Borrowers need ‘to use common sense’

Borrowers need to use their common sense when it comes to avoiding unmanageable debt problems, according to one expert.

Richard Brown, chief executive of moneynet.co.uk, has suggested that while student loans have become a fact of life for people studying at university, unsecured loans and credit card debts can be avoided.

And whereas student loans carry low levels of interest and can be paid off over a long period, the same is not true of other forms of borrowing so consumers need to keep their financial wits about them.

Mr Brown said: “Some people graduate with substantial student debt but it is a fact of life unfortunately, whereas carrying big wads of debt on a high interest credit card isn’t.”

According to Credit Action, the UK’s collective debt management burden was worth almost £1,436 billon at the end of April 2008 and the figure is increasing by £1 million every five minutes.

By giles Stevenson