Consumers wary of borrowing money
Consumers wary of borrowing money
- Tuesday, 27 April 2010Consumers are still cautious about taking out new loans with many still wary about the potential
debt problems that could follow.
Although the recession has now officially ended, it seems that the record
debt problems that accompanied it have left consumers reluctant to take out new credit, figures from the Finance & Leasing Association (FLA) show.
According to the FLA, £3.7 billion in total was lent by its members during February 2010, five per cent lower than in the same month last year and 30 per cent lower than in February 2008.
Fiona Hoyle, head of consumer finance at the FLA warned that rate caps being proposed by the political parties could actually make lending even more precarious for borrowers.
"Caps on interest rates are popular with the political parties, but they are not always good for consumers," she explained.
"If the limit is set too high, consumers end up paying more, and if the limit is set too low, lenders will be forced to exit the market leaving some customers financially excluded or prey to loan sharks."
Last week, a report released by the Office for National Statistics indicated that inflation stood at 3.4 per cent in March.
The rising cost of living could leave more people requiring
debt help.

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