‘Loans’ News
Secondary loans could spell trouble for homeowners
Posted 2008-05-6
Housing charity Shelter has warned that the number of repossessions this year could come close to the record of 59,000 set in 1993, due to secondary loans being taken out by homeowners over the last few years.The organisation claims that during high property inflation, many homeowners took out secondary loans to cover the cost of home improvements and to pay off debts such as credit cards.Shelter claims that almost 20 per cent of repossession orders passing through the county courts are against people who have secondary loans secured against their homes and up to 53,000 properties could be reclaimed.Adam Sampson, chief executive of Shelter, said that the actual number of repossessions could are likely to be much higher than previous estimates."We are finding lots of cases where lenders of other financial products are taking action themselves. And those ones, by and large, are not counted in the statistics; but they will add substantially to the total number of people who lose their homes," he said.Shelter helps tenants and homeowners fight for their rights concerning property by offering advice and campaigning....
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Credit crunch sees fraud increase
Posted 2008-04-30
The UK fraud prevention service has claimed the effects of the credit crunch have contributed to more consumers lying on application forms for loans and credit cards.CIFAS claims there was a ten per cent increase in the number of fraud cases compared to 2007, with 52,286 reported cases.The BBC claims that lies on application forms have risen from 19,239 in the first three months of 2007 to 21,870 this year, representing a 13 per cent interest.Chief executive of CIFAS, Peter Hurst, suggested that the current financial climate is driving people towards this dishonesty."Because people are getting into debt earlier, and because the credit crunch has diminished their access to finance, they are now resorting to fraudulent applications for funds," he said.The most common lie was found to be a failure to disclose a previous address, where the applicant may have a poor credit history.CIFAS comprises 270 members across banking, telecommunications and credit card sectors....
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Personal loan rates increase
Posted 2008-04-28
New figures have shown that the interest rates on personal loans have increased, with a number of lenders raising their rates.Barclaycard, Lombard Direct and NatWest are just a few of the companies who have pushed their rates up in the last two weeks, according to personal finance information provider Moneyfacts.Michelle Slade, an analyst at Moneyfacts, believes that personal loans are now starting to mimic mortgages in terms of increases in the interest charged."Its not only mortgage rates that continue to increase, so too have the rates and monthly repayments on personal loans. Since the beginning of the year more than half of lenders offering personal loans have made changes to their rates," she said.Ms Slade did note that some providers had "bucked the trend" by reducing their charges, such as Yorkshire Bank.Recent Bank of England data revealed that the value of personal loans in the UK had fallen by more than 50 per cent in March....
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Number of secured loans increases
Posted 2008-04-24
The number of people in the UK taking out secured loans over recent years has risen, it has been claimed.Quoting research from Alliance & Leicester, the price comparison site Onlyfinance.com claims that more people are moving away from taking out unsecured loans.It states that the increase in secured borrowing is a result of the credit crunch and the continued uncertainty in the financial markets.Research by Alliance & Leicester discovered that "overall borrowing trends are moving away from unsecured debt, while secured lending continues its rapid pace.Figures also show that secured loans are proving to be a popular method of debt consolidation for many in the UK, according to the site.It claims that the fact that secured forms of borrowing reduce the ability to acquire further debt appeals to many consumers, as well as the fact that interest rates can be significantly lower than on an unsecured loan.Recently released figures from the British Banking Association revealed that borrowing on personal loans declined by 0.2 billion in March....
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Debt to double for Brits in 2008
Posted 2008-04-15
About one million people in the UK have "problem" debt, according to a new report, and this is set to increase over the year. The study, entitled UK Problem Debt and conducted by debt management solutions firm TDX Group, has revealed that the number of Brits struggling with their debts will double during 2008. ...
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Students warned over bad credit rating
Posted 2008-04-8
A leading student financial charity has warned the nations students that irresponsible spending could catch up with them.Alistair Lomax, executive director of UniAid, said that students should do more to plan for their futures, ominously warning that "the fun you have now could come back to haunt you".He pointed to the guidelines sanctioned by his organisation which include getting to grips with budgeting skills while still at university and taking extra care to avoid superfluous borrowing.Mr Lomax added that students who turn a blind eye to paying debts run the risk of damaging their credit rating, which "will affect their ability to borrow later on in life"."[It is important] to make use of all the support available, so that you come out of university with a positive credit rating," he emphasised. "Be responsible, because it will have an impact later on."Recent research by the debt charity found that average graduate debt currently stands at £17,500....
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FSA clamps down on rogue lenders
Posted 2008-04-7
The Financial Services Authority (FSA) is to begin clamping down on the actions of unscrupulous lenders, it has been confirmed.In what has been described as the "biggest shake-up of the consumer credit market for more than 30 years," the FSA is launching a series of new drives aimed at weeding out firms who intentionally offer irresponsible loans."There will be more protection for people who get caught out by rogue lenders who pretend to play by the rules but act like loan sharks," affirmed John Hutton, secretary of state for business and enterprise.He listed examples of behaviour which has been deemed unacceptable, including the use of pressure sales tactics, unfair terms and conditions, unreasonably high interest rates and intimidating debt collection practices.Under the new regulations, whose launch coincides with the start of the new financial year, the Office of Fair Trading will be able to fine unscrupulous lenders as much as £50,000 as well as stripping them of their licences....
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Loan approvals ‘forgo income checks’
Posted 2008-04-3
UK banks issued approximately £20.9 billion worth of loans last year without checking peoples income, new research has suggested.According to uSwitch some 70 per cent of loan applicants were not asked to provide evidence of their earnings, while 15 per cent were not asked about their income at all on application forms.Industry experts have reacted angrily to the report, noting that the US sub-prime crash which kicked off the current credit crunch was brought about by irresponsible lending across the Atlantic.Mike Naylor, personal finance expert at uSwitch, bemoaned: "With more than 7,716 loan repayments being missed every day and record write-offs, you might think lenders would have learnt their lesson, but the potential profits have clearly been too good to resist."He went on to say that the new Banking Code - which is intended encourage responsible lending - "does not go far enough" to stop financial institutions from issuing crippling loans to consumers.Advocating tighter measures, Mr Naylor added: "Further credit checks could be costly However, it could be a small price to pay if it helps to curb the rapid growth of debt which is spiraling out of control....
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Consumer debt ‘becoming a lifestyle’
Posted 2008-03-27
Brits are so obsessed with borrowing money that the UK has been described by one wealth management firm as embodying a debt lifestyle. Addidi Wealth has said that even with the credit crunch making it increasingly difficult for consumers to borrow money, many Brits are showing little willingness to adopt a more financially responsible outlook. ...
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Credit-crazed youth ’saddled by debt’
Posted 2008-03-26
Young people are taking on unsustainable amounts of debt due to their obsession with credit, Scottish Widows has warned. The bank noted that parents of grown children are now giving their offspring an average of £12,500 in financial aid in order to keep them afloat. ...