Savvy debtors shop around

According to John Borgars of Equity Development, many firms set up to help people clear debt charge fees which can add to their problems.

He praised ClearDebt for its affordability, in contrast to firms such as Loanmakers, which collects a ten per cent commission from lenders on the value of each loan it sources for them.

“I shudder to think what sort of margin the lenders expect,” wrote Mr Borgars. “When people are desperate, they will pay almost any rate of interest, which is why we used to have laws against usury.”

His report comes as more people are prompted to take debt advice after spiralling debt levels affect the country.

Mr Borgars warned people to look at charges or recommendations that some debt management or advice centres give to ensure that they do not pay too much to get themselves out of debt.

Click here for further information on the Equity Development report.