Borrowers ‘Unrealistic’ About Paying Back Loans
Keywords: debts, out, of, control, loans, credit, cards
The majority of British borrowers have unrealistic expectations as to how long it will take them to complete making repayments on their debts, a new study suggests.
In research carried out by the Motley Fool, the average consumer expects to have cleared their debts in three years’ time. However, the financial services firm claims that in reality credit cards and personal loans will not be paid off an average for seven years and seven months. The findings also showed that the typical borrower has non-mortgage debts of around 11,000 pounds.
With the average Briton putting about an eighth (13 per cent) of their salary towards debt repayments, many could be set to see pressure on their repayments last longer than expected. According to calculations by the company, which uses an example of interest charged at 14 per cent, two-thirds of all borrowers are reported to take 91 months to get out of the red - more than twice the amount of time they had expected to do so. Overall, for every 100 pounds borrowed they are set to pay back 167 pounds.
Findings also showed that older people could be in deeper financial difficulties, as two-fifths of people in their 40s currently owe more than 20,000 pounds. Meanwhile, a tenth of Britons over the age of 58 are in so much debt that they are unable to pay it back. Just under a fifth (19 per cent) of those owing over 20,000 pounds are not able to afford to make any repayments.
David Kuo, head of personal finance for the Motley Fool, said: “It is worrying to learn that two out of three people have taken on debts without fully understanding what is involved or how long it will take to repay the loan. For many, borrowing money is as easy as walking through a doorway. But it’s a good idea to ensure that you have a way out before the door slams shut”.
“Of course, people don’t get thrown in prison for not paying their debts any more. It’s much worse than that. Loans can now be drawn out indefinitely, which means that you are shackled to your lender forever rather than being incarcerated for a while.”
As a result, those looking to avoid developing further debt problems were recommended to “budget carefully to identify where savings can be made”, with selling unwanted items to raise extra funds also mooted. In addition, the Motley Fool advised making payments above the minimum monthly amount and clearing debts with the highest amount of interest first. Taking on a second job to supplement incomes was also another way consumers were told can help them pay off money owed more quickly.
Earlier this year, Stephen Rose, director of the Debt Advice Bureau, claimed that taking out debt consolidation loans could well be the best way for consumers to rein in their spending. He stated that by transferring money owed to various creditors into one monthly amount, they may be able to free up more cash to put towards credit payments. “Refinancing [debts] to lower the interest burden may be a solution,” Mr Rose purported, adding that creating a budget may be another way to relieve financial pressures.
Tom Dawson writes for Essentially Home Loans. Our visitors can apply for secured home loans online, for whatever reason with whatever credit history. Visit us today for the best rate loans available. www.essentiallyhomeloans.co.uk
Previous Articles Highlighter:
Homeowner's Insurance: How To Save Some Cash (1)
Their quotes will run the gamut, although each lay their basic criteria on the value/age of your home, previous claim history, and crime statistics in your area. It is common knowledge that rates for homeowners insurance don't vary drastically as ratings are based on the same factors.
Trading Commodities - Reading Prices (2)
Most futures contracts trade similarly to stocks or bonds. The exception is that they have an expiration date, unlike stocks or bonds. Even so, this type of trading can still confuse someone who's not familiar with this world.
Commoditiy Trading - Financial Indexes (3)
It is the largest of all contracts traded in the financial futures market today. One of the most popular of these is the contract for the Standard & Poor's 500 Index, or the S&P 500.
Trading Commodities - Margins (4)
This is done per individual commodities futures contract. The exchanges monitor volatility, price and many other factors to figure out what acceptable levels of risk are. Then, they said the margins accordingly.
Myths About Real Estate Agents (5)
Myth #1: They have big hair. Fact: Though occasionally real estate agents do have big hair, most are regular people who get up in the morning just like you do, and go to work just like you do.
The Benefits Of Buying Real Estate In A Bad Neighborhood (6)
Good neighborhoods can get bad and bad neighborhoods can get better. Since the price usually reflects the current condition, buying in a neighborhood that has room for improvement might be a good idea.
