Loans market is still thriving (From The Wiltshire Gazette and Herald)

Loans market is still thriving

THE average personal loan stands at £5,500, according to research issued by Nationwide.

The building society, which employs 4,000 people in Swin-don and has its headquarters in Pipers Way, has issued its first quarterly report on the personal loan market.

The company already releases regular updates on the housing market and, since summer last year, has been measuring consumer confidence.

It has found that the loan market is still buoyant, despite the fact that house prices are slowing and the high street has suffered in recent months.

At the moment loans are outpacing credit cards.

Nationwide believes that the loans market which was worth about £13.5 billion in the first three months of this year, with 2.4 million loans agreed may slow down later in the year.

But it says as loans are often used for consolidating existing debt the market may escape the economy's cooling off.

Nationwide's executive director Stuart Bernau said: "It appears that the personal loans market remains buoyant, despite a gradual slowdown in other sectors of the economy.

"While consumers are generally easing off from borrowing more and focusing on clearing existing credit commitments, personal loans appear to remain a popular vehicle for tidying up household finances in a relatively low cost and structured way."

The loan report is drawn from Bank of England and trade association data, and revealed that the most common reason for a loan is buying a car, with 30 per cent of loans issued for that purpose 10 per cent for new cars and 20 per cent for used.

Home improvements, including DIY and new furniture, were the motivation behind 24 per cent of loans, and debt consolidation was the reason for 20 per cent. The total balance outstanding on loans at the end of March was £93 billion.