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Thu 31st May, 2007
Posted in Bad Credit, Consumer Credit, Personal loans, Debt Consolidation, UK Finance, mortgages, Consumer debt, Homeowners, Property, Financial news, Borrowing, Personal debt, Debt management, House repossession at 10:27 am by admin
March’s inflation increased to 3.1 per cent which is set to trigger increases in bad debt and house repossessions according to figures from Experian’s independent economic consultancy.
“The rise in inflation heralds a further increase in interest rates to 5.5 or even 5.75 per cent, with even more increases on the way,£ comments Dr Neil Blake, Experian’s Managing Director. “Not only will interest rate increases have a dampening impact on economic growth and inflation, but there will also be a likely knock-on impact on bad debt. This is something that lenders will be well aware of, but many consumers will also need to consider carefully their future circumstances when assessing their financial position. Rising bills coupled with the existing and possible future interest rate rises should be taken into account by borrowers.”
Dr Blake continues: “This is a result of the current and predicted levels of debt relative to income in the UK and the impact of the increases in interest rates that have already happened. Even if interest rates fall back in 2008, as the current Business Strategies published forecast suggests, write-off rates and repossessions are still expected to continue increasing until 2009. Any further interest rate rises are bound to add further to future levels of financial stress.
“Too big an increase in interest rates could easily push the economy over the edge, leading to a situation where consumers lose their appetite for spending and banks lose their appetite for lending growth altogether. This scenario would almost certainly push the UK economy into recession, leading to an overshooting of the inflation target being replaced by an under-shooting. This is an outcome that is in nobody’s interest and is one that the MPC and the industry will be working hard to avoid.”
The entire financial community is set on edge to see what happens. Companies that issue bad debt loans and debt consolidation loans may continue to enjoy unheard of profits, while banks pick up the losses. In the end, the consumer is expected to be the biggest loser.
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Posted in Consumer Credit, Personal loans, UK Finance, Credit Card, interest rates, Financial products, Spending, Borrowing at 10:23 am by admin
Many people set out in search of the perfect or ideal credit card and become disappointed when they find that most credit card offers will only be able to offer just one benefit. There are many different types of credit cards available and you may find that there are some credit cards that are suitable for you, and other credit cards that are not suitable for you. With so many credit cards to choose from it can become a hard, and confusing, task to find the right credit card for you.
Whatever type of credit card you are looking for, whatever type of lifestyle you have, the amount of money you are looking to spend, or how you plan to use your credit card you will always want to find a credit card that offers a low interest rate, or APR. The APR is the amount of interest that you will be charged on your purchases, so the lower the rate, the better. It would be ideal to apply for a credit card with a 0% interest rate for the first 3 or 6 months. However with a 0% interest rate credit card, you will want to make sure that you are aware of the typical APR that you will be charged once the introductory period is over. You will also want to make sure you are aware of when the introductory period is over to avoid any interest charges.
You will also want to choose a credit card that is suited to your needs and interests. The interest rate is the most important aspect of a credit card, however if possible you will want to benefit from other offers from credit cards, such as a rewards program or an air miles credit card. If you know that you will be making regular purchases on your credit card and you will be paying off the balance in full each month, you may benefit from a cash rewards credit card.
Although you may receive offers from a credit card company that sound really good, must always read the fine print before applying for the credit card. You want to make sure that you make yourself aware of any hidden charges and fees that the credit card may be entitled to charge you.
If you are looking to make a large purchase and pay it off over time, don’t assume that a credit card is the best means of unsecured credit. A personal loan can offer the same introductory interest offer but over the life of the repayments, so shop around before making your final selection.
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Wed 30th May, 2007
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, interest rates, mortgages, Consumer debt, Property, Financial news, Borrowing, Personal debt, Bankruptcy, Debt management at 10:42 am by admin
The central bank said that the fear of a shock caused by global imbalances has diminished after growth accelerated in Europe and Japan and slowed in the U.S.