Auto Loan Tips To Keep In Mind When You Buy Your Next Automobile (7)
Do you want to have a sixty month, or longer loan, or do you you want to pay it off now. If you do financing for sixty months, or longer, you will pay more in interest to the lender.
Business Insurance Tips To Make You Feel More Comfortable (8)
There are many brokers, or agents, around that offer insurance for your type of business. Many even represent the same company yet pricing is completely different. Know what you getting and if you are comparing apples to apples.
Bad Credit? You Can Still Get A Loan (9)
Keywords: cash out refinancing, no cost refinance, steps to refinance, cost to refinance, fannie mae Don't let your poor credit get you down - you can still get a loan. With a mortgage loan, college loan or even a personal loan, many mortgage lenders turn bad credit down.
Asheville NC Rental Houses Abound (10)
today, and it has been for the past century. The area has some of the most amazing natural views imaginable, some wonderful historic sights, as well as a thriving tourist and small business industry.
Asheville NC Lakeview Real Estate Can Be An Excellent Investment (11)
Keywords: asheville rental house, preferred real estate, preferred real estate center, real estate, real estate s On any given day you can find some amazing deals on Asheville, NC lakeview real estate for sale.
Dental Insurance - Costs Far Less Than The Consequences (12)
This is an excellent option for people earning a low wage. Dental Insurance Comparisons Sites Slim Down The Bill If seeking private dental insurance, the best place too look is an insurance comparison site on the internet.
Car Loans 'Could Save Britons A Bundle On A New Car' (13)
Neil Chandler, head of personal loans at the financial services provider, said: "It makes sense to take your time and choose the right used car, but buyers should also ensure they do the same when it comes to financing it.
Overspending 'Could Lead To A Bad Credit Rating' (14)
Meanwhile, the average consumer was reported to be spending 5,874 pounds beyond their means every year. Findings also revealed that 37 per cent of Britons overspend for fear of not fitting in with those around them, as 48 per cent of respondents feel pressured into splashing out more money on presents for loved ones than they had originally intended.
Britons 'Do Not Know Personal Debt Figure' (15)
While just fewer than half (48 per cent) would turn to savings to repay debts should they face financial hardship, among the remaining people were listed what the company has referred to as "worrying" techniques for paying back the money they have borrowed.
Garden Improvements Add Privacy And Value (16)
While a cheap loan could be a good way to fund any large developments to a garden, any money borrowed should not just be focused on the back of the house.
Home Insurance: Do You Really Need It (17)
Whatever you decide to do, make sure that your home is adequately insured against any man-made or natural disasters that may affect you now or in the future. It will definitely save you a lot of stress, money and family troubles when the time comes.
Millions Of People 'Should Look To Debt Consolidation Loans' (18)
Today's report is the first outing of the MoneyExpert debt index, which is intended to measure how well UK consumers deal with their debt situations.While seven per cent are worried about their ability to deal with their debts, the new measure suggests, a similar number have increased the amount they owe by a fifth (20 per cent) or more.
Credit Card Tips To Save You Money, Time And Worry (19)
It is always best to go through the Terms and Conditions governing the deal or promotion and the underlying disclaimers. They may contain more snakes than you may anticipate.
Consumers Warned Over 'Holiday Debt' (20)
"If you really can't afford to go on holiday you have to accept that and not go on holiday - or look around for ways of making it a very cheap holiday.
Newer Articles Highlighter:
'Worrying' Number Of Young Brits In Debt (1)
However, it was reported that consumers are generally ignoring any financial difficulties until it becomes impossible for them to do so. "People only tend to become wise to debt when the debt catches up with them," she commented.
Britons 'Would Rather Consult A Hairdresser' On Money Woes (2)
The survey conducted by the organisation stated that those consumers aged between 18 and 25 are the group most likely to be concerned about their financial situation, with more than a third suggesting that they have experienced concern about the issue - more than twice the national average.
