Asa Ghaffar's Blog

Although Bank of England base rates are falling, the cost of loans is increasing. With rising levels of unemployment, financial institutions have become increasingly reluctant to lend because of the risk of loan default. Approval levels for unsecured loans are plummeting. This has created a boom for peer-to-peer lender, Zopa Loans. Unlike other lenders, Zopa act as an intermediary allowing people to lend to each other. It is possible for someone to borrow between £1,000 and £15,000 over 36 or 60 months, although a borrower can pay back their unsecured loan at any time. Zopa loans are for those aged over 20, earn in excess of £25,000 per annum and have a good credit rating. If you fall into this category, you will be well-served by making an application for a low APR Zopa loan. Those struggling to make an income on savings may also find that Zopa loans provide a wonderful opportunity. Individuals that have a bad credit rating are unlikely to have much joy with Zopa loans. People that are struggling with bad credit can apply for a bad credit unsecured loan from an alternative provider, but the rates are likely to be 50-60%. There are also loan sharks to be wary of, not to mention the usury rates offered by a Payday loan. Individuals that are struggling with a bad credit rating may be better served pursuing a debt solution, such as a debt management plan, personal bankruptcy or Individual Voluntary Arrangement. Remember to always seek advice from a free debt counselling service before proceeding.

I regularly get emails from people with serious debt problems asking what they can do to get out of debt. Financial difficulties affect every facet of peoples' lives. They cause marriage break-ups, health problems and can even result in suicide. No matter how bad things may seem, there is always a solution. There are a number of excellent debt solutions available, including an Individual Voluntary Arrangement (IVA) and a Debt Management Plan. Others can resolve financial issues by changing their lifestyle and cutting back on spending. However, an alternative debt solution has become available for those with credit agreements of up to £25,000. All agreements must have been signed up prior to the 6th April 2007. It is a debt solution that isn't like any of the others because it can result in the entire debt being written-off. The Consumer Credit Act 1974 places a requirement on lenders to comply with the legislation with regard to certain 'implied terms'. The following types of credit agreements are potentially unenforceable: Secured Loans, Unsecured Loans, Hire Purchase, Consolidation Loans, Car Loans/Finance, Credit Cards and Store Cards. It is believed that about 60% of all credit agreements aren't legally enforceable. My advice is to get your agreements checked over by a specialist solicitor to see if the debt can be written-off. A number of private companies are offering a free credit agreement audit. It is then the decision of the borrower whether they wish to proceed with a case against the lender. It could be potentially life-changing.