Monday 4th of January 2010
Demand for unsecured credit like personal loans and credit cards dropped in the three months to December, but applications are expected to rise again as 2010 gets underway, a new report reveals.
The Bank of England states that this demand would also see availability of unsecured credit to Britons stabilising over the next three months, although relying on credit to help people get by with last year’s debt could prove unwise.
Rather than taking on more credit, Britons could decide to make a fresh financial start and an IVA could prove to be the answer to clearing debt.
Taking on more credit could be a route people take so they can keep up with climbing interest repayments. But an IVA can freeze interest rates on personal loans and credit cards, making repayments more manageable and easier to meet.
In the three months to December, default rates on unsecured credit dropped. This could highlight how more people are turning their attentions to clearing debt and an IVA could help prevent repayments being missed because they are at a more affordable level.
Keeping up with repayments can also help protect a family home and prevent further legal action from being taken by lenders.
By Ashley Littley
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Credit Action: Home repossessed every 14 minutes
