Latest Debt News
More spenders forced to use expensive lenders
15/04/2008 09:39:00
The tightening up of lending criteria combined with the credit crunch could lead to more expensive lenders receiving more business, one financial expert has claimed.
According to Equifax, if the banks begin to reject potential borrowers, then consumers may just stop taking money out due to the costly state of lending in the wake of the credit crunch.
However, Neil Munroe, external affairs director for Equifax, said that if consumers really need the money, then "they may be forced into more high cost borrowing, so forced down into the sub-prime or near-prime market, whereas before they might not have considered going there".
This issue of rejection has forced people to pay more, "but that's probably been happening for the last few months around the margins", he continued.
The latest figures from Credit Action Average show that household debt in the UK increased to £9,100 (excluding mortgages).
This figure increases to £21,166 if the average is based on the number of households who actually have some form of unsecured loan.
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