Applying for loans to ease debt issues during the current financial crisis is a “risky strategy” according to the Consumer Credit Counselling Service (CCCS).
Tom Howard, spokesperson for the body, stated that loans should not be relied upon as there is no guarantee lenders will accept applications and people looking for a debt management strategy should only consider a loan if they are certain they can keep up with repayments.
However, Mr Howard also remarked that many people are responding to the credit crunch in the right way so as to avoid getting into debt.
“[They are] being thrifty, recognising overspending and cutting back on any past excesses and unnecessary luxuries,” he noted, adding that the CCCS advises consumers to “live within your means whenever possible”.
Recent research carried out by YouGov on behalf of MoneyExpert.com revealed lenders have rejected almost five million applications for new credit cards or personal loans over the past six months.
By Tom Musk