IVA.co.uk has expressed its concern about sub-prime mortgages and loans being the only choice for some people. The problem with sub-prime lending is that the loan to a person with a bad credit history increases the potential risk the borrower will default or miss repayments and so because of this they charge very high rates of interest on the monies borrowed. This in turn can lead to those in debt increasing their debt.
Andy Davie from IVA.co.uk says;
“We at IVA.co.uk are worried to hear reports of the growing number of people being forced into the sub-prime market for loans and mortgages. Sub-prime lenders specialise in offering mortgages to people with poor credit ratings at very high interest rates and this will particularly apply to those undergoing IVAs…
My solution is simple. Property issues should be dealt with in the first year of an IVA, as is already the case with bankruptcy…
This will help to prevent those coming out of IVAs from entering further spirals of uncontrollable debts.”
Read the article and more about IVA.co.uk here
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