Consumers Still Avoiding Personal Loans
Over the course of the past few months there has been a significant rise in the number of people taking out homeowner loans and mortgages, as many individuals who may have been putting off buying a house take advantage of low interest rates on loans and relatively low house prices and as a result of this, new homeowner loan application have risen by 81 per cent in the past twelve months.
However, the same cannot be said for the personal loan market, which has seen a dramatic fall in the number of applications being made, particularly since the start of this year, as many individuals are starting to make a serious attempt to sort out their personal financial situation.
The news comes as the British Banking Association (BBA) has released its latest survey on personal finance trends in the UK.
According to the research, a growing number of people are making a special effort to pay off their credit card and personal loan debts whilst interest rates are still low and also to build up some savings to act as a cushion in case of future financial difficulty. It would appear that the recession has made many individuals wake up and realise just how fragile their personal finances actually are and made them reluctant to take on additional personal loans and clear their existing debts, whilst at the same time putting as much money to one side as they can for the proverbial rainy day.
Richard Davies of Lloyds TSB commented on the move away from dependence on personal loans and the need for savings. He said “Given the economic uncertainty around us, regular saving has never been more important. Attitudes have started to shift and people increasingly want the security of having a nest egg in place as a financial safety net.”
