Consumers urged to ensure they can afford loan repayments before they take out loans

It has been suggested in a recent report that consumers in the UK who are thinking of taking out a personal loan should look take measures to ensure that they can comfortably afford to make the repayments before making any commitment, especially in the current climate where many people are still fearful over losing work hours or even losing their jobs even though the recession has officially ended.

Mintel published a report at the end of last year which suggested that up to 880,000 consumers in Britain could be looking to take out a personal loan over the course of this year, and those that rush into it without actually working out whether they can afford the repayments or not could end up in financial hot water very quickly.

A report in the Daily Express recently has suggested that those who are considering taking out a personal loan should work through their budget carefully to ensure that they will be able to comfortably afford the repayments before signing on the dotted line. This means that consumers need to sit and work out their income as well as their outgoings to see what they have left over. It is also important for consumers to ensure that they repayments will not bring their budget close to breaking point, as even a slight change in financial circumstances could then tip them over the edge leaving them unable to meet repayments.

The report suggested: “Write down all the money you’ve got coming in and going out. When you’re comparing loans don’t just look at the APR of interest on the loan. Also check the Total Amount Repayable, which includes every penny you’ll pay for your loan, including fees and charges.”