Consumers 'should not try to borrow out of debt'
Published On 9 July 2007
Consumers should not plan on borrowing their way out of debt with things like additional homeowner loans, a financial expert has warned.A spokesperson for Citizens Advice said that it is vital that people in debt should not simply borrow more to relieve current financial troubles.
"Spend time shopping around to see what's on offer; always look at the total amount you have to repay; make sure you know the difference between a secured and unsecured lending; and don't borrow more money to pay off existing debt," she advised.
"If you are beginning to have difficulties, let the lender know straight away. Don't just borrow your way out of debt because it will get worse.
Other things that people in debt should never do include missing payments and ignoring letters from lenders, she added.
A recent PricewaterhouseCoopers study suggested that repaying money borrowed and its interest now takes up 19 per cent of the average UK household's disposable income.
Previously, the domestic debt burden peaked at 18 per cent of household income in 1990.
