Decreasing borrowing for personal loans
05/09/08
New Figures released by uswitch.com show the credit crunch squeeze means that consumers are borrowing less on unsecured personal loans. The figures show that the number of personal loans completed has decreased by about 40,000 each quarter over the last year.
Head of personal finance at uswitch.com, Simeon Linstead, said, "Our research has confirmed that both mortgage lending and unsecured loans are drying up by the day."
He also confirmed that unsecured loans have become more expensive over the last 12 months which has made it more difficult for the borrowers to complete a loan. Uswitch have also revealed that the rate for unsecured personal loans have increased by about 1.3 per cent over the last year.
However, Linstead added that the market for personal loans is "vast" and consumers can still find competitive deals if they take the time to shop around.
With unsecured loans being difficult to obtain more and more people are borrowing on credit cards. Credit card lending has increased by £179 million per quarter over the last year and at the same time unsecured personal loans has decreased by £283 million each quarter.
The collected data shows that credit card debt stands at £54.9 billion, owed by 30.8 million people on 67.3 million cards.
Figures from Apacs show that UK consumers spent £92.6 billion on credit and debit cards during the second quarter of this year.
