- Thursday, 29 April 2010Borrowers have started using surplus cash to help with
debt management, reported the British Banking Association (BBA) on April 27th.
Repayments were up in March 2010 as banks actively encouraged people to pay off their debts, especially mortgage arrears, while new lending through personal loans declined.
The figures are in agreement with those published recently by Sainsbury's Finance, which revealed that the number of people taking out personal loans to be used for debt consolidation had decreased over the first quarter.
David Dooks, BBA statistics director, said: "Homeowners are reducing mortgage debt by making, or maintaining, higher repayments using the extra cash generated by lower mortgage rates."
He added that low interest rates were affecting consumer behaviour and that more people were keeping their cash in current accounts rather than building up a savings account.
Unsecured borrowing has come to a standstill, suggesting that less people will get into financial trouble and require a
debt management plan.
The report also showed that the number of house purchases being approved had grown by 20 per cent and retail sales had also increased with credit card transactions 1.3 per cent higher than a year ago.
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