The bank’s assessment of the risk from consumer debt follows record bankruptcies exceeding 100,000 households in 2006. The ’significant rise’ in loan defaults is due in part to tighter lending standards, but the bank’s lending to high-risk consumers such as teens and the elderly has also been blamed.
There were fears that an increase in bad debts and the greater mortgage burden carried by many UK households, combined with a crash in the US sub-prime lending market, and a short crash in the Chinese stock market, could all bring the UK economy crashing to the ground.
However, the strong UK economy, and continued lending of personal loans and mortgages, has buoyed the economy. This is good news for many consumers, as it lowers the risk that interest rates will grow beyond the newly predicted 7 per cent.
The housing market is feeding the UK economy and causing an anomaly that has many economists worried. The high level of expendable income invested on mortgages has had an adverse effect on the retail industry. This may trickle through all segments of the economy, creating a long-term slow down.
The UK economy has traditionally been more self sustaining than most economies by some standards, leaving many analysts and economists predicting that foreign problems will not pose a serious threat to the UK economy in the near future.
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Posted in Consumer Credit, Personal loans, Banking, UK Finance, interest rates, Consumer debt, Student debt, Financial products, Spending, Unsecured loans, Borrowing, Secured loans at 10:28 am by admin
The cost of studying at a University has become more expensive and more people are finding it difficult to cope with the fees and other expenses involved with their education. That is why lenders are starting to offer students loans to help them pay for their education costs, such as books or their costs of living. There are many financial lenders who have aimed products at helping students financially throughout their years at University. These loans will help the students with their cost of living, it can help in the purchase of computers, books, fees, accommodation and other expenses that a student will be required to pay.
For students who want to pursue higher studies there are a number of lending agencies available throughout the UK that are willing to offer a student loan with good terms and low rates. You will find many sites online where you can apply for credit, or you can ask at your bank about student loans to help you pay for your costs throughout your years in University. If you are looking at studying for a master’s degree, you can also find loans that will help you pay for the additional expenses that are involved. You will find secured as well as unsecured student loans. However with a secured loan the lender will require an asset of equal value to the loan, which the student may not be able to provide, however often lenders will allow the parents of the student to use their home as a form of security for the secured loan. This can be risky for the parents of the students, so they will then urge them to sign on for an unsecured loan. Whatever type of loan you have, you will want to make sure that you will be able to meet the monthly repayments.
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Tue 29th May, 2007
Posted in Bad Credit, Consumer Credit, Personal loans, Debt Consolidation, UK Finance, Credit Card, mortgages, Consumer debt, IVAs, Financial news, Borrowing, Personal debt, Debt management at 11:22 am by admin
The number of county court judgments against debtors increased from 802,886 in 2005 to 1,022,166 in 2006, up 27 per cent. Recent figures reveal that individual debt rose to an incredible £1,310 billion in 2006 from £116 billion in 2005.
Court contractors who sell debtor’s information, and financial institutions who sell off bad debts compound this problem. Unfortunately, bad debt consolidation management has become a multi-billion pound industry.
EuroDebt, a questionable debt collection company, has a turnover of £13million. This company was subject of a BBC TV investigation, which filmed its agents charging customers thousands of pounds and implying they could get their debts reduced or even written off.
A reporter for the Inside Out programme posed as a client with debts of £17,000. A EuroDebt agent suggested he use his credit card to pay the company’s handling fee of £1,595, something independent debt counsellors consider “appalling and unethical”.
EuroDebt director Kevin Still said: “Under no circumstances would we recommend that anyone take out any additional credit.
“But it wouldn’t be unusual [to ask for postdated cheques] if somebody couldn’t afford to pay the instruction fee in one go, and we do allow a reasonable amount of flexibility in how they go about paying their plans.”
A spokesman for Information Commissioner Richard Thomas, who enforces data protection laws, said: “We will study The Mail on Sunday’s report carefully to consider if there is a case for tighter controls on those who have access to this data.”
Until recently the media only focused on the IVA industry as a whole. Now, they are targeting any company that victimises people who have borrowed too much on personal loans or mortgages.
