One In Six Australians Have Problems Repaying Debt

Post by Sharat on October 13, 2009 · Under Australian Economy, banking, credit cards, interest rates, mortgages, personal loans · Comment

One in six Australians is having problems with repayment of debt aside from the additional burden of increasing interest rates, the result of a new survey has found.

The survey conducted by market intelligence firm Veda Advantage, also suggests that more than 20 per cent of Australians applying for additional credit during the next six months will have problems paying off their debts.

25 per cent of those who are having trouble meeting their obligations, now carry more debt than they did a year ago.

Russell Evans, general manager Veda Advantage, said that though the majority of Australian families were using credit in a responsible manner, a small but sizeable minority are having problems.

“Under current laws, this group can be invisible until it’s too late,” Mr. Evans said.

Mr. Evans said that though the Federal Government should be lauded for enacting responsible lending laws, financial institutions that provide credit were operating in the dark.

“A simple change to the credit reporting laws will allow credit providers to check a borrower’s current credit commitments and repayment history before additional credit is granted. This would protect families from taking on more debt at a time when they need assistance to help them out of debt.” Mr. Evans said.

Mr. Evans says he believes that the Federal Government’s responsible lending legislation will be ratified by the Australian parliament later this month, but added that the new regulations will still be inadequate without creditor access to more transparent information.

“Lenders will struggle to identify families and individuals who are in financial difficulty.” He said

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