Vehicles top reason for cheap personal loans
Buying cars, bikes and caravans are the top reasons for people taking out cheap personal loans.
According to figures from Alliance & Leicester almost two personal loans in five (37 per cent) are taken out to help someone buy a vehicle.
"It seems that a lot of people are using a personal loan to buy a car, with 37 per cent of our borrowers taking out a personal loan specifically for that reason," said Richard Al-Dabbagh, Alliance & Leicester senior personal loans manager.
"This isn't too surprising as the finance deals offered at most car showrooms do not compete with our rates."
He pointed out while typical forecourt finance charges up to 20 per cent interest, cheap personal loans are available from around six per cent.
"A little more surprising, perhaps, is that a small but growing number of people are getting a personal loan to purchase a caravan," Mr Al-Dabbagh added.
"These might be an eco-minded few, but it seems an increasing number of people are turning their backs on airport queues, train delays and other negative holiday certainties."
After taking out personal loans to buy vehicles, the second-biggest reason to borrow money was to consolidate debts (34 per cent), while one loan in five (20 per cent) was taken out to fund home improvements.
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