BoE: unsecured loans up
26/10/2010More UK consumers could soon be looking for debt solutions such as an IVA or a Debt Management Plan (DMP), as the amount of people taking out unsecured loans has gone up.
The latest Bank of England's Trends in Lending report, shows that despite a fall in demand for credit card borrowing, this was offset by an increase in unsecured loans in the third quarter of 2010.
The difficulty of getting hold of a secured loan is believed to be one of several reasons people are pursuing this avenue, along with more pressure financially following the recession.
Chartered financial planner at Informed Choice, Martin Bamford, however, said he worried some consumers' lifestyles were at the core of increased borrowing - which could lead to the need for debt solutions.
Kevin Still, Director of Atlantic Financial Management says: "Unsecured loans as a method of debt consolidation are now very expensive with the gap between loan rates and credit rates becoming narrower. Borrowing more in the current climate should be carefully considered and you should take financial or debt advice in advance."
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