Recent statistics released by the British Bankers Association (BBA) show that the amount of money borrowed through credit cards and personal loans went up recently for the first time since 2009. At the same time, the number of mortgage approvals also stood at a four-year high; these figures show both improved confidence in the economy and the housing market.
Confidence in the economy
One of the main driving factors behind these figures is the fact that many people now feel that the UK economy has turned the corner and so it is now a safer option to take out personal credit. This is a common theme when it comes to how recession and recovery affects the way in which people take out personal credit. When people feel that their financial future is more secure, they also feel that taking out personal loans and credit cards is a less dangerous proposition. Of course, whether or not this is the right thing to do is still very much a case of how well you manage your credit, because whether the economy is good or not, personal credit can very easily turn into personal debt.
Overall, over the last year there has been a 6.7% increase in credit card borrowing and a 5.1% rise in overdrafts and personal loans. When combined, the total amount of personal debt owed to credit cards, personal loans and overdrafts comes to a still staggering £80.1 billion. Nevertheless, despite this year-on-year growth, the total value of outstanding consumer loans still stands almost £30 billion less than before the recession began.
The housing market
It is not only unsecured credit which has seen an upturn recently; in August, a total of 38,228 mortgages were granted, compared to an average of 34,000 over the previous six months. Two recent government schemes seem to have kickstarted the UK housing market – Help to Buy and the Funding for Lending scheme.
Is it a good time to borrow?
Whether the economy is strong or not, if you are considering taking out any kind of personal credit, you need to look very carefully at your finances and what you can afford. First of all, do you currently have any personal credit such as personal loans and credit cards? If you do, you certainly need to be very much on top of those before you even consider taking on any more finance. If you are struggling in any way to pay your personal debts, now is almost certainly not the time to take out any more credit. You should always prepare a personal budget showing what you have coming in and going out before taking out any kind of loan.
Struggling as personal debt?
If you already have some kind of personal debt which you are struggling to pay, the worst thing you could possibly do is take out more credit to try and deal with it. This becomes a vicious circle which you will struggle to get out of. If you need assistance with your personal debt problems, contact Dissolve Debt today to see how we can help. We have an expert team of debt advisers standing by and you can contact us over the phone or through our website.