For a UK resident taking a loan is as mundane a thing as say taking a bath! Almost everyone is repaying monthly instalments of some home-loan or a car loan or any personal loan. But recent studies have thrown up some worrying stats. By the end of 2006 almost 100, 000 UK residents are expected to file personal bankruptcies!
According to government data, till September 2006 the Insolvency Service had reported 77,441 defaults. Also the UK consumer debt average in 2005 was more than £3,500 per person more than the cumulative total for the creditor in France, Italy and Germany. This number is surpassed only by the hub of Consumerism, USA, and we beat even them when it comes to overall debt as a percentage of GDP! Now someone has to draw a line somewhere.
Also the phenomenon of online banking has made the whole process of taking loans much easier! Taking Online Personal Loans was never so easy, as the whole process is so streamlined and easy and the lower interest rates make it all the more tempting. Unlike their high street competitors the running costs of any online business is much lower hence the online loans providers often offer lower and alluring interest rates.
These rates are responsible for luring the customers into taking loans, generally personal loans, as no one puts their property in the line easily, which gradually snowball into such a huge debt that it becomes virtually impossible for them to pay it back. Now another twist to the whole process is the misuse of IVA, Individual Voluntary Arrangements, which allow the consumers to escape the ignominy of filling for bankruptcy.
The worrying fact is few irresponsible Debt firms are pushing people into taking up more than they can manage and generally it is taken up as personal loan. That is why this country has more Credit cards than the cumulative population, with national credit card debt running at more than 50 billion pounds as on September 30! It’s high time we understand what our responsibilities are and fill up the tumbler only that much as it can hold.
