Can Anyone Get a Loan in the Credit Crunch?

If you are looking for ways to control your debts, you may find it difficult to get hold of a debt consolidation loan at the moment. The credit crunch and global recession have made it harder than ever to secure credit. This debt advice below highlights the areas most affected by the current climate and outlines a number of available debt solutions!

For FREE debt and IVA advice just call The Debt People on 0161 927 8001 today.

Which areas have been hit?

There are many parts of the UK that have been suffering with the recession, namely larger industrial areas in the Midlands, North West, South Wales and across Yorkshire. These regions were hit hard in previous recessions and from latest reports they look to be feeling it worse than most again.

A study by the Work Foundation Consultancy found that unemployment, as a percentage of the local population, was rising fastest in these areas. UHY Hacker Young’s separate report echoes these findings. According to their research, some of the poorest regions in the UK (based on their average income per resident) include Hull, Blackpool, Caerphilly and Blackburn. The average annual income of these areas was around £18,000 – some £6,500 lower than the UK average.

These areas were identified as being the most likely to have the highest number of people in need of a professional debt management company to handle their financial affairs.

For FREE debt and IVA advice just call The Debt People on 0161 927 8001 today.

How to combat debt problems

Too many people who are struggling with their finances will naturally think the best option to resolve their situation is by taking out a loan. For some reason we have been brought up to believe that it’s better to go further into debt to get out of debt!

These days, with credit harder to come by, alternative solutions have increased in popularity - as people have realised that they will always be in debt by continual borrowing. Many of the ways to get out of debt that are available today do not require a loan or further borrowing.

Debt management plans, IVAs and other debt solutions have been around for many years, but have recently received increased coverage in the press as people look to relieve their financial worries. These work by simplifying finances and restructuring repayments to make them more affordable to repay. The amount repaid each month is based on what is manageable for you, so you will only pay what you can realistically afford to maintain your arrangement.

With an IVA, all remaining unsecured balances (personal loans, overdrafts, store cards and credit card debts) are written off after the term – which is usually after 5 years. The IVA requires a qualified Insolvency Practitioner to provide preliminary IVA advice and draft a legally binding agreement between you and your creditors. This helps in two ways. Firstly, it protects you from creditors changing their minds and increasing their payment demands. Secondly, it ensures that an agreed amount is regularly repaid to all creditors on a pro-rata basis.

For FREE debt and IVA advice just call The Debt People on 0161 927 8001 today.

As professionals, they understand how to resolve any financial issues and many offer free debt and IVA advice - so there's no committment. Debt help organisations will also be able to provide a way to help you get out of debt.

As part of their service they will speak to your creditors on your behalf and negotiate to restructure your monthly repayments to a more comfortable level. Another benefit of using a professional company is that they will deal with all of the demand letters and calls that creditors make – so you don’t have to worry about speaking to them yourself. This means that the calls and letters to you will stop.

Debt management is more flexible, as it doesn’t involve the services of an Insolvency Practitioner and can be revised at any time to suit your current financial situation. That’s why debt management plans are becoming so popular, as they can be used as and when required. A debt management plan enables you to continue making payments to all of your unsecured creditors, even if you were made redundant or your household income dropped to a level where you couldn’t keep up with your current commitments. There would also be an allowance accounted for so that you could maintain payment towards your priority payments (mortgage, council tax, utility bills, food etc.).

No matter how much you owe, if you are having difficulty with your finances it is worth seeking impartial debt advice sooner rather than later – before the problem gets worse.