Loans repayment penalties are not helping consumers in Britain

In the present scenario repayment penalties are not proving helpful to reduce consumer debt. These penalties are meant for people who pay back the loan amount before the completion of its terms. Recently these penalties are limited to a certain extent. But, such reforms are not helping the Britons, as more and more Britons are struggling with their debts.

London (online-unsecured-loans), 21, September 2006: As per the comments from one provider, repayment penalties on loans are not helping the Britons anymore. Well, most of the Britons have take all various types of loans such as unsecured loans, secured loans, unsecured business loan etc. Moreover, these penalties are not a proper method to reduce consumer debt.

Actually, people who pay back a loan before the completion of the term have to pay early repayment penalties. According to James Alexander, a spokesperson for Zopa: "Early repayment penalties are a classic example of self-serving sharp practice by the financial services industry, designed to protect and increase profits at the expense of encouraging customers to do the right thing with their money." He went on to add "ministers should ban the practice together with exit penalties on pension transfers, since people are currently struggling with excessive personal debt".

As per official figures, currently Britons owe personal debts of over £1 trillion that means 10.5% rise over the last year. On the other hand, recently Citizens Advice warned that more than 770,000 people with mortgage had already missed one or more of their repayments in the last one-year.


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