Despite widespread reports of people overloading themselves with debt, loans can be a good thing and bring benefits to borrowers, it is claimed.

Most consumers in the UK are "sensible" with their money and can manage their finances properly, according to the Finance and Leasing Association (FLA).

The people most likely to find themselves struggling are those that are affected by a sudden event such as redundancy or divorce, said Edward Simpson of the FLA.

"There’s been a lot of bad press, but by and large most people manage their outgoings comfortably, and it’s a minority of people that get in to trouble really," said Mr Simpson.

He added that the borrower has "got to make sure that they don’t overextend themselves", and that they’re in a position to repay outgoings.

And he said that, when used "sensibly", credit is a "great enabler because it allows you to manage the peaks and troughs of your spending".

The FLA is the principal representative of the asset, consumer and motor finance sector in the UK.

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