A voluntary banking code followed by the banks and building societies require them to assess the repayment capabilities of the consumers before lending money.
London (online-unsecured-loans) September 20, 2007: The banks and building societies who are signatories to the Banking Code are required to demonstrate responsible lending practices.
Adrian Lloyd, a representative for the Banking Code said: “What the code actually says is - We will assess whether we feel you will be able to repay the borrowing.”
Lloyd further explained that even in the event of people getting into financial difficulties, the code requires that people must be treated sympathetically and positively.
The Citizens Advice Bureau is receiving a record number of debt queries from the people. It shows that both the lenders as well as consumers need to take responsible measures. The Bureau received 1.7 million debt queries in its offices in England and Wales last year, registering a whopping increase of 20 percent. Credit cards and unsecured loans were responsible for the 40 per cent of the queries that it received.
According to Credit Action, a national charity, the average consumer borrowing from credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has reached £4,515 for an average adult in the UK at the end of July 2007.
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