Debt consolidation 'becoming rarer'
19/04/2010
Fewer personal loans are being taken out for the purposes of debt consolidation, according to new figures.
Research by Sainsbury's Finance has found that only £1 of every £50 of lending taken out in 2009 was for the purposes of paying off existing borrowing, compared with £1 in £19 in 2008 and £1 in £13 in 2007.
Instead, purposes like car purchases and home improvements have been the dominant reasons.
The bank said that this suggests consumers have been increasingly seeking to pay off their debts instead of adding to them, noting that this would be in line with Bank of England figures suggesting net repayments of personal debt in the latter part of 2009.
Last month, a spokesman for the Consumer Credit Counselling Service said the charity's own figures have indicated a changing approach to debt among the British public.
It said those coming to the body for help and advice owe less on average than they used to.
|
Recommend: