Unsecured loans mostly used for debt consolidation
The number one reason people take out secured loans is debt consildation, Freedom Finance research shows.
Half of borrowers (47%) take out loans for debt consolidation, followed by making home improvements (24%), buying a car (17%) and paying for holidays and weddings (6%).
Borrowers were mostly commonly managers, (701 applicants), nurses (414), heavy goods vehicle drivers (414), chefs (396) and teachers (344).
Jeff Poole, managing director of Freedom Consumer Finance, said: “These figures are a clear indication of the important role that credit plays in the UK economy, with several thousand people each year taking out a loan in order to fund the purchase of a car, improve their homes or most distinctly, to streamline their finances.
“Many view debt consolidation as one of the best and most practical ways to handle their monthly loan repayments which can often get confusing when dealing with various loans from multiple lenders.
“By consolidating debts it enables consumers to have one single repayment. As consumers become more financially savvy, it is really positive to see many of them take control of their budgeting which in turn can reduce overall repayments and improve their credit rating.”
Outside of London, which accounted for 9.8% of loan applications, the cities with borrowers most likely to be offered a loan were Birmingham, Manchester, Glasgow and Liverpool.