Tuesday 2nd of February 2010
Individual voluntary arrangements (IVA) could be required by a number of households after their average debt has been revealed as £18,722 when some form of unsecured loan is included.
The Credit Action report reveals that the annual growth rate of consumer credit stood at 0.5 per cent at the end of December.
Britons who are juggling a number of credit cards and personal loans may find an IVA answers their growing concerns about how to keep up with rising interest repayments.
IVAs freeze the interest rates on unsecured loans and credit cards, which could mean that a household income can stretch further and clear a larger proportion of debt than would have been possible without the assistance of an IVA.
The study by Credit Action shows that the average interest paid by each household on their total debt is around £2,620 a year.
According to PricewaterhouseCoopers, approximately 15 per cent of net household income goes towards interest repayments - a figure which an IVA may put an end to by freezing climbing annual percentage rate levels.
By Hayley Jones
- 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
- Loan rates 'still rising'
