Consumers move to consolidate debt
Consumers are increasingly seeking to consolidate their debt, according to the latest analysis from Freedom Finance.
41 per cent of the people who searched for a loan via the embedded finance platform in April were seeking to consolidate their debt. Freedom Finance believes that this is due to rising interest rates on overdrafts and credit cards.
The platform’s latest credit monitor revealed that credit card rates are now at their highest level since December 1997.
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Debt consolidation was the most common reason for consumers seeking loans last month, while 25 per cent of people were seeking out loans for home improvements.
Freedom Finance has also reported that 50 per cent more people are looking for loan products on its platform, reflecting the growing demand for personal lending solutions.
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“We have seen a clear shift in the market of the past few months where all types of borrowers are moving toward using personal loans to pay off other more expensive forms of debt, such as credit cards and overdrafts,” said Andrew Fisher, chief growth officer at Freedom Finance.
“The changing conditions as rates have risen have also seen people look to borrow in new ways. We are seeing more people and different demographics coming onto our platform to look for the most appropriate credit products available to them.”
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