Number of personal loans falls

Figures released today by the British Bankers Association (BBA) show that personal loans and consumer credit fell during October.

17:11 25 November 2004

Figures released today by the British Bankers Association (BBA) show that personal loans and consumer credit fell during October.

The BBA found that consumer borrowing was down across a wide range of financial products, including mortgages, credit cards and personal loans.

Although total credit card borrowing totalled just over 7 billion in October, this figure was actually down by 8.6 per cent when compared with the previous six month average. It is also the lowest credit figure since February 2004.

Repayments were also well up on recent averages.

The trend continues, with October's borrowing on personal loans down by 207 million, with a recorded figure of 262 million.

David Dooks, director of statistics at BBA, stated that reduced borrowing was to continue in the short-term, with competition between lenders increasing because of it.

"The weakening demand for both mortgage lending and consumer credit seen over the last few months continued in October and weak approvals data suggest that this pattern will be maintained in the short-term," said Mr Dooks, adding: "With mortgage lending volumes slowing it is not surprising that competition among lenders is intensifying and at the same time, borrowers are looking to reduce their borrowing costs."