Personal debt in the UK is on the rise again. Whilst most will manage their loans, credit cards and other credit without any problems, every single day 209 people are declared bankrupt or insolvent, 2330 CCJs are issued and 25 properties are repossessed.
The average UK household now has unsecured debts amounting to 26.5% of their annual income (and that’s ignoring mortgage debt). On average, that’s £11,800 unsecured debt for every UK household and many will owe much more!
Whilst today’s low-interest rates and the current stable employment market mean that even these high levels of debt are affordable, it wouldn’t take much for the finances of many families to be underwater.
If offering your clients debt consolidation isn’t yet on your radar, now is a good time to start thinking about it. Forward planning can help your clients prevent problems in the future – as well as saving them money each month.
Despite low growth in UK salaries, house price growth remains much stronger. With interest rates at a historic low, home owners with multiple debts could significantly reduce their monthly outgoings, ease the burden of the debt and even reduce the total interest charged by using the equity available in their home to repay credit with a second mortgage.
With loans available over terms of up to 35 years, a second mortgage for debt consolidation can make debt repayments far more manageable. And, unlike borrowing on credit cards, clients will see their debt reducing month on month!
What’s more, as the majority of second mortgages do not carry ERCs, even for fixed rates, and allow borrowers to make regular, or lump sum overpayments, they can provide your clients with total flexibility over the amount they pay each month and to reduce debt more quickly where possible.
Ultimately, this solution can significantly reduce the risk of your clients slipping into a financial sink hole, avoiding the prospect of missed payments, CCJs, and even repossession and bankruptcy!
Our experts are on hand to help you source debt consolidation finance in the form of a second mortgage from as little as 4%. We have the industry’s best experts available across a regional structure that puts you and your needs at the heart of our business. Contact us at introducers@loan.co.uk to organise a second mortgage training session for your office and discover how you can prevent your clients from falling victim to poor debt management.