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Posted in Consumer Credit, Personal loans, Debt Consolidation, Homeowner Loans, UK Finance, Credit Card, interest rates, Consumer debt, Homeowners, Financial products, Borrowing, Debt management at 11:17 am by admin
These days, you will see a lot of adverts advising you to consolidate your debt. Debt consolidation loans are big business and they have been growing in popularity very quickly over recent years. However, the most important thing of all about these debts is to remember that once you decide to take out a debt consolidation loan to repay the debt, you must on no account use the money for another purpose.
Debt consolidation loans are chiefly a good idea because the interest rate charged on them is a lot lower than what you pay on other debts, such as credit cards. However, you should also remember that they are a lot less flexible. If you take out a debt consolidation loan over a period of say three years, then you should bear in mind that there will be controls and restrictions on repaying the debt early. The likelihood is that the loan will be with you for three years.
It is also very important that you get the very best interest rate possible on the debt consolidation loan. Since the main reason for taking out the loan in the first place is because it has a low interest rate, you should ensure that it is significantly lower than your other short term debts such as credit cards, your over draft and your store cards. By shopping around you can get yourself a much better deal, so do not apply for a loan before taking the time to find the rate that is right for you. Many factors will affect the interest rate that you can get, and if you are a home owner, the rate should be below ten per cent.
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Fri 25th May, 2007
Posted in Consumer Credit, Homeowner Loans, UK Finance, mortgages, Consumer debt, Homeowners, House buying, Property, Financial news, Housing news, Borrowing, Secured loans at 9:21 am by admin
Every day, 500 Britons head to Spain in the hopes of enjoying the good life and building wealth.
But there are signs that a Spanish property crash is pending that could spell misfortune for the 761,000 Britons who live there and 230,000 who own homes there.
Pedro Solbes, Spain’s equivalent of Chancellor Gordon Brown, issued a statement ‘urging calm’. He believes that the big problem is oversupply.
City consultancy Lombard Street Research states that 800,000 new homes were built in Spain in 2006.
Bernard Connolly, chief global strategist at US finance giant AIG, prophesied a gloomy situation ahead: “Unless the ‘Ponzi scheme’ is to expand further, inflating the Spanish housing boom to ever more ludicrous heights, there will be a sharp fall in housing investment and employment in Spain — and there will be highly unfortunate financial effects. A ’soft landing’ for the Spanish economy is not possible. Spanish assets stink.”
Tony Gatehouse, chairman of Spanish property firm Medsea Estates, reckons British housebuyers would do well to avoid traditionally popular areas like the Costa del Sol and Marbella.
He said: “Property market values have dropped. There was a lot of mis-selling in 2005 and 2006 in so-called buy-to-sell schemes. This was where people were buying three properties off-plan and selling two — the idea being the profits from the first two properties would help you buy the third.
“To the ordinary Joe, after a glass of wine, it sounds a great deal. But lots of these people were not in a state to complete on the three. The effect has been a glut of properties in the market that were ’sold’, but not really sold, so prices are coming down.”
This is in addition to those Brits who took out homeowner loans or invested all their equity in Spanish properties which are now found to be ‘illegally built’ on green belt land. Those houses are potentially earmarked for destruction and even whilst standing are cut off from water and electricity supplies.
Many UK homeowners are holding large secured loans on their Spanish homes, and risk losing everything in the UK and in Spain if the market crashes.
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Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Credit Card, interest rates, mortgages, House buying, Financial products, Credit record, Borrowing, Secured loans, Debt management, Home Improvements, Missed payments at 9:13 am by admin
Using your credit card responsibly is important in building a good credit rating. If you are trying to rebuild your credit or if you are applying for a credit card for the first time, you will want to make sure that the next time you receive a credit card offer that you pay special attention to the terms as choosing the right credit card will help you build a positive credit history. This means that when you apply for larger sums of credit - eg a personal loan or a mortgage - you will be more likely to get a good rate.
