Consumer Debt in the UK
Statistics show that so far during 2005, UK households are on average around £14,700 in debt each in just personal loans, store cards, and credit card debt.

So if you think you are alone then think again. However, this is a debt level of almost epic proportions! The interesting twist is that whilst many are aware of their predicament, not that many are worried about it just yet. Most believe that the value of their house nicely covers their debt. Others without a property feel that low interest rates make their level of debt not just bearable but justifiable. However, with the prospect of interest rate rises looming it could well be that this somewhat overlooked fact will start to become a real problem.

Historically debt problems usually balloon in exactly this environment. Relaxed credit and low interest rates induce massive borrowing, even over borrowing. As interest rates rise a squeeze occurs and repayments become more difficult. Since most loans are based on disposable income, and since this diminishes as interest rates rise, new loan offers start to disappear just as they are most needed. However at the current time the loan market is still very buoyant with lenders still in the mood for lending even with the backdrop of rising consumer UK debt. This may well be a shrinking window of opportunity and it would be prudent to move swiftly to secure new credit before lenders start to change their minds!

UK Debt Free Living.
For more on how credit applications are viewed by lenders and how to improve your credit file, the Complete UK Credit Repair Guide provides valuable information and for a limited period also includes a guide to debt-free living in the UK. For details about the guide please click here