Surge in personal loan requests as consumers consolidate their debts

UK consumer lender Fluro has today launched the first edition of its quarterly“Consumer Lending Newsflash”, examining current trends across UK consumer lending by analysing data from its market-leading technology stack.

The study reveals that the UK consumer lending market has experienced a spike in activity in January 2023, with Fluro’s data tracking the highest numbers of loans requested since the summer. The year began with just over a fifth more loans requested (21% increase) compared with the previous month. In total, 313,334 loans were requested throughout the UK in January.

The data – covering a range of demographics including age groups, geographical locations and salary brackets from across the UK, as well as the reasons behind loan requests – has been extrapolated from Fluro’s customer database and reflects the unique number of customers who have either been quoted for or submitted loans across the open market, including the major price comparison websites.

Examining the loans requested in January by demographic suggests that a shift is underway, as households with incomes of over £70,000 and older generations (aged 70 and over) flocked to request loans – with increases of 24% and 51% respectively.

Nearly a third of loan requests in January (28%) were for the purpose of debt consolidation. In total, 88,042 loans were requested for the purpose of debt consolidation in January – up from 74,142 in December. Other key reasons for the increase in loan requests last month included extra cash for home improvements (20%) and cars or other vehicles (27%).

Geographically, Wales has seen the most significant increase in loan requests (25%) compared with the previous month – followed by Northern Ireland and Scotland, which both saw increases of 24%. However, areas of the country that have a higher proportion of affluent households have also seen spikes: the South East and South West have seen a rise in loan requests of 16% and 19% respectively.

Nick Harding, Co-Founder & CEO, Fluro, said: “Our data suggests that people are looking at ways to take control of their finances and ease the squeeze on their wallets. Cost-of-living pressures are affecting everyone and causing even higher earners and ‘asset rich’ older generations to take stock of their financial position. They may not have had to make cuts to their expenditure, but they are nonetheless concerned about inflation and the impact of rising interest rates.

“For many, a priority is to ensure that any debts are simplified and structured as efficiently as possible, for example consolidating expense credit card debts. We expect this to be a continuing theme for the year, as higher earners come off rock bottom fixed-rate mortgages and look to find ways of alleviating the impact of this on their day-to-day finances.”