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According to recent studies, the most indebted age group amongst UK consumers are in their thirty’s.

A leading UK bank reports that the lower end of the youth demographic (18-29) are less dependent on credit, but find it more difficult to attain a mortgage. It is claimed that people within there 30’s have above average borrowings (around 10k), and are most likely to default on payments.

This particular segment of UK borrowers commits more to repaying interest than any other part of our nations debtors, although it is widely accepted that the bulk of debt is focused towards setting up new homes.

Traditionally, the 30’s demographic is when people begin to settle down, focus on their careers and consider raising a family. The fact that many are most in debt during this period is commonplace and accurately reflects our nations heritage.

The number of people in the UK using the Internet to source personal loans has rocketed, and according to new studies, the trend is responsible for a record amount of rejections.

According to a credible financial resource site, around 1.4 million people have had loan applications rejected in the last 7 months. They claim that this level of declination could be harmful to peoples credit scores, reducing their overall chances of attaining finance further down the line. It is suggested that the volume of rejected applications is being fuelled by the availability of online loans, with over 30% of brokers offering this service.

Although the claim is statistically accurate, its content shouldn’t deter people from applying online. There are a few points you should consider: -

• Although the number of declinations has increased, it is important to realise that the number of people actually applying for loans online has also increased, (in fact it’s fast becoming the most popular way to apply). Therefore, as dictated by the law of averages if more people are submitting applications using this method, then the amount of people declined via this method will also increase, albeit proportionately.

• It is estimated that over 10 million people apply for loans online every year. According to the report around ¼ of those people will be rejected. Over 40% of the populous have debt issues and suffer from impaired credit, and by definition will find sourcing a loan difficult.

• Applying for loans online is no different from physically walking into a branch or making a phone call; the only exception being that it can be more convenient and also allows you to do a little more research before you apply.

If you’re considering applying for a loan, regardless as to how you intend to do it, it is important to have a slight understanding of your personal credit profile beforehand. If you have had credit in the past and have defaulted on payments or had county court judgements issued against you, the likelihood of being rejected for a loan is increased.

If you are considering applying online it may be worth checking that the site will not credit check you directly, if you would prefer not to be. Any loan site that credit checks you directly must clearly state its intention to do so. Many brokers are able to give you a decision in principle and will advise you if they can help, without a credit check. www.loan.co.uk offer a prime example of this service, and of course so do we.
 

Families could soon find themselves in need of serious debt help in the not to distant future, new research suggests.

According to newly attained data, the relationship between Increased consumer spending and families coping with impaired financial circumstances is growing at an alarming rate.

The cost of living including normal household expenditure has rose dramatically over the past 10 years. A tool devised by a leading statistics authority to calculate trends in economic factors, suggests the average family is starting to seriously feel the effects.

Household debt is a topical issue in the UK, many individuals as well as family’s are experiencing heavy burdens with their finances and the number of people entering into Individual Voluntary arrangements (IVA’s) is increasing as a result.

So what’s to blame? The general consensus points a finger squarely at the increase in the rate of inflation. Inflation is currently at its highest rate since 1992 rising almost 3% in March alone. As a result, the level of disposable income available to the average family is lessening, resulting in an overall increase in the cost of living.

In our current economic condition, the lower end of the demographic will be hit hardest in the not to distant future. Many debt help specialists are reporting record highs for serious debt solutions such as IVA’s and Trust deeds (Scotland) and it is expected demand for such solution’s is set to increase.

In light of this week’s news regarding the incarceration of a notorious loan shark, we have decided to provide a little bit of information on the subject and to advise our readers “why you should avoid them at all costs”.

What is a loan shark?

By definition, a loan shark is an individual or unregulated body that provides illegal unsecured loans to people in desperate situations, at extortionate rates of interest. Their operations rely on scare tactics, blackmail and all to common violence.

Who do they target?

Loan sharks target people who are unable to attain credit from the usual channels such as banks and other high street lenders. People in serious financial difficulty seek finance from loan sharks as a last alternative, only to make matters worse. Loan sharks operate illegally and as such do not conform to industry regulations and standards, which are devised to protect the consumer.

Legitimate, regulated lending bodies use analytical data to determine if a consumer is financially fit as a potential borrower. These practices are in place to safe guard the lender and more importantly to protect the consumer from further financial difficulties.

A loan shark cares little about your “financial fitness” and will ensure payments are met using any means necessary. In extreme cases putting loved ones and members of your family at risk also.

The alternative?

It is important to remember that many people suffer from the burden of serious debt, and there are a number of organisations more than willing to help. A good starting point would be your local Citizens Advice Bureau, their advice is free and given with your best interests at heart.

Under no circumstance should you ever consider a loan shark as a solution. Their business is fuelled by the desperation and misery of others and employing their services will put you in a far worse situation.

New studies suggest that home loan lenders rely heavily on demographics when deciding which mortgage product to offer.

The report indicates that lenders use demographical information to assess changing demands such as the recent affordability issues experienced by first time buyers.

Particular products are matched to certain consumers, in this example first time buyers are more likely to opt for fixed-rate loans as they offer repayment security. People who have experienced financial troubles will be offered plans bearing higher rates of interest to match their sub-prime status.

Strangely the report also suggests that few consumers are using the net as a way to research mortgages due to the scale of such a loan, although it is accepted that this is likely to change with more weight being placed on this particular medium.

Demographical matching is a tried and tested method for analysing many different market places. The financial service industry is ideally positioned to use this method, as a means to gage its industry’s climate and develop new products accordingly.