Consolidation tops personal loan use
27 September 2007
Debt consolidation is now the number one factor behind the growing number of Britons taking out personal loans, Sainsbury's bank has revealed.
Some 40 per cent of people are now taking out a personal loan in a bid to manage their existing debt more effectively, a spokesperson for the bank explained.
The firm's head of loans, Steve Baillie, said that although many people are now choosing to use their loan as a means of saving, home improvements and buying a car remained popular reasons behind opting for a personal loan.
"The purposes behind personal loans are many," Mr Baillie said.
"Slightly more than a quarter of our customers are getting loans for home improvements, to add value to their property.
"The car and van market outstrips the home improvement market; just over 30 per cent of our customers are using loans for that.
"But more customers are saving now. People are looking at their credit and consolidation is the number one reason for customers taking out loans," he added.
Latest figures from Credit Action show total UK personal debt at the end of July 2007 stood at £1.3 billion.
