Consumers Continue To Pay Off Loans
Last year saw the beginning of a change in consumer trends within the personal loan and home owner loan markets, as a growing number of borrower chose to repay additional amounts off their loans and other debts, following the wake up call provided for many by the effects of the credit crunch and recession.
Although the UK is now officially out of recession and growth is slowly starting to return to the economy, it seems that the lessons learned by many people with loans have been taken on board, as consumers are continuing to repay their loans and other debts faster than they are taking them out.
Figures from the British Banking Association (BBA) have revealed that the amount of new lending on loans, credit cards and overdrafts was £0.3 billion lower than the total amount of loan debt being repaid over the course of April.
The figures also show that net lending over the course of the year to date has fallen by 2.6 per cent, as borrowers continue to repay their loans and other debts.
It also seems that savings have suffered as a direct result of loan repayment, with savings only increasing by £0.4 billion in April, compared with £5.4 billion which was placed into savings accounts during the previous month.
David Dooks of the British Banking Association commented on the changing trends, he said “Household priorities are clearly reflected in these latest data, with people paying down debt rather than building up savings, even in the main ISA season. Uncertainties about the impact of government policies and the economy on households and businesses will continue to dent consumer confidence and influence decision making.”
