Nowadays, the prices of house, car and many essential items have shot up enormously in the market of the UK. Thus, common people find it very tough to afford the high costs of these things, unless they borrow money from the banks or other financial institutions. These financial organizations offer lucratively low-interest rate for their loans granted in various fields, thus encouraging people even more for taking loans. Therefore, the whole of the UK is now reportedly full of borrowers, who have taken some kinds of loans from the financial companies.
Few important facts about the craze for taking loans
- As per the recent survey that was done across the country, every household in the UK now owes averagely more than £50,000 debt, including their home loans or mortgages.
- The lure for a high-standard modern living has forced common people of mediocre income to fulfill their desires of buying expensive items by taking loans in large amounts. Thus, most of them go much beyond their affordability to keep up with the fast pace of modern times.
- The expenses have risen to the sky-high limit in many normal households, compared to their limited income that has not increased at the same rate. Thus, it becomes difficult for the people to pay off their debt easily.
- People are more inclined to seek loans through their credit cards and also may ask for unsecured loans, where no object is produced as a guarantee. As per the survey that was done in 2016, the approximate amount of net borrowing in the UK has risen to £34 billion, which is an alarming figure for any developed country.
- The amount of personal debt has grown at so high speed all over the country that now the ratio of debt to income in a common household was averagely 133% in 2016.
Thus, now the government of the UK has taken some effective steps to eradicate this problem of heavy debt from the life of the common public. There are some measures taken for helping the debt-ridden families, who are struggling to meet all ends with the repayment of their debts. Some helpful services are offered for the families that have borrowed and spent beyond their actual means, which many people have readily accepted. Some government bodies are also spreading financial literacy among the public, where they are taught about all the features and dangers of taking too many loans for simply upgrading the lifestyle.