Equity Release Loans Being Used To Repay Debt
Equity release loans and lifetime mortgages are becoming more and more popular amongst retired individuals and those approaching retirement in the UK, particularly since interest rates on savings and returns on investments have dropped so significantly in years.
For retired people with value locked up in their home, an equity release loan can be a particularly good way of raising some cash, or additional income to help supplement their retirement income, or pay for the luxuries in life, such as holidays or a new car.
But recently, a growing number of individuals are using equity release loans in order to repay their outstanding loans and other debts, whether this is on a home owner loan, outstanding personal loans or credit cards.
The latest figures from the debt charity the Consumer Credit Counselling Service (CCCS) have shown that the typical client who used their equity release loan service, used the money released to repay an average of £29,983 on personal unsecured loans, credit cards and other debts.
The CCCS have noticed that they have received enquiries from a growing number of clients who are considering using equity release loans for this purpose over the course of the past twelve months and it seems likely that this trend will continue for some time to come yet.
It would appear that although loan debt used to generally be a problem for younger generations, it is also now working through to those approaching, or in, retirement, at a time when their loans and other debts should have been cleared and they are concentrating on building their retirement savings.
The CCCS noted that the average client over the age of 55 who approaches them for help, typically owes around £29,772 in unsecured debts, such as personal loans and credit card balances.
