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DebtFC and "Wild Women" Talk 107 RadioUK, May 14, 2007 - Last week I was invited on Talk 107 radio station “Wild Women” presented by Liz Clark and Hayley Matthews to discuss debt problems. We discussed that it seems we are becoming a nation of debt-a-holics with the attitude of spend now and pay later. Certainly at DebtFC we find that more and more under 25’s have unsecured debts over £30,000 often this debt is the result of buying items of high worth such as designer clothes, handbags etc. We find that many young people take out personal loans with little or no understanding of interest rates often asking how much will that be a month instead of how much interest will I be paying a month. On leaving school young people are inundated with credit card companies offering them credit cards it is easy to see why a young person will take up these offers – simply because they can. Some lenders offer personal loans for interest rates as low as 6% APR. However, this only means that you can get the loan at 6%, if you have a really good credit rating. If you don’t you could pay 10, 15, or 25%, depending on the type of loan and who is lending the money. Our advice is to borrow as little as possible, and try to repay as quickly as possible. Always try to base borrowing on what you can comfortably afford to repay, as over-borrowing can lead debts to spiral out of control. And remember, while borrowing over a longer period spreads the debts and decreases monthly repayments, it will increase the interest that you will have to repay. Borrow £10,000 at 7% over three years and the interest cost is £1,100; borrow the same over 10 years and it's £3,800. Comments by Marell Gillespie Director DebtFC |
