New consumer lending grew by 14pc in August
New consumer lending grew by 14 per cent in August 2022 compared with August 2021, with both credit card and personal loan providers reporting increases.
According to a new analysis by digital lending marketplace Freedom Finance, the rise of new business means that consumer lenders will need to be “responsible and proactive” in the months ahead.
Freedom Finance found that in the first eight months of 2022, new consumer lending business was 21 per cent higher than it was during the same period of 2021.
Michael Davidson, chief revenue officer at Freedom Finance, said that these figures show how important it is to search for credit using best practice.
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“It is of vital importance that borrowers are doing all the right things when they shop for credit so that they can achieve the best possible outcomes,” said Davidson.
“As a very first step, shopping around is a must for credit hunters to get the best rates and most appropriate products for their needs.
“Digital marketplaces help consumers access a wide range of products and a variety of well-trusted brands and lenders. Marketplaces also use soft-search technology so consumers are only offered loans or credit cards that they know they will be eligible for.”
He added that this technology is vital because it can help borrowers get more tailored deals for their circumstances, and avoid declined applications.
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“Debt consolidation will be another major theme of the current economic cycle,” said Davidson.
“It is a good way for people to convert multiple debts into a single monthly payment to make it easier to track while possibly accessing a preferential rate. There is also the option to widen the repayment term – this may make immediate payments more manageable but can mean people pay more interest in total.
“A responsible and proactive lending industry will have a huge role to play over the coming economic cycle to support consumers and help them navigate increasingly choppy waters.”
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