Figures show pre-Xmas growth in personal loans
20 December 2011 14:03:00
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| Many people used personal loans in the weeks before Christmas. |
The association's monthly report shows that increases were seen in personal loans, credit cards and store cards in October, with many consumers increasing their levels of unsecured debt.
Growth was also seen in car purchases, with lenders handing out 11% more to people buying new and used vehicles than they did in October 2010.
Fiona Hoyle, the FLA's head of consumer finance, said that up-front planning is "essential" for anyone using credit to make last-minute purchases ahead of Christmas.
"But before using credit, think how you're going to pay it back, and what the best product is for you," Ms Hoyle advised.
She added: "If you're in financial difficulty, seek help. Speak to a debt adviser or your lender as soon as possible to discuss a sensible repayment plan."
Campaign group Consumer Focus recently expressed concern at the number of people turning to payday loans and only managing to pay off interest, rather than the original debt.
The organisation has called for new safeguards to protect consumers, such as an annual limit on the number of loans that can be taken out or rolled over, as well as stringent checks to ensure people can afford their loan repayments.
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