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Personal Loan Debt Increases

The level of personal debt on loans, credit cars and home owner loans and mortgages in the UK is continuing to increase, according to the latest figures from the UK’s leading financial institutions and with it, the level of bad loan debt is also rising.

During the second three months of this year alone, banks and other loan companies wrote off £3.47 billion worth of bad debts on personal loans and credit cards to individuals. This equates to £38.06 million every day throughout the quarter.

Growth in the level of personal loans and card debt amongst UK consumers grew by 0.9 per cent over the course of the past twelve months, to reach a total figure of £1,428 billion. This means that personal debt in the UK is currently higher than the total production for the country in a year.

Across the UK as a whole, the average amount of debt stands at £8,590 per household, if we exclude home owner loans and mortgages. If we only consider those households who already have an unsecured loan of some kind, them the average debt increases to £17,896 per household.

If home owner loans and mortgage are included within the figures, then the average personal loan and card debt in the UK stands at £56,690 and the average amount of mortgage or home owner loan is currently £108,896.

The typical level of interest which is paid on personal loan and credit card debt per year by an average household is £2,619 and it is estimated that the average household will spend around 15 per cent of its annual income on paying loan interest.

The Office for Budget Responsibility (OBR) has predicted that personal debt in the UK is likely to rise at a rate of £159 per day. This would create a total personal debt figure of £1,823 billion by the end of 2015, which equates to an average figure of £72,341 per household.

Source: http://www.bestloans.co.uk/