Consumers 'Should Take Out Loan Which Best Suits Their Needs'

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Article Title: Consumers 'Should Take Out Loan Which Best Suits Their Needs'
Author: Abbi Rouse
Category: Loans
Word Count: 500
Keywords: secured,unsecured,personal,loans,finance,credit
Author's Email Address: abbi.rouse@inter-financial.com
Article Source: http://www.articlemarketer.com
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Credit providers are being advised to ensure that consumers are in a position to make repayments on borrowing, it has been revealed.

According to a spokesperson for Citizens Advice lenders need to be "more sympathetic" towards those borrowers who suddenly find themselves unable to make repayments on personal loans and other forms of borrowing. The representative claimed that credit suppliers should look to negotiate with their customers if their financial situation changes suddenly and they cannot afford to meet monthly demands for money.

She claimed "a lot of lenders don't talk to their clients" even though when customers call to say that they are struggling to make repayments on loans and credit cards. "They [borrowers] don't expect to not be able to pay it. But what we find is that life events change their circumstances and it can happen very quickly; a divorce, illness, loss of job means that a 300 pounds payment a month suddenly becomes quite a burden," the Citizens Advice spokesperson added.

Meanwhile, those who are looking to take out a loan were advised to take the time to scour the market to find the product which most suits their needs. Consumers were also advised to ensure that they are fully aware of the various avenues of borrowing available to them such as the "difference between a secured and unsecured loan". Although the interest rate on a fixed-rate loan may currently be above the national figure, the representative claimed that by choosing such a product consumers will be able to know the exact level of their monthly repayments for the duration of their contract.

She added that those who choose a variable rate should check how much their monthly loan repayments could rise by should the Bank of England vote to hike interest rates over the coming months. However, those who find themselves developing debt management difficulties were advised to get in touch with their credit supplier as soon as possible. The spokesperson reported that borrowers should not begin to miss or stop making repayments as otherwise they could start receiving demands for money from their lender via letter or telephone. "Don't just borrow your way out of debt because it will get worse," she added.

According to figures by the advisory service, debt problems currently make up some 1.4 million of the 5.5 million consumers who come to visit Citizens Advice for guidance every year - a rise of 15 per cent from January 2006 with an average of 5,300 debt problems dealt with on a daily basis. Consequently, the average client was reported to have an average debt of some 13,000 pounds of debt - nearly 17.5 times their monthly income.

Statistics from financial charity Credit Action also indicated the average household is 54,771 pounds in debt, although this figure falls to 8,816 pounds when the money owed via mortgages is excluded. Meanwhile, lending was reported to have risen to 9.4 billion pounds over the course of April as Britain's personal debt increases by about 1 million pounds every four minutes.

Abbi Rouse writes for 1 Stop Finance Shop, a one stop Personal Loans Shop, with information on bad credit loans, and debt consolidation loans available on site. Visit Today: http://news.1stopfinanceshopuk.biz/
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