loan news

The Chief Financial Ombudsman has warned that masses of homeowners could face future debt problems after taking out an interest-only mortgage.

The Financial Ombudsman Service is an independent complaints committee who resolve consumer complaints and they have warned that people who took out interest-free mortgages a decade or so ago may not realise that their actual loan hasn’t been paid off – only the interest on it.

A list of complaints to the financial ombudsman service was dominated by complaints relating to controversial Payment Protection Insurance (PPI) claims.

During the 2009-10 period nearly a third of new complaint cases were related to PPI. PPI is taken out by customers to help them pay off their loans, credit cards and mortgages should they be made redundant or seriously ill; however they have been highly criticised in recent months for being mis-sold.

Millions of students face paying more interest on their student loans to create more money for universities, elite university group suggests.

The Russell Group has said that students could end up paying higher rates of interest on their student loans because several universities were “severely at risk” from budget cuts that are being introduced to try and solve the UK’s debt problems.

New research has revealed that lenders are restricting one quarter of deals on home loans to their existing customers.

Research by market analyst Defaqto showed that the number of mortgages has increased significantly from 1,686 up to 2,948 from last July.

However, the research also showed that 26% of the home loans offered could only be taken out by existing customers of the bank or building society that was offering them.

Graduates and students may face higher interest rates on their student loans following an unexpected increase in inflation rates.

Around three million graduated and students will be affected by the increase in interest rates from September this year.

The interest rate on a student loan is based on the level of Retail Prices Index (RPI) in March, which unexpectedly rose to 4.4% which will lead to an increase in student loan interest rates.