The Money Stop

People facing serious financial difficulties should not try to “hide the problems” or assume that they can solve them themselves by using their credit cards even more, says an expert.

A recent report has found that 400,000 people took out new solutions for unsecured debt in 2007, with over half (58 per cent) deciding to refinance or remortgage.

David Kuo, head of personal finance at Fool.co.uk, has advised people to ask their lenders for help to try to solve the initial problem of having borrowed too much money, which they cannot repay in the time period stipulated by the lender.

A possible solution is to extend the length of a mortgage which will lower monthly repayments making it more affordable in the short-term and giving the borrower “breathing space,” although the total amount to be repaid will be higher.

However Mr Kuo advises against taking out secured and unsecured loans, since they may compound the problem.

“Sometimes people are a little misguided about how they solve their problems and they try and throw money at them,” Mr Kuo concluded.

As debt problems increase for many people and lenders tighten their criteria, a survey has found that 18,000 applications for credit cards are being rejected each day, according to MoneyExpert.com.

Related Posts

Brits hide billions in the home

Millions of Brits are storing billions of pounds in their homes and missing out on the benefits of banking.That is according to Virgin Money, which says we have a combined £3.5 billion worth of cash

Brits hiding their cash around the house

A recent report has revealed that an alarming number of Brits like to hide money around their homes in order to have ready cash when they need it rather than having to go to a

Citizens Advice urges caution with consolidation loans

With record numbers of consumers struggling to pay off unsecured loans, a consolidation loan can sometimes be seen as a reasonable way out, but Citizens Advice has warned debtors to consider all options before signing

Homeowners prepare to ‘hide’ bedroom

Now that the advent of home information packs (Hips) has become a reality, many homeowners in Britain are preparing to exploit a loophole in the scheme.Because Hips only applies to houses with three bedrooms or

Parents ‘running risks’ when insuring cars

Parents are risking getting in trouble with the law by insuring their offspring in their name in order to save money.Research carried out by Gocompare found that more than 66 per cent of parents would

“Incredibly important” for debtors to be aware of solutions

It's "incredibly important" that those seeking debt help are made aware of all solutions available to them, says a debt advice service. Debt Help UK said that being aware of all the solutions that

Bankruptcy is a solution to debt

Despite the "stigma" attached to it, declaring yourself bankrupt is a "financial solution" to debt, according to financial experts. The Consumer Credit Counselling Service (CCCS) said that most debtors are expected to opt for bankruptcy

Government takes steps to help homeowners

The government has recently taken steps to try and help homeowners by changing court protocols in order to make it more difficult for lenders to take court action without taking other steps first in cases