Irresponsible Lending

[student-debt]

Big debates about irresponsible lending are in the media at the moment. Some people are trying to blame the UKs great credit cards usage and horrific spending problem on the lenders.

The United Kingdom is responsible for 2/3 of the European Unions credit card debts. Recent studies show that close to 90 per cent of credit card companies fail to check the applicant’s income.

Banks in the UK are giving individuals with low income credit cards with up to £10 000 limit. One case showed that an individual with a yearly income of below 10,000 received a credit card with a 12,000limit. If this individual made minimum payments amounting to 1/3 of their salary, it would take 28 years until they were debt free, paying £8.600 in interest. This has left Britain with total unsecured loan amounts of £1.13.

Last July Lisa Taylor, 26, from Lancashire had accumulated a combined debt of £14,560; this sum included a student loan, borrowings from Barclay, Egg and Capital One. The demanding letters threatening legal action, phone calls and overall pressure of knowing she couldn’t afford to pay back her debt finally became too much. Lisa Taylor committed suicide in July 2005, leaving a letter to her father saying she had “serious debts that I will never pay off. I can’t bear it any longer”

According to Martin Hickman from the Independent 90% of credit card companies will not ask for proof of income when clients apply for a credit limit. A figure showed that before Christmas 100million credit card applications were sent out to clients without them being requested.

Are we taking the easy way out by blaming the lenders when we are the ones spending money which is not ours?![?]

www.student-debt.org


For more information on student debt please visit student-debt.org

[iva experts]

There are some really interesting points raised there.

I understand why some people blame the lenders for bombarding people with credit. However, I feel that I wouldn't want to live in a country where I was told how much I could or couldn't borrow or what I should or should not be using credit for. It is important to remember that the vast majority of people using credit do not find themselves in financial difficulty with debt problems. At the same time I appreciate how easy it is for people to fall into debt difficulty as life deals them an unfair blow, and it's of paramount importance that there are help and solutions available for these people and that they are afforded every assistance possible to help them.

I think in short Lenders should lend money responsibly but at the same time credit does now play an important part in society and should be available freely to those who choose to use it.


Hope this information is of use

Regards. IVA Experts

[Oliver]

I tend to agree with IVA experts. The lenders are an easy target for the press particularly as they are making big corporate profits each year.

It is true that lenders could always tighten up their lending criteria and take more care about who they lend to. For some, this would not be a bad thing. However, calls for government intervention smack to me of "Nanny State". I am of the opinion that individuals should be allowed to make their own choice about the money they do or do not borrow.

This view of course does rely on the underlying assumption that the majority of people can be trusted not to over extend themselves. Given the current volumes of debt owed by UK residents today, I admit this assumption is questionable. Certainly more education about family finances and budgeting is required. The question is of course when and where is this appropriate?

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Best Regards
James Falla
www.thomascharles.com

[lee_m]

if student was on benefits when applying saying working when not and stating grossly false incomes should loan company approve the issue of the cards or loan without checks? and if they do are they still right? knowing the information is false! as desperate people do and say desprate things and when depressed or stressed or simply skint, they try anyway to obtain money to live!

Big debates about irresponsible lending are in the media at the moment. Some people are trying to blame the UKs great credit cards usage and horrific spending problem on the lenders.

The United Kingdom is responsible for 2/3 of the European Unions credit card debts. Recent studies show that close to 90 per cent of credit card companies fail to check the applicant’s income.

Banks in the UK are giving individuals with low income credit cards with up to £10 000 limit. One case showed that an individual with a yearly income of below 10,000 received a credit card with a 12,000limit. If this individual made minimum payments amounting to 1/3 of their salary, it would take 28 years until they were debt free, paying £8.600 in interest. This has left Britain with total unsecured loan amounts of £1.13.

Last July Lisa Taylor, 26, from Lancashire had accumulated a combined debt of £14,560; this sum included a student loan, borrowings from Barclay, Egg and Capital One. The demanding letters threatening legal action, phone calls and overall pressure of knowing she couldn’t afford to pay back her debt finally became too much. Lisa Taylor committed suicide in July 2005, leaving a letter to her father saying she had “serious debts that I will never pay off. I can’t bear it any longer”

According to Martin Hickman from the Independent 90% of credit card companies will not ask for proof of income when clients apply for a credit limit. A figure showed that before Christmas 100million credit card applications were sent out to clients without them being requested.

Are we taking the easy way out by blaming the lenders when we are the ones spending money which is not ours?![?]

www.student-debt.org


For more information on student debt please visit student-debt.org