Loans 'should be approached with caution' - 02/01/2008

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Being turned down for a loan could signify it is a poor idea, the British Bankers Association (BBA) notes.

The institution asserts that responsible lending is an important aspect of the UK's financial system and banks that refuse loan requests should do so for good reasons.

People who have been refused credit from banks may feel the urge to investigate alternative options, notes the BBA.

However, Britain's leading trade body for the financial services sector warns that such action could be a mistake.

"If the worst happens and you get into difficulty, talk to your lender before signing up for 'get-of-out-debt-free' scheme you might see advertised, as there is no such thing," notes the association.

Britons looking to minimise the impact of lower mortgage approvals and higher bills should regularly check their bank statements, as well as being stringent with credit card use and pursuing a savings plan, it is recommended.

According to the BBA's chief executive Angela Knight, prudence could help UK consumers enjoy 2008 in a financially responsible manner.

Price comparison website uSwitch.com has advised that demand for debt consolidation loans could rise in the wake of the credit crunch.

© Adfero

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