Abacus Daily Debt News

Archive for the ‘Debt Consolidation’ Category

Personal loans are hard to get, expert says

Tuesday, October 27th, 2009

The likelihood of many debtors being successful in their applications for personal loans is decreasing as creditors strengthen their lending criteria, an industry expert has observed.

Michelle Slade of Moneyfacts.co.uk stated that it is only those borrowers “with blemish-free credit records” that are likely to be taken on as new customers, a result of prolonged increases in unemployment and fear on the part of lenders that loans may be defaulted on.

“The upward trend in rates looks set to continue,” she said, adding that “anyone in need of a personal loan really needs to ensure they do their homework” to avoid losing out financially.

Ms Slade went on to note that £335 has been added to the cost of a typical £25,000 personal loan in the last six months.

Some overdraft charges also appear to be on the rise, with Halifax and Bank of Scotland recently announcing plans to bring in daily charges of £1 for all accounts with an overdraft of £2,500 or less.

Many debtors should consider  debt management as an alternative to further borrowing . Debt management  consolidates payments into one lower amount , but does not increase the size of the debt.

By Sarah AdieADNFCR-2168-ID-19428477-ADNFCR

January ‘busiest time for debt consolidation’

Thursday, January 22nd, 2009

The start of the new year is the busiest time for people taking out personal loans to consolidate debt and apply for debt management plans.

Sainsbury’s Finance, which has just reduced its online personal loan deal to 8.1 per cent typical APR, has noted that January is a peak time for people seeking to clear their debts.

The company stated that it offers one of the most competitive deals currently available on the market, with the new rate applying to loans of between £7,000 and £25,000.

“Debt consolidation is always a good idea if you have multiple sources of debt, maybe a store card and credit card or a historical loan,” commented Steven Baillie, the head of loans at Sainsbury’s.

He added that consolidating non-secured debt using one of the firm’s loans “could save you hundreds”.

Meanwhile, several high street banks have announced they will no longer offer single premium payment protection insurance alongside loans.

Abacus Comment:
We do not agree that “Debt consolidation is always a good idea”.

Sometimes? Yes, always? No.

What about if the debts are growing  year on year and the debtor is consolidating for umpteenth time? If  no one ever took out a consolidation loan then they would be fewer people with debt problems in the UK today.

Consolidating debts into one loan gives debtors less room to negotiate should they fall into arrears. This  means a debt management plan or IVA is no longer an option.

1 in 4 Borrowing To Consolidate Debt Go On To Borrow More.

Friday, April 4th, 2008

A quarter of people taking out a loan to consolidate their debts go on to borrow more, according to a survey commissioned by Uswitch. (more…)

Biased Debt Advice From The CCCS?

Thursday, January 24th, 2008

The Consumer Credit Counselling service uses its charity status to boost its claim to be champion of the struggling debtor, but is the advice it gives always the best advice?

(more…)

National newspaper survey bemoans lack of service from free debt advice organisations

Wednesday, November 21st, 2007

The Sunday Express ran an article on 18th Nov 2007 on the responses from some commercial debt advice organisations against some free organisations. (more…)

Debt Jugglers start to feel squeeze

Thursday, November 15th, 2007

Credit card “rate tarts” who rely on being able to shift their debts on to a succession of temporary interest-free deals could struggle to get accepted for a new card as the credit crunch hits plastic, say experts. (more…)

Be cautious with home equity loans to consolidate debt.

Thursday, August 16th, 2007

If you fail to maintain payment you can’t use a debt management company to help you out.

Remember that a secured loan is secured from the lenders point of view, not yours. They have the security of knowing they can force the sale of your home should you fail to maintain payments.

Turning unsecured dent in secured debt, so to can spread the payment over a longer period may seem to be a solution to unaffordable credit repayments, but the consequences of not being able to maintain payments are worse. A least with unaffordable unsecured debt, you can use the services of an debt management company to get payments reduced, but they can’t help with secured borrowing.

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