Pay off unsecured debt first

The UK borrowers can take advantage of the record low base rate, which has remained as low as 0, 5 per cent for the last fifteen months. Those who have variable or tracker rates now are paying up to hundreds of pounds less than before.

Some borrowers have opted to use their monthly savings to repay their home owner loan or mortgage or accumulate a money reserve in a deposit account; others have decided to make overpayments on their personal loans and credit cards.

As a result of negative effects of the recession, a large number of British people were forced to apply for personal loans and credit cards in order to survive a difficult period and, thus, in many cases, amassed substantial personal unsecured debts.

Although it is always good to overpay on home owner loans, or put down savings in a deposit account, neither of these options can have an advantageous effect at present because of incredibly low interest rates on both of these.

However, as interest rates on unsecured loans and credit cards are generally higher than those on a variable rate home owner loan at the moment, it seems more reasonable to pay off these debts in the first place.

Thus, while the base rate is so low, borrowers are strongly recommended to overpay as much of their unsecured loan and credit card debts as possible.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.