Desperate Borrowers Advised to Consider IVAs to Help Repay Loans

Fri, 16 Oct 2009

Struggling borrowers are being reminded of the benefits of an individual voluntary agreement (IVA) if they are struggling to cope with repayments on their debts . Despite the Bank of England slashing the base rate from 5 per cent to a record low of just 0.5 per cent, interest rates on personal loans have risen sharply, with small loans of around £1,000 typically accompanied by an interest rate of up to 20 per cent. Best buy deals on larger loans have now dipped below the 8 per cent mark, though these deals are reserved for borrowers with good credit histories. Lenders increase interest rates on loans by as much as 1 per cent as recently as last month.

For borrowers unable to secure these deals, debts can mount and repayments soar due to high interest rates. IVAs allow borrowers to freeze interest on their debts, and enable them to gradually repay their debts in manageable chunks.

Borrowers should be wary of the impact of having an IVA on their credit history, but IVAs can be a good option for those with sizeable debts from credit cards or loans who are struggling to keep up with debt repayments .
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