More customers meeting debt repayments -Lloyds

Lloyds Banking GroupA new survey carried out by Edinburgh-based banking giant Lloyds Banking Group has revealed confidence levels among those paying off unsecured debt remain high, with four in five (83 per cent) of respondents feeling confident or very confident that they will meet their future repayments.

The lender’s second Lloyds Bank Lending Report also shows there has been a rise amongst those who are able to keep up with their current debt repayments, at 84 per cent for quarter 2, (from 81 per cent) compared to the first three months of the year.

The bank, which owns Bank of Scotland, said fewer people have missed payments compared to the beginning of the year, with only one in ten (11 per cent) saying that they had missed at least one payment in the last 12 months, compared to 13 per cent in the first quarter of the year.

Sam Clark, Head of Loans at Lloyds Bank, said: “We are starting to see encouraging signs as more people can better manage their loan repayments. In addition, there has been an increasing shift in those saying that they will not need to take out more debt in the future.

“Overall, the results paint a positive picture and the upward move in consumer confidence will help a lot more people feel more in control of their finances.”

The top reasons people have taken out a personal loan include consolidating debts so that they are all in one place (31 per cent), and purchasing a car or bike (28 per cent). However, unsecured borrowing to making home improvements saw a decline (15 per cent), a fall of five percentage points.

Of those who used lending to fund a special occasion, nearing half (45 per cent) took out a loan to fund someone else’s birthday. While those who fund an anniversary (15 per cent) remains static, 19 per cent of men are planning to use a loan to fund an anniversary, where as only 11 per cent of women are planning to do the same.

Consideration towards using a personal loan has risen over the past three months by 58 per cent (12 per cent of people to 19 per cent), as has the consideration of credit cards which offer rewards, from 10 per cent to 16 per cent in the last quarter. Low interest credit cards have also seen a significant jump in consideration from 13 per cent to 21 per cent.

Overdrafts consideration has increased from 5 per cent to 9 per cent, while the consideration of peer-to-peer lending has doubled over the past three months to 4 per cent.

Applying for a loan has remained relatively stable in the past three months, with online (45 per cent), tablet (5 per cent) and mobile phone (5 per cent) devices collectively being the most popular channels at 50 per cent, followed by in branch at 32 per cent.

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