Abacus Daily Debt News

Personal loans are hard to get, expert says

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 Adie