If you receive a credit card application in the post, or if you find one online, and the credit card company is offering a low monthly interest rate you will not want to make an immediate decision based on the rate. The most important way to measure a good credit card offer is by comparing the credit terms, such as the APR, the interest free period as well as any finance charges such as late fees or cash advance fees.
A credit card is an important financial tool as it not only offers the convenience of shopping without carrying around a lot of cash, but it will also help you build the credit if the card is used responsibly. By paying off your balance each month you will avoid having to pay any interest rates or finance charges. These timely payments will also be reflected on your credit report showing your payment history as current, meaning that you have never missed a payment. This is very favourable amongst lenders. You can also help build a good credit history by making on-time payments for other forms of credit, such as your rent or your utility bills. By using these financial tools wisely, you will reap the benefits in the future when you buy a house or take out a home improvement loan.
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Thu 24th May, 2007
Posted in Consumer Credit, Personal loans, Debt Consolidation, Homeowner Loans, UK Finance, interest rates, mortgages, Remortgaging, Homeowners, Financial products, Property, Borrowing, Secured loans, Home Improvements at 11:13 am by admin
The process or remortgaging is when you transfer your outstanding mortgage debt from your existing loan to a new loan without moving home. Although it is common to move from one lender to another, it is not always necessary. Some of the reasons why you may want to remortgage are to save money with a better interest rate or you remortgage to borrow more money against the value of your property. Whatever the reason may be, by remortgaging you can obtain a better mortgage rate that will save on your monthly payments, it can also release equity in your property that can help pay for improvements or you can use remortgaging as a way to consolidate short-term debt that carry high interest rates which will reduce your monthly payments.
There are thousand of remortgaging offers available on the market making it a very competitive market. With such a competitive market for remortgaging, it is very likely that you will be able to find a mortgage that will give you a lower rate and help you reduce your monthly repayments. However before you think about remortgaging you will first want to understand what your existing mortgage payments include and know the terms of your current mortgage. This way you will be able to compare offers to ensure that you will be getting a better deal. When you remortgage there are some costs that are involved in the process. Besides the prepayment penalties that you can incur you will almost certainly will be required to pay a redemption fee to pay off your existing mortgage. Other fees that may be included in the remortgage are the lender’s arrangement fees, a valuation fee, solicitors’ conveyancing fees or a Higher Lending charge. Before selecting a remortgage you will want to compare the offer to what you are currently paying and make sure you are aware of any charges or penalties that you will have to pay.
Most importantly, if you are looking to borrow more money for home improvements or debt consolidation, remember to include term when calculating comparisons. Whilst your mortgage rate may look better than a home improvement loan, you will be paying the money back over the term of your mortgage, which could ultimately cost you more money than a higher rate, shorter term personal loan.
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Wed 23rd May, 2007
Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Credit Card, Consumer debt, House buying, First time buyers, Unsecured loans, Financial news, Borrowing, Personal debt, Debt management, Missed payments at 11:01 am by admin
Consumer debt is causing serious concern in the financial community. Debt has been a constant concern for many years, with the number of bad debts hitting record levels within the last six months, and consumers in both the single and household groups finding it harder to keep up with repayments.
The problem is not the levels of debt, but the levels of unsecured loan debt carried on high interest rate financial products, like store and credit cards.
According to a poll conducted for the Alliance and Leicester, consumers in their early thirties are carrying the brunt of the unsecured loan debts in the form of credit and store cards and personal loans. Adults around the 30-35 year-old-mark have the highest levels of unsecured debt in the UK. The survey reveals that these adults have accumulated an average unsecured debt burden of £5,863, which accounts for just over 30% of the national average.
The poll suggests that this group is most likely to miss repayments, make late repayments, and repay only the minimum amount on their financial commitments.
One official from the Alliance and Leicester said: “The early 30s are a transitional age where careers are taking off and before family responsibilities kick in. Many are buying their first homes at this point, but are also enjoying rapidly rising salaries and are keen to enjoy life to the full. Some, particularly those not trying to get on the housing ladder, may find themselves in financial difficulty as a result living beyond their means.”
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