Bad credit loans: Debt tends to breed more debt

People are looking to take out bad credit loans as a result of increased financial pressures, a chartered financial planner has said.

Martin Bamford, chartered financial planner at Informed Choice, said that some people will always face relying on bad credit loans as a result of financial mismanagement, and will use the borrowed cash as a means to plug the gap between their earnings and lifestyle.

However, Mr Bamford said that some people turn to unsecured lending through choice as a way to access products and services without having to save for them.
Mr Bamford warned: "Debt tends to breed more debt, so a rise in unsecured loans points towards even greater levels of debt in the future."

Figures released by the Bank of England last week showed that consumer credit slightly reduced in August, with a fall in demand for bad credit credit card borrowing offsetting a reported increase in demand for other sources of unsecured lending.