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The average amount owed by every UK adult is £30,266 including mortgages, according to the debt charity Credit Action. That’s an incredible 133% of average earnings.
Even if you ignore mortgage debt, we still owe an average of £4,708 through credit cards, motor and retail deals, overdrafts and unsecured personal loans.
So we may all have an opinion on how the government should fix the country’s gaping chasm of debt, but it’s important for individuals to get on top of their personal borrowing too. So how do you go about it?
Face the facts
Do you know how much debt you have? This isn’t as flippant as it sounds; many of us hopelessly underestimate the amount of money we owe.
Begin budgeting
Whether you just want to rein in your spending or you’re tackling a mountain of debt, getting a clearer idea of your day-to-day costs is essential.
Avoid living from pay cheque to pay cheque and instead set out an amount you’re allowed to spend each week, then stick to it.
Pay the priorities
Hopefully your debt levels are manageable and you’ll be able to cut back on some unnecessary spending and repay it all quickly.
If you’re struggling to meet all your repayments, though, you’ll need to work out which are the priority debts.
Some debts are more important than others, namely the ones that could cause you to lose your home, have your energy or water disconnected or even go to prison.
Sort some savings
Are you spending more than you need to on household bills? By using a comparison site, the average car insurance customer can save £180 a year, while you could save as much as £325 a year through switching energy providers.
Cut credit costs
If your credit score is reasonably good (and it’s worth getting hold of a copy of your file to see exactly what it contains), then you could potentially move lenders and find a better rate of interest.
Don’t despair
Whatever your circumstances, it’s never too late to take action, so don’t despair.
January 19, 2010 at 11:21 am | personal loan | No comment
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Iceland’s Economic Crisis
Iceland will hold a referendum on whether to repay Britain and the Netherlands for the billions of dollars in loans they made to cover Iceland’s bank losses, the country’s government said Tuesday.
Iceland’s parliament passed a bill last week authorizing a state guarantee for repayment of the loans, which allowed Iceland to repay minimum deposit guarantees to investors in Icelandic banks.
January 11, 2010 at 8:20 am | personal loan | No comment
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Mortgages 1, Unsecured Loans, 0
The number of people in the UK taking out mortgages to buy a home rose again in November but the appetite for other loans and overdrafts continued to fall.
The Bank of England figures show that mortgage approvals stood at the highest level since March 2008.
There were 60,518 mortgages approved for house purchases in November, up from 57,718 the previous month.
But consumers continued to pay back unsecured loans, with consumer credit falling for the fifth month in a row.
Although credit card lending rose slightly in November, the lack of popularity of other loans and overdrafts meant that people paid back £376m more than they borrowed during the month.
January 8, 2010 at 1:32 am | Unsecured Loans, personal loan | No comment
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Personal Loans – Popular for the First Time in a Long Time!
People moan about expensive personal loans, pointing out that the gap between Bank Base Rate at 0.5% and the best loan rates at around 8% gives banks a record profit margin. But historically, loan rates are quite reasonable and are now only marginally above what they were two years ago when BBR stood at 5.5%
If you’ve overspent on your credit card this Christmas – this might be the best time to think about consolidating that debt.
January 6, 2010 at 1:25 am | personal loan | No comment
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Empty Pockets?
Unexpected financial expenditures can arise anytime. Consequently, the biggest problem that you can suffer is not being able to handle them on time. Sometimes you can deal with such expenses when you have enough cash available. However, there is always the situation that due to some previous default payments or having filed in for a bankruptcy, you are unable to get immediate financial assistance from banks and other related sources. So what is another alternative for you to use? Using the services of lenders that provide fast cash personal loans is your best choice.
December 21, 2009 at 2:46 pm | personal loan | No comment
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Borrowing Money? You May Need to Look Into IVA
Borrowers could require IVA help as they struggle to clear debts exacerbated by the rising cost of personal loans.
According to Money Expert, these consumers have been left to pick up the cost of the Bank of England’s decision to lower interest rates to just 0.5 per cent.
Pierre Williams, head of research for the website, said that the move by the Monetary Policy Committee may have been designed to limit the effects of recession on the economy, but it did little to help consumers relying on loans to stay afloat. He said: “Personal loan rates were as low as five per cent before the financial crisis took hold. “They have climbed since then and are likely to stay high into next year.”Mr Williams’ words come on the back of research by moneysupermarket.com indicating that the typical rate of interest attached to personal loans for £5,000 has risen to 10.78 per cent, more than double what it was before the recession.
December 18, 2009 at 4:18 pm | personal loan | No comment
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Reading Between the Lines
It’s common sense, but always check the paperwork on your personal loans – it’s well worth the time and effort… Make sure you get the right personal loan that works on your terms.
December 17, 2009 at 12:20 pm | personal loan | No comment
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“It’s not that I forgot….”
Seasonal research from Abbey has revealed that the economic downturn has led many Britons to cut back on Valentine’s Day spending.
But figures from the Halifax Credit Cards revealed that Britons not only spend money on eating out and gifts each February, but also on their own appearance.
The average card holder spent £43 on cosmetics and £38 on shoes in order to impress a date.
But there are still some big spenders around romantically shelling out sums that might require personal loans. Regional data from Halifax found that customers in the south spent £504 on holidays to woo their loved ones, while consumers in the north spent £186 on jewellery.
June 14, 2009 at 10:40 am | personal loan | No comment
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Bye, bye PPI
SOME of the country’s biggest high-street banks have withdrawn from the market for single premium payment protection insurance (PPI), in advance of an expected curb on its sale by the Competition Commission.
Although the loss of profits from sales of these policies could result in more expensive personal loans, the Commission is expected to outlaw the sale of single premium policies when it announces its final proposals to clean up PPI sales in the next couple of weeks.
PPI policies cover debt repayments if a borrower cannot work because of accident, sickness or unemployment, but it is alleged they have been widely mis-sold. The cost of the PPI is usually added to the loan and interest charged on this amount, significantly increasing the cost.
February 8, 2009 at 7:49 pm | Loans General Info, personal loan | No comment
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New car purchase – which is the best way?
Although the best way to purchase a new car is usually with cash, most people need to borrow at least part of the purchase price. There are three main ways to finance your car purchase. Each has positives and negatives, so it’s worth giving them each careful consideration before proceeding.
Hire purchase finance is effectively a loan which is secured on your vehicle, and which is paid back in monthly instalments over a set number of years. However you need to examine showroom deals very carefully as car dealers are often keen to sign customers up to hire-purchase agreements as they often receive hefty commission payments for every finance customer.
Personal Contract Purchase (PCP) plans, on offer from most car dealers, are worth considering. You put down a deposit, make monthly payments and at the end of the plan you can pay the final balance to keep the car, or hand it back and switch to a new plan on another new vehicle. This means you can change car every three years or so, but check the small print carefully. Some agreements limit mileage, stipulate service frequency and tie you to a particular insurance package.
Personal loans tend to provide the cheapest method of financing the purchase of a new car. Increased competition in recent years has seen interest rates fall and the advantage of using a personal loan to buy a car is that it is unsecured, so you don’t have to pay off your loan if you decide to sell your car early.
February 4, 2009 at 8:29 pm | Car Loans, personal loan | No comment
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