Strong Month for Personal Loans
Sep 22, 2006
Consumers moved away from borrowing money on credit cards in July, new figures show, with more and more choosing loans to meet their credit needs.
Further information released from the British Bankers' Association showed that new borrowing on credit cards came to only £7,083 million in July, which is the lowest July figure since 2002.
Net lending on credit cards dropped by £348 million from June's figure, while new net lending on personal loans and overdrafts saw a boost of £655 million, compared to a recent monthly average rise of £404 million. However, this followed a slow June for loans, with net lending increasing by only £214 million.
Meanwhile, July saw a seven per cent drop in gross mortgage lending from June's record figure of £20.5 billion, while the number of mortgages approved was two per cent lower than in July 2005, although their value was eight per cent higher.
BBA director of statistics, David Dooks, said: "The drawdown of loans approved in previous months shows strong mortgage lending to have been approaching the peaks of 2004, ahead of the interest rate rise in early August."
Meanwhile, unsecured lending is displaying quite a different trend, with the growth rate continuing to decline, largely reflecting the on going contraction in credit card borrowing.
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