[Closed] Unsecured personal debt....

Just checked - the latest headlines refer to the TUC report (which in turn relies on interpretation of ONS data) DOES include student loans

This is useful but not normal - usual data eg, data published by BoE for example would not include student loans in unsecured lending figures

Millions?

There are only approx 60m people in the whole country!

Got approx £35k in unsecured loans (if we include car in this?) so it probably only takes a few nutters to take the average well up.

A car wouldn't normally be unsecured as they can repossess it if you don't pay....

A grand or two on CC each month here, but always paid off, so in my mind there's no debt.

Interestingly we were talking about debt in the office earlier today. One of my (young) colleagues said how when he'd wanted an XBox he got a paper round to earn the money - but his Dad bought the XBox upfront and he repaid his Dad over about six months. He didn't pay any interest (!), but it really struck me as getting hooked on the instant gratification of credit at a [b]very[/b] early age !

ahwiles - Member

We don't need thousands of houses, we need millions.

Do we though, really? Pretty sure if the demand was that high rightmove would be bare, it's more to do with people lacking required deposits and or the existing pool of houses are not desired, for example theres a brand new housing estate round the corner and the houses are being snapped up left right and centre before its even finished, however the area is flooded with older houses that no one wants to buy.

So what we going to do, keep building newer houses and leave the existing older properties derelict?

On the note of debt, it's not a bad thing so long as it's managed correctly, me and the wife have more than the average but can comfortably afford to service the debt and accept that. That figure quoted by the media isn't the full picture. If the general public can't service the debt, thats when you start to worry. How do you think the economy keeps moving?

£0.00
Nothing.
Well apart from the amount left on the mortgage with Ex which will be a non issue in about 60 days as they are buying me out.
I borrow nothing now after seeing firsthand just how dirty banks and others play despite supposedly covering you with insurances, etc.
I take great pleasure in screwing them for every penny back now and will continue to do so for as long as I can.

It was (ironically) amusing a few years ago when John Varley the ex-chairman of Barclays explained why you/one is stupid to borrow on an unsecured basis - true, unless you have to - and was then blasted in the press for being honest!!

I once totalled up all of the potential borrowing I have in different credit cards and it was about £60000. "We see you're not using this card so we've increased the limit by £2000!". My experience in retail banking had 2 main things...

1 was, credit decisions were based on actual borrowing not total potential exposure.
The other was, when people opened a new card to balance transfer, the old one almost never gets closed. Like, a few per cent of the time. So that potential borrowing builds up, and is all too easy for people to dip into. Now, if you transfer a bank account, the old one gets closed. The same with an ISA. It'd be pretty straightforward to do the same with balance transfers, but for MYSTERIOUS REASONS the banking industry is inclined to leave easy-to-use, expensive lending facilities in place.

40% of funding now in O/N deposits and you can charge 18%+ on an credit card, why would a bank not be happy with this?

Nobody is screwing the banks. That's like the gambler kidding himself he's beating the bookies.

Nowt wrong with a bit of personal debt. Pointless being debt free with such low interest rates and it keeps our consumer and financial services sector dominated industry afloat. It wasn't so long ago warnings and concerns were being spread about the reducing levels of personal debt after the 2008 crash. People borrow money, buy consumer items that creates demand that employs people in making stuff for consumers to buy. Its the circle of life, and we're all trapped on that treadmill whether you think you are or not.

The problem is that peoples wages are not increasing significantly and are being suppressed due to high levels of employment - it's all about supply and demand, companies don't have to compete on wages.

What a strange economy we have created for ourselves.

The other was, when people opened a new card to balance transfer, the old one almost never gets closed. Like, a few per cent of the time. So that potential borrowing builds up, and is all too easy for people to dip into.

We could really use some legislation which enforced strict affordability limits similar to mortgages.....

We could really use some legislation which enforced strict affordability limits similar to mortgages.....

We do, however it's usually enfoced by the bankruptcy courts.

IF, however legislation was changed so say a bank that was found to lend more than a customer could ever pay was forced to write it off without penalty to the customer or bankrputcy then things would be different.

Won't happen.

Well apart from the amount left on the mortgage with Ex which will be a non issue in about 60 days as they are buying me out.

How are THEY buying YOU out?

I take great pleasure in screwing them for every penny back now and will continue to do so for as long as I can.

How are YOU screwing THEM?

Larry_Lamb - Member

Do we though, really?

yes.

not just to catch up with 10 / 20? years of not building enough houses, but to prepare for the next 10/20 years of population growth.

but 72 million Turks wont be coming any longer

but 72 million Turks wont be coming any longer

It'll be 320m US citizens moving in once we sign up to Trump's terms 😉

I use my credit cards even though I have cash savings far in excess of the balance.

