A Deep Dive Into The Uk’s Loan Landscape And Borrowing Trends

Are you curious to know if borrowers like you are in the minority in the UK? The answer to this will be ‘no’ as the need for loans is unavoidable for thousands of people residing there. With inflation not matching up to what you earn and save, loan assistance becomes inevitable at different points in time.

Let’s not give you a theoretical explanation of the number of borrowers who are seeking financial help. Instead, a practical analysis with some statistics can help you to understand the ongoing scenario. Payday loans are one of the few loans that witness widespread popularity.

These loans are short-term in nature and are a common choice between the age group of 18 and 44 years. With increasing age, the likelihood of opting for these loans decreases. Thus, you will see a drop in the popularity of these loans among people between the ages of 55 and 64 years.

Reportedly, more than 5 million people in the UK have taken out these loans in 2022, which is 0.7% less than the number of borrowers in 2020. You will be shocked to know how men are more prone to consider this financing option as compared to women.

If you closely analyse the reason for this dependency on these loans, you can find out the actual cause. It is the inability to meet the regular expenses that occur in day-to-day life. The prices of the daily necessary items increase with time when your salary is still constant.

Keep exploring this blog to understand the loan craze in the UK.

Revealing surprising statistics on the borrowers

Borrowing is no longer seen as a risky decision, given the number of choices available to you. Besides, you have the advantage of getting valuable options from a direct lender. It makes borrowing more convenient and hassle-free even when you are picking options like loans for bad credit from a direct lender.

These loans are obtainable as short-term funding options, and your affordability will play a key role. There are a few aspects of the personal loan market that should grab your attention.

Expected growth in the personal loan market8%
Expected rise in interest rates82%
Estimated percentage of borrowers17%

No hard and fast rules are defined when borrowing is mandatory and when it is not. It will depend on individual circumstances, which differ from person to person. It does not even matter if you have poor or good credit scores.

The demand for loans is persistent and it can get better with time.

· Mortgage lending

The FCA and Prudential Regulatory Authority regulate mortgage lenders. Their findings reveal that the number of outstanding residential mortgage loans has decreased by 0.1% from the previous quarter.

It also shows how there is a slight lowering in demand for mortgages from the previous year. However, there is a hike in demand after the first quarter. New requests for mortgages are not quite appealing to see, as the demand has dropped to 16.5% as compared to the previous quarter.

Therefore, the pending payment issues have lowered, but the requests for new mortgages are quite few. The reason for this might be the rising cost of mortgages, making borrowing unaffordable.

In addition, re-mortgaging opportunities do not seem to be too great, given its decline from August to September by 4,500. The increase in the rate of interest for new mortgages was around 5.01% in September.

· Student loans

Affording study expenses is a big deal when you have to depend on loans. The high cost of education imparted by various Universities is majorly responsible for this, and you cannot do anything about it. If you have to stay away from home for higher studies, maintaining the living cost will be an additional payout for you.

However, there are different provisions available from the Government that facilitate financial assistance. The best thing is that you can avail them of at low-interest rates. Students who want to pursue undergraduate full-time programs will most probably consider having loans for three years, like the duration of the course.

According to some predictions, the Government might subsidise 28% of student loans given out in the academic year of 2022-23. Moreover, the percentage of borrowers looking for these loans might increase in the coming years.

Out of the £ 20.1 billion loans offered in this academic year, it combines percentages of full-time undergraduate loans, post-graduate loans, part-time and even advanced learning loans.

· Car Financing

The steady increase in living costs cannot be avoided. It has already taken a toll on your finances, and thinking of a car might seem like a far cry. This makes borrowers apprehensive about buying cars that are an ultimate luxury.

Apart from this, the ever-increasing price of cars is an added problem to this crisis for sure. Besides, the number of people looking forward to upgrading their cars is also becoming low. This is because they now prefer keeping the old one, fearing the sudden upsurge of additional costs.

Therefore, low demand for cars has affected the process of new finance agreements. When people do not feel like purchasing a car, they will automatically give up the idea of getting a car finance. Although the car finance market will grow in the near future, it has to go through an estimated downfall of 4% before the rise.

Do not forget one vital point about this financing option: It is that this arrangement still fits the bill perfectly for someone unwilling to spend outright money for car purchase purposes.

The bottom line

You might consider asking a direct lender like Loansforever for financial assistance to beat the heat of increasing borrowing costs. If you are looking forward to getting a small amount of loan to overcome a cash crunch, this is indeed the most economical way.

You can weigh different options at the same time by collecting loan proposals from different lenders. This is the most significant benefit of getting a loan from a private lender. However, you should always shop around for the best offers that might come from a traditional loan provider, depending on your ongoing financial situation.

Roscoe Tanner is the Editor-in-Chief, leading a large team of writers at LoansForever. He has expertise in writing for various borrowing options like personal loans, long-term and short-term loans, unemployed loans and many more. Roscoe joined LoansForever in 2015 but previously worked with many reputed loan companies. He performs the major role as the editor, covering key aspects of loans and finance. Roscoe Tanner wants to serve at large in the progress of the company and to present a modern alternative to the traditional financial industry in the UK. He is a Certified Financial Planner and has a god-gift of connecting with people through his valuable suggestions and writings. His expertise as a writer and editor in the finance industry is based on his education qualification. Roscoe has done a Master of Business Administration (MBA) in Finance.

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