Debt solutions news: personal lending on the increase

05/01/2010

Increasing numbers of people seeking debt solutions are borrowing money to alleviate their personal income worries.

This is the suggestion of new figures from the Bank of England, which revealed that total net lending to individuals increased by £1.1 billion in November compared to the same month last year.

Secured lending by banks rose by £4.3 billion, which was higher than October's increase of £3.3 billion and the previous six-month average of GBP2.8 billion.

In what is good news for property seekers receiving debt advice, the bank also revealed that the number of loan approvals for house purchase - 60,518 - was higher than the previous month's total of 57,718.

It also appears that people are maintaining their credit card lifestyle, with credit card lending having increased by £0.2 billion.

Recent findings from Abbey revealed that 4.5 million Brits are planning to switch their credit card balances during the beginning of 2010, with the average amount to be transferred standing at £1,140.

Kevin Still, director of EuroDebt, commented: "These statistics need to be read in conjunction with the record levels of loan repayments being made by consumers. It would appear many are using disposable income to clear down unsecured debts.

"However, it would seem that many creditworthy people are now having to borrow more or are using promotional rates on credit cards to hopefully switch balances. Lenders appear to have more funds to advance to the clients with the right credit history.

"There remains a danger that more 'Middle England' consumers will get into financial difficulty as the recession persists and subsequently require debt advice, but with very high levels of unsecured debt. It is now very common for EuroDebt to see clients with over £50,000 of unsecured debt starting a Debt Management Plan [DMP] or an IVA."

Tags; Debt Management and Banking,

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