Lies, damn lies and statistics innit

This. I am sure a lot of people are in trouble but a lot also have enough to pay of their debts if they had to. I have debt but on interest free, seldom pay any interest.

Do we though, really?

In an ideal world most people would like to be able to leave home at 18, and have a deposit for a house by their early 20's.

The average age for kids leaving home is apparently now 27! And according to the ONS 3.3 million people ages 20-34 still live with their parents. So that's 3.3 million people that would quite like a house (probably). Even if they all hook up that's 1.65 million houses.

So yep, I'd estimate we're about 2 million houses short of having enough for everyone under 34.

Add to that the higher divorce rate meaning that lots of people now find themselves single in their 40/50/60's and needing a new home (and to maintain access to their kids they need to be family homes, not bedsits)

BTL is a non-issue in this case, people still live in those homes, they just can't necessarily afford to buy them. But if there were enough houses the prices would drop and they'd not be such a good investment anyway.

TMH - cash not borrowing, however that is not your business.

How am I screwing them?
PPI payback, statutory interest, accumulative contractual interest, costs, court fees, and many more.

You do know that they have to pay you back at the interest rate chargeable on your card/account at the time it was taken don't you?
Which is accumulative.
Added to the 8% statutory which is what they usually try to get away with as a minimum.

I ensured Barclaycard got hit with a £22.7k fine for breaching CPR 31.14 & 31.16 after they refused to release paperwork.

I'm in for around for £100k.

But before you get all twitchy and righteous, 85% of that is an interest free loan from my inlaws used to pay off 2/3 of our mortgage.

The other 15% is the total value outstanding on a car PCP (which I don't intend to pay in full). Interest rate is 2.9%, so hardly credit card-esque.

Only one of those will be reported in the OP's figures of financial doom....

sorry not (meant to be) a personal question, merely trying to understand what you meant by a bank buying you out? I still dont understand. I get the second point about the fines though, thx

TL;CBA to read. Could it have something to do though with remortgages being a less attractive offer currently, rather than the multitude of 0% cc offers available?

Borrowing is dirt cheap right now, so why secure it?

85% of that is an interest free loan from my inlaws used to pay off 2/3 of our mortgage

Can they do me a deal too?

Bank? Bank aren't - my EX is with her best mate.

It was (ironically) amusing a few years ago when John Varley the ex-chairman of Barclays explained why you/one is stupid to borrow on an unsecured basis - true, unless you have to - and was then blasted in the press for being honest!!"

Surely it is far better to borrow unsecured than secured?
I've just took out a big loan, unsecured, mainly as it was done in 3 days, and I had applied for a mortgage extension which was taking months.
I got a better deal than my current mortgage rate - 3.3% over 5 years, whereas my mortgage is 3.5% (must get that changed)

whereas my mortgage is 3.5% (must get that changed)

You just have a crap rate for your mortgage, you could get 0.99% until yesterday.

You just have a crap rate for your mortgage, you could get 0.99% until yesterday.

A grand or two on CC each month here, but always paid off, so in my mind there's no debt.

This seems to be a common attitude. In your mind, when does it become a debt?

When you couldn't just clear it if you wanted to.

In an ideal world most people would like to be able to leave home at 18, and have a deposit for a house by their early 20's.

The average age for kids leaving home is apparently now 27! And according to the ONS 3.3 million people ages 20-34 still live with their parents. So that's 3.3 million people that would quite like a house (probably). Even if they all hook up that's 1.65 million houses.

Is that because of a shortage of houses, or a shortage of houses that kids can't afford now they don't think about saving for a deposit but can manage to have £80 a month mobile phone contract, brand new car on PHP, couple of holidays a year, £30 a week Starbucks habit etc.

This seems to be a common attitude. In your mind, when does it become a debt?

When the credit account balance exceeds the debit account balance?

Simple enough concept, just did it to get a credit rating, along with the added protection of the CC.

Is that because of a shortage of houses, or a shortage of houses that kids can afford now they don't think about saving for a deposit but can manage to have £80 a month mobile phone contract, brand new car on PHP, couple of holidays a year, £30 a week Starbucks habit etc.

Yes, all those things meant it took till I was 28 to get a house, nothing to do with the £80k deposit. 😆 I think I've been on two holidays abroad since I was 18, my phone is now 4 years old, my car 10, and I can't stand starbucks coffee.

But yes, you've hit the nail on the head, it's definitely Starbucks that's ruining the housing market.

definitely Starbucks that's ruining the housing market.

Yep, when they open a branch in the neighbourhood it's time to move near somewhere where they do direct trade beans and have a brew bar for chemex and v60.

Starbucks really lowers the tone.

