According to a study of loan applications placed by the company, debt consolidation is the most common reason for someone to take out a loan.
Almost 48% of those surveyed cited this as their reason for applying. Home improvement (21.8%) and car loans (19%) were also found to be common reasons, whereas ‘luxury’ expenditures such as holidays (2.3%) and weddings (1.8%) were largely in the minority.
Nicola Winter, managing director at Freedom Finance, says:
“The results of the survey seem to reflect the tough economic situation in which many consumers find themselves at present. Seemingly many loan applicants feel that they need to consolidate existing debts illustrating changes in their own circumstances.
"Many people are losing jobs or struggling with mortgages and household expenses and consumer credit is now difficult to secure. Borrowers are therefore turning are seeking alternative solutions via comparison sites such as Freedom Finance in order to find the best deals on loans.
“It is also interesting that people are looking to make improvements to their homes at the expense of other luxuries, most probably to be well-positioned for when the housing market recovers.
"Whatever the reason consumers apply for a loan, it’s vital that when shopping around the information they find is prompt, transparent and accurate, in order for them to make well-informed decisions about their capacity to borrow.
"Our site is the only loan comparison tool where you can compare actual not typical or representative loan rates for personal, unsecured and secured loans without damaging your credit score something that is all important in the tough economic climate.”
