With all of these personal loans being made, it is clear that there are all manner of different types of loans available and that individuals have been taking advantage of them. The more the debt increases, the less that income is able to cover the amount of money that is circulating in the world. With all of the personal loans available to individuals around the world, it is clear that there is all manner of credit being abused and used to cause all manner of inflation in everyday products.

“UK economic growth has chugged along quite nicely thanks to rising consumer spending which has largely been on credit. While most of the debt is perfectly serviceable and secured on dwellings, the rising number of insolvencies and repossessions is testament to this process having a negative outcome for an increasing number of individuals,” says Stephen Gifford, Grant Thornton’s chief economist.

Mike Gerrard, a personal insolvency partner at Grant Thornton added, “Typically, there is a lag between individuals facing tough financial circumstances and when they become insolvent. It will be the next six to 12 months which reveal how seriously the credit crunch has affected individuals.”

“Even if you are lucky enough to qualify, the sums are still quite frightening,” says Louise Cuming, head of mortgages at Moneysupermarket.com. “The 20 per cent rental discount would only save you enough for a minimum 5 per cent deposit on a house after around five years. And more important, where are the lenders to meet the demand for these mortgages? This seems to be yet more spin without substance and does not address the [main] problem of how to stimulate lending.”

Sky’s Business editor Michael Wilson said: “These concerns aren’t new ones but the stories over the weekend have just added to the confusion about what the US authorities feel about Fannie Mae and Freddie Mac.

“The fact that a significant number of people would rather get into debt than share their worries with those closest to them is a shocking indictment of the state of the nation’s finances,” says Moneynet.co.uk’s Andrew Hagger.

“It shows just how much pressure people are under to stay afloat and with house prices still falling, energy costs soaring and rising inflation keeping a cut in interest rates off the agenda, the number of people in real trouble will only increase.”

Esther James, analyst at Moneyfacts.co.uk, comments: “Family finances continue to be stretched, causing many to consider consolidating existing debts into one loan as a means of reducing monthly outgoings. Borrowers, however, will find that the reduction may not be as great as expected.

“14 lenders have increased loan rates in the last month, with two lenders, AA and Tesco Personal Finance, increasing rates twice. Anyone looking to consolidate their debts needs to make sure they shop around. Remember that if you do opt for payment protection insurance, the lowest rate doesn’t always equal the cheapest loan.”

“Availability has been the major issue for borrowers this year as the mortgage market has at times descended into mayhem with products withdrawn at short notice and rates rising and then falling,” said Francis Ghiloni, marketing and business development director at mform.

“Given the continuing uncertainty we can understand why it makes sense for borrowers to lock in to longer term deals so that they can plan their future and have a degree of stability and security.

“They’re opting to take a deal and then sit out the mortgage merry-go-round until it settles down.”

Tony Solomon, Business Development Director, Zurich UK Life, commented: “Whilst it is encouraging to see that people intend to lead such an active retirement, there is real need to alert people to the importance of planning for their retirement from an early age. If we fail to address this issue, there is a real danger that for those already enjoying their retirement, may be last generation to experience the financial freedom of a carefree retirement spent living off the children’s inheritance.”

The Right Honourable Michael Portillo commented, “The combined impact of the rising cost of living, rising inflation, fears of recession and the constant media coverage of the credit crisis, has created insecurity for a huge number of people approaching retirement concerned about their financial future. Given that so many people are aware that they will face financial difficulties in retirement, more and more people are staying on at work, or returning to work to help ease the financial pressures they face ahead.”

Louise Cuming of MoneySuperMarket, stated, “Compare rates across the market to get a rough idea if there are products available to beat those on offer from your existing lender. If you need some extra guidance, a broker should be able to recommend products to suit your circumstances.

“If you are confident you know which product is right for you, and that you are likely to be accepted, make the application directly to the lender. However, it is always worth double-checking the sums are correct and that all the costs have been factored in.

CML director general Michael Coogan said: “The trend away from fixed-rate products continues as expectations of further Bank base rate reductions, probably starting this week, have increased. The February figures relate to completions of transactions started several months ago. More recently, there has been consistent evidence of tightening in lending criteria which will lead to shrinking pipelines of new business as the recent Bank of England’s credit condition survey made clear. We expect this process of further tightening in lending criteria to continue in the second quarter as lenders respond to the challenging market conditions.

“Individual lenders are having to balance consumer demand with service considerations, as many of those active in the market are seeing higher levels of applications than they can deal with in the wake of the overall tightening in supply of funding to the market.”

“It’s astonishing to note that the average arrangement fee charged by 3 year base rate tracker mortgages has increased by 121%. In terms of rate increases the most significant increase has occurred in the two year fixed rate market were the average rate charged has increased from 5.42% eighteen months ago to 6.71% now,” commented David Black, Principal Consultant of Banking for Defaqto.com.

Melanie Bien from Savills Private Finance said: “Most lenders will let you switch from a repayment to an interest-only loan for a small charge, and the advantage is that it will significantly reduce your mortgage payments. The downside is that you are not paying off any of the capital. If you continue with an interest-only deal, you will have to pay back all the capital at the end of this.”