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13 August 2007
Personal loans have always been popular amongst consumers in the UK, and these loans are available to use for a variety of purposes.
According to recent research carried out by the Alliance and Leicester, there are three main reasons why consumers in the UK are taking out personal loans.
The report provides a breakdown of how most borrowers were using their personal loans, giving an insight into the main reasons for taking on this type of finance.
According to the report the main reason for taking in a personal loan is for a vehicle. In response to a survey forty percent of respondents stated that they took out personal loans to finance a new vehicle, making this the most popular reason for taking out a personal loan.
Twenty five percent had purchased a used vehicle with their personal loan, another twelve percent purchased a new vehicle with their loan, and three percent paid for caravans or motorbikes with their personal loans.
The second most popular reason for taking out a personal loan was to consolidate debts. Thirty four percent stated that they had taken out a personal loan in order to pay off smaller, more expensive debts and enjoy easier financial management and lower monthly outgoings.
The third most popular reason for taking out a personal loan was to carry out home improvements, with a further twenty percent of borrowers taking out these loans in order to improve their homes and also to add value to their properties.
The research also showed that in Northern Ireland personal loans are popular for financing a dream wedding as well as for funding a luxury holiday of a lifetime. The report showed that personal loans for home improvements were most popular in Scotland, with twenty three percent of Scots taking out these loans to improve their homes. London and the South East saw a larger proportion of borrowers using their personal loans to consolidate debts.
Consumers across the UK have been able to get some good deals on personal loans over recent years, and many are taking full advantage of this by taking out these loans to finance the things that they want without having to find the money upfront.
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