More bad news for people struggling with debt problems in the UK comes in the form of a recent report. Findings from the British Bankers Association have revealed that Britons owe high street banks £52 billion in debts from personal loans.  The total amount of new loans taken out in February was £1.3 billion, £100m higher than the previous month.

This of course will come as no surprise to us all; however I am surprised that lenders are willing to lend such amounts of money whilst there is a high risk that the borrower will be unable to keep up with the repayments and as in most cases will end up paying off the interest each month and be forced to seek debt help advice or debt management.

The BBA believe the increase may be linked to Britons borrowing money to take advantage of the government’s car scrappage scheme. However as I remember the scheme was introduced to encourage consumers to buy new cars in order to help boost the economy. On the plus side, the new findings also revealed that overdraft debts decreased last month by £200 million, with the net figure now standing at £9.3bn.

I believe that the increase in UK borrowing will encourage borrowers to try and sort out their debts in a more effective way through debt management, which will enable them to pay off their existing personal loans and credit card debts without having to take more credit from high interest lenders as the high street banks are being more careful with who they lend to.