For consumers in need of a CCJ loan, it can seem pretty desperate when they are looking for a bank willing to take a risk. In response, many have decided to secure their CCJ loans with either equity in their homes or with their cars and the results could be disastrous if the consumer defaults on their CCJ loan. However, in a time of crisis, many simply don’t think about the consequences. With the economic crunch in full swing, experts are concerned that greater numbers of CCJ loans are going to go into default and those that used security will be left high and dry.’These are very high-cost loans and we would urge borrowers to be very wary of this,’ says Catherine Torazzo, from the Citizens Advice Bureau. ‘You can lose your car if you default on a payment, and the lenders have an awful lot of power, while there is very little consumer protection for the borrower.’Because of the credit crunch, there will be more individuals who’ll end up resorting to this,’ says Geeta Varma, a counsellor at the service. ‘People go into this kind of deal without considering the drawbacks - we hope that consumers realise what the risks are. We would never recommend this way to get credit.’
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