Inflation Rate Causes More Misery for People With Bad Credit

Jan. 21, 2011 - PRLog -- It has been confirmed: the inflation rate is record high. It is due to the tax increase and the fuel price hike in the UK. But what does that mean for people with bad credit? Less options available to get rid of debt. Here are some reasons why some experts say it is going to be even harder to obtain credit in the future or consolidate bad debt.

People who are already struggling with bad debts and family budgets are likely to be it by the inflation the worse. It has been confirmed that many lenders have already pulled remortgaging deals and fixed rate products off the market. It is a sign that the BOE is going to start increasing the base rate next month, after keeping it at a low 0.5% for 22 consecutive months.

The cost of secured loans used to be much lower in the past 2 years than unsecured credit, providing a great solution for people who had loads of credit card debt and high interest rate store cards, hire purchases to get their finances sorted and lower their monthly outgoings. But it looks like these deals are going to disappear from the market.

House prices started to fall again and people are expected to have less and less equity on  their homes than ever before. Not to mention customers who have already used part of the equity to sort out their finances before, they might even face negative equity problems in the future.

It is not only the cost of secured loans that are going to increase, it is more than likely we are going to pay more on out unsecured debt as well in the future. Some deals have been put on hold and many lenders are going to increase their interest rates very soon. As the money they will borrow for lending is going to become more expensive for them after the predicted increase of the base rate.

Debt management companies have started to get very busy and if you are looking to get your finances in order in time you should go ahead right now to find which debt consolidation options are still available.

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I have seen many people struggle with bad credit in the UK recently. We have to find a solution for eliminating debt and starting a new, debt-free life.
More on: http://www.solvemybadcredit.co.uk