Radio 4 this morning - responsible lending...

Kevicho

I treat most of these "surveys" with sceptisism, as ive never been asked to participate in one, and im sure no one else on here has

david_hellier

I've been contributing to this site on and off for about a year now and one of the things that strikes me is the pain and guilt that people express when they bare all on this site. Most people get into a mess because they overspend, that's obvious, but the reasons they do it are not so.

Of course we all have a responsibility to pay our debts but equally, if not more so, the banks have a responsibility to ensure that they lend to people who can afford to pay it back. It is in this area that the banks are woefully incompetent. This is particularly the case with teenagers and students; banks pile on loans, cards etc and often it is the parents who have to sort things out, before even the child has a regular income. I would encourage those parents to challenge banks in these cases with negligence, if only to achieve relief from extortionate interest rates.

The reality is that banks are not interested in whether the debt can be repaid. They do not and will not speak to each other about how much is being lent. On loan applications they make little effort to assertain if the applicant can afford repayments.

So I would say to all those in debt; it's not all your fault. The banks have to take most of the blame. A loan is a long term contract which requires the borrower to be solvent during the whole of that period. The bank has an equal responsibility to ensure the borrower has enough money to repay for the whole of that period. If not that is negligence.

Banks are making the issue of access to easy money confusing and slimey. They constantly look for new ways to hood wink people into paying more and more fees, penalties and interest, exploiting people's inumeracy and innocence. This simply exasperates the situation, creating pain, guilt, breakdown in relationships and bankruptcy We need to start making legal claims for compensation in this regard on the basis of negligence.

So please everyone, pull together and let's not be bullied by these parasites.

Thefunkygibbons

In reality the banks work off averages and there are a lot of things they do not know

Looking at my credit report, there are a number of things missing, and it also says nothing about savings

So quite simply, they do not really have enough information to determine ability to repay

climbgirl

Kevicho wrote:

I treat most of these "surveys" with sceptisism, as ive never been asked to participate in one, and im sure no one else on here has

You don't need to be in a survey for them to work out average debt - they take the total amount of unsecured debt (if they're excluding mortgages) and divide by the number of people in the UK (the calculation at it's most simplest).

That's why the average debt level seems low - there are many of people in the UK who have no debt at all, they skew the figures.

Storm

Responsible lending is weird term I think. Most companies will want to ensure that the customer can repay the loan/credit card, cos otherwise they lose out eventually. However, when you hear about the level of some people's debts (and that guy who killed himself because of it) you wonder how they actually decide on the affordability!

We all need to take some responsibility for our debts, but I think the biggest problem is the way in which these debts are advertised as going to save you money and solve all your problems. I've learned so much from reading these forums, and the common mistake people make is getting a consolidation loan then not changing their spending habits.

There's a lot of people out there (me included) who need to figure out the difference between 'want' and 'need' and to get into the habit of saving up for things rather than getting them on credit & paying them off. For me, working out that some of those 'bargains' that were so cheap have effectively cost 2 or 3 times their value with the interest has been the kick up the b@ckside I needed!

Broken_hearted

I would say the average debt is around £10,000 per person. I wonder if they calculate people with no debt into their figures to make them look better.

Mirtos

Now, I've been thinking about this, and it's actually in the banks best interest for people to have to struggle a bit to repay their debt. Not A LOT, so that they default and the bank loses out, but the more people only making minimum payments, the more money the bank makes in interest and the odd late charge IYSWIM? Maybe they calculate it all so it's just hard enough to make the payments that we can't overpay, but not so hard that we can't pay at all. ??????

lynzpower

Completely agree mirtos. A classic example is barclaycard who will not allow you to make a payment with them over the phone if youve already paid your monthly bill.

Lets face it they want to get your in debt, why give instant grand overdrafts and credit cards to students as soon as they start uni for example?

I take responsbility for my overspending, but the banks have something to answer for as well. Very definately.

Bells&Whistles

Mirtos wrote:

Good point - It freaked me out though that the average debt is around £3000 - and MINE is £18k+ :eek:

I felt the same way, bit of a kick in the teeth really !

dinkylou

I'm always very very cynical when I hear this and that about the 'average debt' excl mortgages.

After all, peoples student loans dont show up on credit reports so the banks have no way of knowing what you owe there. Only the SLC/government.

Do you honestly think that they would admit to the real total of how much student debt is now? Doubt it.

I think they survey people and use that info on student debt as gospel. Anyone I know as a student or grad has at least 8k, at least. There are alot of students of grads in the UK, somehow that doesnt add up to 3k per person in my mind. Not unless there are alot of people somewhere who have no debt whatsoever - show of hands please?