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Borrowers have `unrealistic expectations`

20/08/2007

Two-thirds of borrowers have unrealistic expectations about when they will pay off their debts, a new survey has found.

On average, borrowers have non-mortgage debts of over £11,000 which they expect to pay back within three years. However, it would take over seven years to pay off such a sum, according to fool.co.uk.

Nearly a fifth (19 per cent) of those polled with debts of more than £20,000 said that they could not afford to make any repayments at present, while 31 per cent will use over a fifth of their monthly wages to pay off debts.

David Kuo, head of personal finance at Fool.co.uk, says: "It is worrying to learn that two out of three people have taken on debts without fully understanding what is involved or how long it will take to repay the loan."

A number of debt solutions are on offer across the market, including individual voluntary arrangements, which reduce the monthly payment of debts in agreement with creditors.

Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according British reliance on gas for energy growing 06/01/2009 - New figures suggest that Britain’s dependence on natural gas is Small business seek cap on credit cards 06/01/2009 - Credit card interest rates should be capped to help small