What the hell were you buying for an 80k deposit.

I was being a little tongue in cheek but was having a similar conversation whlilst on a ride last week. Mates son wants a house with hs girlfriend. Shes just got a job, rather than think about deposits, shes just gone out and bought a brand new car without thinking of the consequences to the potential money they can borrow.

In my office 2 of the recently qualified have bought a new 1 bed flat - £450,000, in a reasonable area and another one is in the process of buying a 1 bed further out for £320,000.
We'd have to spend over £650k to buy what we'd like, so as a consequence we aren't going to, mortgage on our flat paid off in just under 3 years time, we may buy a house somewhere that's not more than 2 hours away for weekends and as a bolt hole and pension top-up.
Neither of us have unsecured loans, and reasonable savings. At least until next week when I pay my tax bill.

trail_rat - Member
What the hell were you buying for an 80k deposit.

Only a 10% deposit for a flat in some parts of that there London.

Yeah but he doesn't live in London.

"[i]This seems to be a common attitude. In your mind, when does it become a debt?[/i]"

When you're paying it off over more than one month. When the possibility of the lender suddenly calling in the debt is a problem rather than a shrug and a bank transfer.

I'm not talking about buying new bikes every week here, it's my everyday spending on stuff like food & diesel. If it wasn't on the CC it would be debit card straight out of my bank account and at the end of the month I'd be in exactly the same position. The CC just defers the payment - I get 1½% interest pa by leaving the cash in my bank account, and the CC gives me John Lewis vouchers too, so using the CC is actually an investment 🙂

Also, wot FF & TINAS said.

I was being a little tongue in cheek but was having a similar conversation whlilst on a ride last week. Mates son wants a house with hs girlfriend. Shes just got a job, rather than think about deposits, shes just gone out and bought a brand new car without thinking of the consequences to the potential money they can borrow.

To be fair, just copying her parents' generation and all the rest of us, hence the fact we're in record amounts of debt...

The Millenials have been utterly screwed - insecure, low paid jobs, massive student debts, unaffordable housing, being expected to use their taxes to pay off the debts of their parents generation as well as their pensions and old-age care but with absolutely no hope of the same benefits or even the same security of work or housing... I'm really surprised they haven't been rioting constantly for the last few years.

I can't blame them for trying to live a little - all the sacrifice they need to make to save for a deposit at today's prices means they'll miss out on all the things that make your youth fun...

Older generations only criticise the youth for not saving for a deposit as if the youth decide not to play the game of getting on the housing 'ladder' then the whole scheme will collapse and those older generations will find their unearned 'wealth' disappear like a puff of smoke. I'm not proud of what the UK has done to it's youth and the legacy we've left them with and I wish them luck in setting a better example to us than we have to them.

Over the weekend we mooched about a few Sofa/Bed places in the retail parks.

Pretty much everyone I noisily ease dropped talking to a sales agent was eagerly heading towards a credit agreement. And in some cases actually discussing the credit agreement they've just finished.

Yeah but he doesn't live in London.

Reading, but makes litle odds, house prices sit somewhere between 'how much!' and mental. The gulf between what you'd like and what's affordable is just daft.

Reading, but makes litle odds, house prices sit somewhere between 'how much!' and mental. The gulf between what you'd like and what's affordable is just daft.

Reading is expensive now because once Crossrail's open, journey times will be less than from SE London's outer reaches...

London's interesting at the moment - buyers have evaporated from Prime London with prices now falling and transactions across the whole city are c50% of what they were a year ago - it appears that London is running out of people willing or able to take on the debt required to live there.

Meantime, we all get deeper into short term debt for day to day living because we've already taken on more debt than we can afford to pay for housing. We've been suckered into breaking our own economy...

Reading is expensive now because once Crossrail's open, journey times will be less than from SE London's outer reaches...

Its already quick to Paddington, <30min so appart from opening up a link to east London I dont think it will have the huge impact people say it will. Unlike living in London there arent the onward links from the station so City Boys arent going to be buying even in the suburbs. And why would you want to live in Reading town center?

Coupled with the huge house building projects south of the M4 (Shinfield, 3 mile cross, spencers wood and winnersh all getting 300-400 new homes each) I think demand and supply might remain ballanced.

Can they do me a deal too?

Worst decision I ever made. I'd rather have paid the mortgage interest to a bank than be in hock to family.

It took me several years to realise that my inlaws use money as a form of emotional control over their children. Banks don't do that.

Worst decision I ever made. I'd rather have paid the mortgage interest to a bank than be in hock to family.

It took me several years to realise that my inlaws use money as a form of emotional control over their children. Banks don't do that.

Do you feel like you're being scrutinised for any signs of extravagance?