Expensive loans see thousands miss payments
As the cost of borrowing increases, hundreds of thousands of Britons are missing personal loan payments.
New figures from MoneyExpert.com show some 230,000 UK residents are missing payments every month, but this might not need to be the case.
More than 7,716 loan repayments are skipped every day seeing 1,389,000 repayments missed in the last six months alone.
"This is yet another warning of real financial distress and a sign that finances are being stretched to the limit by recent interest rate rises," said Sean Gardner, chief executive of MoneyExpert.
In the last year the Bank of England has increased the cost of borrowing four times - making loans 22 per cent more expensive.
And rates are set to rise higher still this summer, putting more pressure on those in debt.
But there is still room for people to find a cheap personal loan and lower their monthly repayments. While some personal loan companies are charging nine per cent interest, and the highest rate on offer is 28 per cent, someone shopping around for a cheap personal loan can pick one up for about 6.5 per cent.
"The concern has to be that people are missing repayments on unsecured loans because they believe there's not as much at stake as missing a mortgage repayment," Mr Gardner said.
"Missing repayments is not a way to manage your finances. People doing that are risking damage to their credit rating and, potentially, court action. Burying your head in the sand is not the way to deal with financial problems."
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