Latest Debt News
Use of overdrafts on the rise
16/07/2008 13:50:00
People are depending on their overdrafts to see them through the current economic crisis as rates reach a record high, it has been reported.
According to figures from the Bank of England (BoE), the average overdraft interest rate climbed to 17.9 per cent in June, says the Telegraph, despite the monetary policy committee voting to hold the base rate at five per cent.
However, the level of personal loan and overdraft debt rose from £161 billion to £177 billion over the last year, the source says.
Tim Moss of price comparison website Moneysupermarket.com told the publication: "The number of personal loans has fallen dramatically due to the tougher lending criteria from the banks, so to still see such a rise in personal debt implies that people are using their overdrafts as a way to cope with everyday living costs."
In related news, First Plus just became the latest lender to stop new applications for secured loans, effective from August this year.
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