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Half of unsecured loans used for debt consolidation
Just over half of people who took out a personal loan last year did so to consolidate existing debt, according to new figures from the Halifax.
The Halifax Unsecured Personal Loan review found that 54 per cent of loan applications were for this purpose, often allowing people to move money from more expensive products such as store cards.
One in six took out an unsecured loan to make home improvements, while 23 per cent used the money to buy a new or used car.
There was also an emerging trend for customers wanting to use the money to improve their skills with extra training or education.
Russell Galley, Halifax director of loans, said: "Our research shows that loans are taken out for a wide variety of reasons.
"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."
A report from think tank the New Local Government Network recently suggested that the recession could cause more consumers to turn to unlicensed loan sharks for credit.