Tuesday 15th of December 2009
If you are short of cash and looking to get your hands on credit then you may find that lenders turn their back on you.
A new survey reveals that eight out of nine big lenders now only dish out loans to existing customers. And annual percentage rates have also shot up on personal unsecured credit, moneysupermarket.com states.
Rather than looking to lenders to sort out your money worries, you may find an individual voluntary arrangement (IVA) answers the problem of a damaged credit rating and closed lender doors.
Instead of relying on loans, repaying what you owe through an IVA could prove to be a more sensible option. An IVA can merge your previous loan balances into one, monthly and more manageable repayment, which could mean you no longer need another loan to meet all your financial commitments.
"We have also seen the average rates for personal loans increase across the board so consumers who are lucky enough to be accepted for a loan have to pay more too," states Tim Moss, head of loans and debt at moneysupermarket.com.
An IVA can freeze the interest rate on loan repayments, as well as store and credit cards. And when debt is repaid, your credit rating can improve again.
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
- Spiralling debt could be helped by IVA
