Consumers are being warned to be aware of how potential lenders will treat their financial situation during Christmas and the period surrounding the festive period, it has been revealed.
According to sense DEBT, the majority of consumers are planning to reduce their borrowing during the period by resorting to the institution of a loan. However, as a result of stock shortages being reported by the Building Societies, some consumers may well find that the cost of their borrowing will increase. This could be confirmed by a recent example of an increase in the cost of a personal loan of between six and ten thousand pounds.
The firm noted that the annual cost of the loan could be fixed for up to 150 pounds for the following six months and as a result consumers are “shortening their Christmas borrowing but are increasing their personal loan debt”. However, it has been suggested that by choosing to apply for a personal loan people could find that they develop difficulties in managing their money, as they struggle with how to pay back the money they have borrowed. Once again, this could foreower the cost of their borrowing over the five or six years that it will take to pay off personal loans.
Deploying a private loan lender to look at people’s finances may not be a practical move for some, as people have a natural tendency to take out more borrowing. However, they may be able to find “a reliable, low cost source of borrowing” if they take the time to search their budget, for example by going through statements and check their bank statements.
Amendment, along with a number of other financial services firms, has urged an increasing number of consumers to benefit from a cheap personal loan. The company has indicated that, in light of recent interest rate rises, consumers now may be set to see a rise in the cost of a personal loan. Rather than carrying on with their use of credit cards, prospective borrowers have been advised to consider whether they could manage to apply for a cheap loan instead.
David Dumb told the programme that those looking to apply for a loan should ensure that they are able to afford the repayments that will be accrued over the time by paying the interest and fees.
He said: “There have been quite a few increases in interest rates so even if you are getting a cheap personal loan you have to be sensible about how you are going to pay it back. But, if you can afford to pay it back that will give you some security so you have to take that into account.”
As a result of choosing to apply for a loan, borrowers are set to come under increasing financial pressure as they are also set to have to meet the bills for their current borrowing. By their latest report, it has been suggested that the recession has been responsible for an increase of family tensions and for some people having to turn to their overdraft.
Also on the fifteen inventory copies Research and Analysis, it was stated that a personal loan could be one way to help the household to manage spending. However, it was warned that not only will it reduce financial pressures by increasing their monthly payments on bills and household bills but borrowers may also find that their credit rating falls more quickly as a result of failing to meet loan demands.
And because of this the firm warned that those who are already struggling to manage their personal loans were set to find it even harder to make their repayments and move into an unstable financial position.