Tuesday 2nd of March 2010
The average household debt in the UK stands at £58,040, according to the latest Credit Action report, a figure which an individual voluntary arrangement (IVA) could help cut down.
Included within this statistic are mortgages. But even when mortgages are excluded and unsecured loans are taken into account, the figure stands at £18,623.
People who have a number of debts of more than £15,000 may be able to clear a large part of what they owe through an IVA.
IVAs can be the answer to becoming debt free for many individuals. Unsecured loan repayments are merged into a single, reduced interest rate-monthly repayment, making borrowings more manageable.
Britons are also forking out a combined £187 million in personal interest repayments every day.
However, IVAs can freeze the interest rates on unsecured borrowings, further making personal loan repayments more controllable.
"According to PricewaterhouseCoopers the average household will need to spend approximately 15 per cent of net income purely to service the interest payments arising from this debt," the Credit Action report states.
By Chris King
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- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA advice could secure household finances for the future
