Friday, September 1, 2006
Category:
Consolidation
Recent reports show that the number of young people becoming addicted to credit continues to grow.
The younger generation are taking on more and more debt than they could ever realistically afford to pay back. In recent years, low interest rates and the strong housing market have encouraged consumers to build up debts in excess of £1 trillion. Responsible lenders are addressing this issue with personal secured loans which allow consumers to consolidate their debt into manageable monthly instalments. As payment is stretched over 5 to 25 years, the amount paid each month is realistic and borrowers have a higher amount of disposable income available to them.
In this way, a personal secured loan can lessen the likelihood of the vicious circle of continued credit card spending, where individuals spend the amount that they pay off each month, thus never reducing the debt. If consumers do opt to use a personal secured loan to pay off credit card debt, it is important that card accounts are closed as soon as the balance is cleared. This removes the temptation to continue spending and allows the personal secured loan to really work in order to tighten up finances.
It is important for borrowers to remember that a personal secured loan is a debt which is secured on their property. This means that homes may be repossessed if repayments on a mortgage or any other secured debt are not kept up.
