Personal loans should be used sensibly, analyst warns

Fri, 29 Jun 2007

Personal loans and credit cards should be both lent and used in a responsible manner, one industry figure has warned.

Although the rush for credit cards and personal loans seems to be subsiding somewhat, many Britons still look to borrow as a "leveller for society", said Helen Saxon, a spokesperson for the Finance and Leasing Association.

Credit card companies and personal loan providers must therefore work with consumers to ensure that they do not find themselves steeped in unmanageable levels of debt because of irresponsible lending, she asserted.

"Banks are looking at credit reference agencies, repayment agencies and doing everything they can to ensure that they get their money back – and that the consumer can afford it," she remarked.

Ms Saxon also noted that the aforementioned abatement in consumer demand for products such as personal loans and credit cards may be in part due to the fact that more are paying higher contributions towards their mortgages.

Many consumers with credit cards, personal loans and mortgages have been adversely affected by recent hikes in the Bank of England base rate.


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