Homeowners Insurance Guide (3)
This includes injury caused by household pets. Homeowners insurance covers damage caused by most disasters except floods, earthquakes, and the lack of maintenance. Individuals are required to buy separate policies to cover the losses incurred due to earthquakes and floods.
Interested In A Home In Malibu? (4)
The difference between a business building and a residential building is that it will change the approach towards regulations. Most likely, there will be zoning rules and the lease will have different divisions for things such as taxes and insurance.
Choosing The Right Insurance For Your New Malibu Home (5)
Not only do you want to make sure that you have the right investments set in place, but you also want to make sure that you have the right things to protect you, and your Malibu home in case something unforeseen happens.
How To Sell And Rent Back Your Home (6)
Create a comparison, and add up all the figures to see which company will give you the most money and take the least. Need to sell rent back? Visit www.looking4quickhousesale.co.uk
The Right Penny Stock Can Make You Money (7)
Try to set aside some money for investing in penny stocks and start while you are still young. The earlier you get started, the more money you can make in the long run.
How To Sell Your Home If You Are Faced With A Foreclosure (8)
Keywords: sell home fast If you're facing a bank foreclosure or repossession of your house, then you may be desperate to sell it. Usually this means just one thing: You'll have to settle for less money in exchange for a faster turnover.
Finding The Right Student Loan (9)
These are commonly known as Direct Stafford Loans. The schools offering student loans this way are called Direct Stafford Schools. Some schools offer Stafford Loans through banks or other lenders.
Foreclosure Epidemic Likely Means Additional Tax Liability (10)
Joe may not even know of his additional tax liability until he receives an envelope in the mail from the lender containing a 1099 form reporting the debt relief income to the IRS.
Student Loan Consolidation Rates - It Pays To Shop Around (11)
There are so many variables when it comes to consolidation rates that it is easy for people to get confused and frustrated. There are lots of options available out there.
Student Loan Consolidation Information - What Are Co-Signer And No Co-Signer Loans (12)
Keywords: Student Loan Consolidation Info, Student Consolidation Loan Information, Student Loan Consolidation At the time of researching your student loan consolidation information alternatives you want to investigate co-signer and no co-signer loans.
Choosing Your Malibu, CA Real Estate Appraiser (13)
Keep in mind that this does not mean the recommendation is the best; it is just someone who your agent works with. To ensure that you get the right appraisal on your home you will need to find yourself an appraiser who is capable of completing the job.
Student Loan Consolidation Information - How Credit History Affects Student Loans (14)
In addition to the FICO number and linked to it, there are a number of other components that prospective borrowers should keep in mind. Paying when required is imperative, evidence of a history of late payments and building up late re-payment charges is evidence of a poor credit risk in the minds of the lenders, staying within your available credit limits is very important as well, avoiding over limit and other costs shows a disposition to defer current gratification and take responsibility, creditors are judging not just numbers but also character as well in any decision.
10 Reasons Why People Don't Want To Be Rich (15)
Here are my ten reasons why I think people are not interested in being rich. 1. They are contented. This is probably the best reason to not want to be rich.
Enlightening Students About Credit (16)
If you thought that credit cards were the privilege of only working people, think again. Credit card companies are starting young these days. Who are they targeting? High school and college students, of course.
Insurance For The Four Legged Folks (17)
Car insurance cannot be avoided anymore, what with all the accidents that keep taking place. But then, these are only some of the more prevalent kinds of insurance. These days, insurance providers are coming up with a wide range of insurance policies for many newer things.
Getting Your House Ready For The Appraiser (18)
If you like, you could go in for some home improvements before the appraisal becomes due. A paint job might be a good idea, as might getting a new table made.
Borrowing For A Business Venture (19)
Yet another way of providing for your business during the early years is by securing a business credit card. If you find a credit card that's cheap, you could end up saving on a lot of money.
Secrets To Avoid A Home Foreclosure (20)
Tight situations can sneak up on anyone. The key is to prepare before hand. Have an emergency fund on hand to deal with just such occurrences. Paying yourself first is almost always possible to do.
Permalink to Borrowers ‘Unrealistic’ About Paying Back Loans