Brits considering taking out a debt management plan (DMP) have been told that they should not take out home loans which they cannot afford.
According to the Daily Mail, many families have signed up to loans for their houses that they are unable to pay and may be hit hard if interest rates increase. The Council of Mortgage Lenders said that around three million households in the UK could face problems if interest rates rise by two per cent.
Danny Gabay, a top economist, said that banks must deal with households who have loans which they will fail to repay, as well as sorting out their own finances.
Mr Gabay added: "Lots and lots of people borrowed too much."
In addition, Brits have been advised that they should think carefully before taking out unsecured loans, which could leave them in debt according to Informed Choice.
Debt Management Advice article from Baines and Ernst