Figures from Alliance & Leicester show that 34 per cent of people opting to take on a personal loan do so in an effort to find a debt solution, often after having been hit by high interest rates on credit or store cards.
The latest research by the financial services firm also shows that many UK consumers cannot afford to pay for a car upfront and instead opt to use a personal loan to buy a new 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 senior personal loans manager at Alliance & Leicester.
“This isn’t too surprising as the finance deals offered at most car showrooms do not compete with our rates,” he added.
In February of this year, MoneyExpert research found that one in seven adult Brits had taken out a debt consolidation loan at some point during the previous three years.