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Credit crunch "pushing consumers into high-interest loans"
20 June 2008
Over a quarter of British consumers are willing to take out high-interest sub-prime loans to stay on top of their current financial commitments, according to ITV news (June 19th).
The figures, from a survey carried out by credit reference agency Equifax, indicated 32 per cent of people are willing to postpone credit card repayments to pay for mortgages and other "essentials".
It was also found that 32 per cent of those questioned have taken out doorstep loans and 31 per cent have acquired payday loans.
Borrowers may pay the equivalent of 2.6 million APR, the survey discovered.
Equifax external affairs director Neil Munroe said the research indicated people "are well aware of the risk of bad debt" but should make paying off their most expensive debts a priority.
Lenders are not passing the Bank of England`s five per cent interest rate on to borrowers and this, combined with climbing household bills, is causing financial concerns, he said.
"We urge people to talk to their lender if they are struggling with repayments in order to avoid trouble further down the line. Being as well informed as possible is also crucial," Mr Munroe added.
Today it was reported by Combined Insurance that the cost of living has risen by 26 per cent in two years.
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