Popularity of personal loans linked to age

Mon, 04 Jun 2007

A new financing study has revealed that age may be a factor in determining how keen borrowers are when it comes to considering a personal loan.

In a research project from financial services provider Alliance & Leicester Personal Loans, it has been shown that 11 per cent of people under the age of 25 years old would describe personal loans as their preferred means of borrowing money.

By way of comparison, this figure almost quadruples to 40 per cent among the 35 to 44-year-old age bracket - suggesting that older consumers are less likely to rely on alternative methods of borrowing such as via credit card or store cards.

Commenting on the findings, Richard Al-Dabbagh, senior personal loans manager at financial services provider Alliance & Leicester, has suggested that borrowers of all ages may benefit from arranging a cheap personal loan.

"Anyone who is paying over the odds for large purchases on costly store cards or expensive dealer finance should look at how much they could save by moving to a low-rate personal loan," he contended.

Last month, the Bank of England's monetary policy committee raised the base rate by a quarter of a percentage point.

Responding to this, several financial services providers decided to increase lending rates for their credit card deals - in a move that could potentially prompt more borrowers to review their current financing arrangements.

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