'Tough Times' Ahead For Borrowers

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Article Title: 'Tough Times' Ahead For Borrowers
Author: Steve Smith
Category: Loans, Personal Finance
Word Count: 523
Keywords: credit,increasingly,difficult,to,obtain,secured,personal,loans,cards,uk,finance,loan,money,lenders
Author's Email Address: steve.smith@1stopfinanceshopuk.biz
Article Source: http://www.articlemarketer.com
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Despite moves to reduce spending via credit cards, many people may find themselves returning to such a form of borrowing, a new study indicates.

In the Precious Plastic 2008 report released by PricewaterhouseCoopers, it was suggested that should the cost of mortgages increase in the coming months a number of Britons will discover that their finances are stretched to beyond breaking point and so could resort to expensive plastic cards to supplement their spending. According to the company, levels of consumer indebtedness have doubled since the beginning of the century. Now the typical adult owes some 33,000 pounds via loans, plastic cards and other types of borrowing, whereas this figure stood at just 17,000 pounds in 2000.

However, the firm reported that fiscal difficulties could be set to increase even further. Suggesting that many households are on a fixed-rate mortgage deal and are already at "their borrowing capacity", when their contract expires PricewaterhouseCoopers indicated that their monthly payments could surge. The company suggested unless they fail to take steps to reorganise their borrowing, for instance through a debt consolidation loan, than such repayments could rise by 140 pounds. As a result, such a increase in mortgage costs could see many people struggle to make repayments on secured loans, utility bills and other constraints on their money.

Reporting on the findings, Richard Thompson, partner at PricewaterhouseCoopers, claimed that "tough times" lie ahead not only for consumers but also for financial services providers. He added: "Banks are continuing to take action in response to the rise in consumer debt by tightening their credit acceptance policies. Many consumers will find it increasingly difficult to obtain credit in the run-up to Christmas."

In addition, the company reported that levels of personal insolvencies could be due to "spike" over the course of next year. Although growth in individual voluntary arrangements has declined in recent months, it was suggested that this was due to delays in the processing of previously filed arrangements and "fairly flat levels of unsecured debt" since 2005. However, it was suggested that the rise in insolvencies could pressurise money lenders' bad debt charges, which in turn may affect those looking to make repayments on bad credit loans.

Following the report, those people who are concerned that a rise in their monthly mortgage payments will put them beyond the realms of coping with money successfully could be advised to take steps in reducing their spending. One way in which this could be done is applying for a debt consolidation loan. By doing so borrowers may find that they have more disposable income at the end of each month after merging debts owed to a number of creditors into a single low-rate repayment.

Earlier this month, Derek Oakley, insolvency director for Debt Free Direct, reported that consumers experiencing problems managing their money should approach such difficulties head-on. He advised that consumers create an assessment of their expenditure to help them in identifying in which areas they can reduce their spending. However, should they find that they are unable to do this effectively, applying for a loan for the purposes of debt consolidation could well be a means of getting back into the black.

Steve Smith writes for the 1 Stop Finance Shop where you can apply online for debt consolidation loans. We specialise in all sorts of personal loans and secured loans with online application. Visit Today: http://news.1stopfinanceshopuk.biz/
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