'Tighter criteria' for debt management
'Tighter criteria' for debt management
- Friday, 8 May 2009Britons looking to
manage debt by arranging new lending could find their access to loans is still worsening.
The news comes despite the credit crunch - which is named for the reduced access to lending that consumers have faced - reaching its 21-month anniversary on May 9th.
Financial information service Moneyfacts notes that lending criteria continue to tighten, while average interest rates rise, causing a double negative effect for Britons' debt management efforts.
Headline rates may not reflect the higher costs faced by less desirable borrowers, the organisation points out.
Analyst Michelle Slade says: "The actual increase a customer has to pay today compared to a few years ago could be much higher.
"Tighter lending criteria is likely to mean only those with a perfect credit history will be getting the best rates."
As a result, the typical interest accrued on a three-year £5,000 loan has risen from £664 to £957, potentially putting consumers' ability to
manage debt at risk.

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