Banks tempting customers towards debt

A number of banks have brought down the interest rates on their loans, which may encourage people to take on more debt and potentially need debt help in the New Year.

Since rising to record highs in the first six months of the year, the average rates of the top ten unsecured loans above £5,000 have steadily been decreasing, according to Moneysupermarket.com.

However, borrowers looking to take on £3,000 of debt have seen that the opposite is true, with an average rate of 15.07 per cent, compared to 13.9 per cent in April last year.

There are fears that, with Christmas approaching, people who want to buy a lot of gifts will take out one of these loans without considering that it may result in needing debt management help in January.

Debt expert, Kevin Still of Atlantic Financial Management, says, "There is concern that people with more serious debt problems are still borrowing to keep household finances afloat. People with serious debt problems should seek professional financial or debt advice."

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