Thursday, July 2, 2009
Category:
Consolidation
According to the annual Halifax Unsecured Personal Loans review, it would seem that home improvements and cars are not the only motivating factors behind seeking finance.
In fact, 54 percent of last year’s unsecured personal loan applicants were looking to consolidate their existing debts. In many cases, money was transferred from more expensive accounts, such as store cards, in order to reduce the cost of borrowing.
In contrast, 2008 saw 15 percent of applicants taking out an unsecured personal loan as a means to facilitate internal and external home improvements. Furthermore, 23 percent of Halifax applicants took out an unsecured personal loan in order to purchase a new or used car. With 22 percent of this year’s loan applications being for the same reason, the research would appear to indicate a continuing trend.
In addition, Halifax has noted a trend in consumers investing in themselves by embarking upon training courses to enhance their skills. In the past 12 months, Halifax has received loan applications to fund altitude training, driving instructor courses and ski instructor courses for example. More unusual reasons for Halifax applicants requiring loans in the past year have included fine art, false teeth, cattle, a beach hut and a mobile disco.
Director of Loans at Halifax, Russell Galley, commented: "Our research shows that loans are taken out for a wide variety of reasons. Similar to the last annual review 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.”
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Homeowners who have used unsecured loans in the past to consolidate debt, and who still have several other balances with store cards, hire purchase agreements and other credit cards, and who are now left with multiple monthly repayments, may wish to consider taking out a secured loan to
consolidate these existing debts. This finance option would potentially leave the borrower with just one repayment each month. This new repayment could possibly lower monthly outgoings. However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
