Monday 24th of August 2009
Britons who have borrowed cash need to make sure they are not caught out by climbing interest repayments, it has been advised, a problem which an individual voluntary arrangement (IVA) could help with.
People who have overdraft debts or who have used personal loans or credit cards may find that if they have high interest rates, they could end up owing more than they borrowed in the first place, lovemoney.com noted.
When interest on debt becomes unmanageable for households, seeking IVA advice could prove beneficial. If undertaking an IVA is deemed right for an individual, the interest on unsecured debt can be frozen, allowing people to pay off their balances without fear of climbing interest.
The website suggested moving credit card balances on to a zero per cent interest credit card. However, financial expert Andrew Hagger recently told the Daily Mail: "If you have a clean credit record it may be possible to play the rate tart game for a while longer. But balance transfer fees are rising so borrowers should factor this in."
For borrowers who need to take more serious steps to tackle their debt, an IVA can freeze interest rates and reduce the money owed to different creditors into a more manageable monthly repayment.
By Ashley Littley
- 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
- IVA figures released by Insolvency Service
