Thursday 16th of July 2009
Individual voluntary arrangement (IVA) help may be required for Britons who have unsecured loans.
Moneyfacts.co.uk claimed that the average rate on a £5,000 loan has increased by 3.7 per cent since July 2007, which could result in some borrowers needing IVA advice if they struggle to meet their loan repayments.
Although lenders such as Barclaycard, the AA and Direct Line have pulled out of the unsecured borrowing market, loans are still available for Britons.
However, the average rate on a £1,000 loan has increased by 1.9 per cent over two years, while there has been a two per cent rate rise for £25,000 loans, the website revealed.
"Borrowers struggling with repayments will inevitably forgo repayments on unsecured lending first, while trying to maintain their secured lending commitments such as their mortgage," Louis Kaszczak, head of Moneyfacts.co.uk, commented.
When unsecured debt becomes too difficult to manage, an IVA could freeze the interest rate and set monthly repayments at a more affordable level.
It was recently asserted by Confused.com that credit card and loan repayments cost an average UK household £2,790 a year.
By Neil Burton
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