Wednesday 29th of April 2009
It is becoming increasingly difficult for consumers to consolidate their debts, fresh research has revealed.
Figures from moneysupermarket.com have shown that interest rates on loans for this purpose have risen over the last year, while lenders are becoming less willing to provide them.
Those who are struggling with their debt but find that they are unable to refinance may wish to seek advice, as there are non-borrowing solutions available - including IVA help - that can help them avoid bankruptcy.
According to the moneysupermarket.com study, the cost of the average loan has increased over the last 12 months despite the Bank of England lowering the base rate.
Tim Moss, head of loans and debt at the price comparison site, remarked: "The best loan rates have risen 1.24 per cent to 8.68 per cent … making them more expensive for people who re-consolidate their debts every year."
Capital Economics recently warned that banks are likely to become even less willing to lend in the coming months, which could lead to a greater need for non-borrowing options to consolidate debt.
- 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
- Can't stop spending beyond your means? IVA answers could offer a solution
