 1234’. Then, in small print, ‘Texts will cost £5’. Parents need to be aware of how tempting these can be to young people and how easy it is for them to get hold of money. Once it’s in place, someone has to pay the loan.”

Tags: online, loans, illegal, credit

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