Debt Free News

Rise in rates affects debt levels

January 17, 2007

Unfortunately, with the continual rise in interest rates, our debt free article readers must understand that debt levels will be impacted by this. It is being reported today to our debt free news writers that consumers and companies have taken on less debt in November 2006. This was after many banks raised the cost of loans for the third time in 2006.

In fact, our debt free readers should also understand that the total amount of money from personal loans fell just under 1.3% that same month. That figure was nearly  $6.63 billion – down slightly from about $6.69 billion In October 2006. With debt  statistics like this, we are remarking and noting a definite change that will affect debt levels.

On the other side of loans, our debt free writers have learned that the total amount of money for commercial finance lowered in November 2006 to nearly 11.9%. That figure was nearly $33.33 billion that month. This is from the higher October figure of about $37.78 billion. This is certainly not a debt free level, but the interest rates bank are offering are causing this downgrade of debt levels.

Here at DebtFree24.com, our debt free news staff thinks these figures have to due with the economy and how many debt free achievers see that the economy may be ready to slow down further as consumers and businesses continue to spend less when these higher interest rates are sticking around.  While economists are not says the economy will continue to ebb tremendously – but it does not take an economist to figure out that the housing market and interest rates will continue to effect debt levels. Debt consolidations included.

We have also witnessed a spike in consumer bankruptcies as well due to climbing rates. Some consumers are turning to this unwanted outlet to settle debt because they have no other viable options.

Think of it this way, when our debt free news article readers put the sluggishness in business loans and mix that with the continued skittishness of many consumers to take out any new loans and spend and it – it is really hard to comprehend where any of our future economic growth will come from.

All in all, we want our debt free advocate readers out there to understand that loans to individuals to buy a property for rent or resale fell just under 1.5%. Lease financing at the same time rose almost 0.2% during that same month as well.  

Additionally, we see that finance for owner occupation also fell just under one percent in November 2006.  Let’s all face it, we want to become debt free and with debt getting more expensive, we are all starting to tighten the belt and acquire less debt and new loans of any kind.

Quite honestly, as many of our debt consolidation and credit card debt free readers can understand first hand – many consumers are facing a big struggle  - this includes home buyers – even home owners are struggling with mortgages.

The value of unsecured debt, all in all, fell less than $1.85 billion in November 2006.

Here at DebtFree24.com, we can report to our readers that debt consolidation and refinancing showed the largest improvements.

In fact, loans for debt consolidation jumped almost 14% to $357 million in November 2006.

While many US households will continue to tighten their spending – partly to make up for debt created from the holiday season, we will be hopeful that a big recession is not due to take place.

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