19 January 2007
Money education charity Credit Action has released results from its recent research which shows that Britons' debt levels grow by £1 million every four minutes, with secured loans proving to be one of the key factors.
Secured loans account for around £1 trillion of the nation's debt and Credit Action told the Evening Standard that it is concerned that many borrowers are being tempted to take out loans they can ill afford.
Britain's debt mountain, combined with the recent shock interest rate rise, means that it is going to be a tough year for a large number of consumers and with further rate rises predicted, consumers are being advised to make sure they are getting the best deal on any loans they have taken out.
The figures from Credit Action's research also revealed that the average household debt in the UK is £8,765, not including a mortgage.
Financial experts are also concerned that the rise in secured loans and personal debt could see vulnerable consumers being forced into looking at difficult repayment options, including controversial individual voluntary arrangements (IVAs).
The Office of Fair Trading has completed its investigation of over 200 IVA companies and found that 17 of them were falsely claiming that "up to 90 per cent of your debt may be written off" as well as not displaying enough transparency when it came to declaring their fees.
It has since issued a warning to the unscrupulous insolvency services, stating that they must remove the offending claims within the next four weeks or risk losing their licence.
If you're a homeowner and looking for a secured loan, uSwitch.com can help you find the loan that best suits your circumstances. Even if you've had credit problems, we may still be able to find you a loan through our our impartial loans comparison service.
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