Consumers Focusing On Managing Loan Debts
The credit crunch and recent recession have been a severe wake up call for many individuals in the UK, causing them to rethink their financial situation and take a more cautious approach, with repaying debts on personal loans and credit cards becoming a top priority.
Although personal loan and credit card debt is still increasing, the rate of this has slowed dramatically. The latest figures which have been published by the Finance and Leasing Association (FLA), have revealed that the level of new spending through personal loans and credit and store cards, has fallen significantly over the course of the past twelve months to March this year.
According to the figures, the level of spending has fallen by a third on personal loans in twelve months and by around 20 per cent on store cards. Although credit card spending still remains fairly high, this too has fallen by around 3 per cent since last March.
But previous loans and other debts are still taking their toll on many individuals who are struggling to remain on top of their finances through these difficult economic times, with a growing number of borrowers falling behind on their personal loan and credit card repayments.
Although this is a worrying sign and shows very little sign of slowing in the immediate future, the positive news to be taken from this is that many individuals are no longer burying their heads in the sand and are actually seeking professional help to solve their problem.
The figures also showed that there were 35,682 individuals who entered into some kind of insolvency during the first three months of this year, an increase of 17.9 per cent on the same period twelve months ago. There has been a large increase in the number of borrowers seeking debt advice and help, with a definite focus on repaying their outstanding loans and other debts.
