A record two million people have taken out loans interest rates, as high as 100% from Britain's largest door-to-door loans company. This is said to be the direct result of the major banks not wishing to deal with people who have a bad credit history.
One company alone reported profits for 2007 were up 11% to a record 115 million. Since last year's problems in America, with what they call sub-prime mortgage lenders. High street banks in the UK have been introducing much stricter rules about the type of people they are willing to give money to.
In frustration, many people with bad credit histories have moved on to lenders who work door-to-door giving out loans to people who banks consider to be a bad risk These companies offer people who are known as nonstandard. Loans with often outrageous rates of interest that will probably push people into even deeper debt. These people are not unusual, in fact, there are believed to be around 10 million people in the country who could not get loans from banks or acquire a credit card. These types of loans are mostly legitimate. Some certainly are not, and sometimes it can be hard to tell if you are dealing with a legal company or the fringes of organised crime.
Charities, who deal with people who have debt, said the situation is serious, especially as people may not know the character of the company they are dealing with and whether or not, they are legitimate or a criminal enterprise.
There are a couple of other options for people who find themselves on the outside, when it comes to dealing with high street banks. Many reputable institutions can offer debt consolidation loans that are tailored to suit individual's needs and are capable of paying off many small loans.
In addition, replacing them with one single manageable monthly payment. This type of loan is ideal for people who possibly have several credit cards and other debts that are eating into their monthly wage and leaving them little spare.
With a debt consolidation loan, you can make a single payment, which will be considerably less than you were paying on all your other loans. It can allow you not only to clear your existing debts, but also to have additional spare cash every month, to do with as you wish. A debt consolidation loan is what is known, secured loan. This means the finance company, takes charge on your property against the loan. There are also unsecured loans, where the finance company has no security. If you do not pay, these loans have the advantage of not risking your house, but do have a higher rate of interest than a secured loan.
The unsecured debt consolidation loans can be somewhat more difficult to obtain than a secured their conciliation loan. And will as mentioned, have a higher rate of interest. In addition, they will be over a shorter period of time than a secured loan but this also means that it would be paid off quicker clearing your debts faster. For most people, a secured debt conciliation loan is probably the best way to go. Giving them the maximum amount of money, they can borrow without stretching their monthly budget of the same time clearing those heavy debts on their shoulders.
Being in debt is not a pleasant situation, not being able to pay it back is considerably worse, causing all kinds of personal and relationship problems that are best avoided if possible. By simply paying off the company's that you owe money to and making it easier for you to live a comfortable life each month.
Joe Kenny writes for Glitec.org, offering loans UK, visit them today for cheap personal loans or more options from OnlyStop.com loans.