Thursday 15th of October 2009
Individual voluntary arrangement (IVA) advice could be ideal for Britons in debt who may wish to make the most of low interest rates by paying off more of what they owe.
The Bank of England’s base rate is at an all-time low of 0.5 per cent - meaning homeowners with tracker mortgages are benefitting from having to find smaller repayments than usual.
And the advice from Rebecca Atkinson, writing for Moneywise, is: "If you have expensive debts - credit cards or personal loans, for example - then it might make sense to use the [extra] money to pay as much of this off as possible."
A surplus of money each month could be best spent by paying off unsecured debts which typically have a greater interest rate than the base rate.
IVAs can be applied to unsecured debts of more than £15,000 and aim to freeze interest rates and renegotiate repayment schedules so that debt can be paid off in a more affordable way.
For some, this may mean seeking IVA advice and paying off more than normal while the base rate is low.
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
- Credit card cost rise suggests IVA need could grow
