Half Of Unsecured Personal Loans Used To Consolidate Debts

Wed, 03 Jun 2009

More than half of unsecured personal loan applicants borrow money to consolidate existing debts, new research has revealed.

According to the Halifax Annual Loans Review, debt consolidation loans are the most popular among its unsecured loan customers, with 54 per cent of borrowers opting to move their debts from more expensive products, such as credit cards, to a more affordable personal loan in order to reduce their borrowing costs.

Buying a new car was found by Halifax to be the second most popular reason for applying for an unsecured personal loan, with 23 per cent of loans taken out for this purpose, followed by loans for home improvements (15 per cent).

The study also found that many loans are taken out by people who wish to develop their skills through training or study.

Commenting on the findings, Russell Galley, director of Halifax loans, said: "Our research shows that loans are taken out for a wide variety of reasons."

"Similar to the last annual review there is a continued trend in the number of people who are looking to invest in themselves and their future by undertaking further training or making purchases which will help them work smarter."

He added: "Whatever your reason for taking an unsecured personal loan, with Halifax you'll have no monthly repayment for the first three months."

"This breathing space could help you to pay for other essential extras, such as buying books when taking a course."
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