Report: More missing personal loan repayments
A new survey from consumer website MoneyExpert indicates that more people are missing monthly repayments on personal loans, risking serious debt. The report shows that nearly 250,000 people per month have missed monthly payments in the past six months – a total of 1,389,000 payments, or three percent of all loan repayments due during that time period. The problem could become worse, the study says, because the most recent interest rate hikes are still to be felt on the household level and more increases in interest rates are predicted to be coming soon.
MoneyExpert’s chief executive said that the missed payments are a signal that household finances are coming under stress due to the resent rate hikes. He said that many people likely skip repayments on unsecured personal loans because they think there aren’t as many consequences to missing those as there are to missing mortgage repayments. He warns, however, that missed payments can affect the individual’s credit rating and are not the way to manage one’s finances.
The problem of missed repayments is not likely to get better anytime soon, considering that a larger proportion of income in the average UK household is going to bills. According to a separate report from accountants Ernst & Young, the proportion of household income now going to mortgage payments, taxes, and household bills has risen to 78 percent on average. Again, rising interest rates are said to be the culprit.