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Consumers Feel Confident About Paying Off Debt

Consumers Feel Confident About Paying Off Debt

Confidence levels in paying off unsecured debt remain high, with four in five (83%) of those surveyed feeling confident or very confident that they will meet their future repayments, according to a recent report from Lloyds Bank.

The report found that there has been a rise amongst those who are able to keep up with their current debt repayments, with numbers reaching 84% in quarter 2 compared to 81% in the first three months of the year. Fewer people have missed payments compared to the beginning of the year, with only one in ten (11%) saying that they had missed at least one payment in the last 12 months, compared to 13% in the first quarter of the year.

The top reasons people gave for taking out a personal loan include consolidating debts so that they are all in one place (31%), and purchasing a car or bike (28%). However, the number of people taking out unsecured borrowing to make home improvements fell by five percentage points to 15%.

Of those who used lending to fund a special occasion, almost half (45%) took out a loan to fund someone else’s birthday. While the overall number of those who took out a loan to fund an anniversary (15%) remains static, the report revealed evidence of a gender split, with 19% of men planning to use a loan to fund an anniversary, whereas only 11% of women are planning to do the same.

“We are starting to see encouraging signs as more people can better manage their loan repayments,” commented Sam Clark, Head of Loans at Lloyds Bank. “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,” he added.

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