The rise of the personal loan
Around 750,000 consumers wanted to borrow more than their annual salary in 2016, according to a new study from Moneysupermarket.com.
The price comparison site analysed three million loan enquiries made between January 2015 and March 2017 to reveal how much Brits wanted to borrow and what they planned to spend it on.
In 2016, Brits wanted to borrow a total of £12.4bn through personal loans, an average of £8,765 per person.
The study found 75,000 consumers enquiring about loans wanted to borrow more than they earned in 12 months. On average, this group requested 140 percent of their annual salary.
However, Moneysupermarket.com said the typical person enquiring about a loan wants to borrow the equivalent of 36 percent of their annual income.
Whilst one in four people would like to borrow the equivalent of at least 50 percent of their yearly salary.
Research found that the reasons Brits wanted to borrow, with the biggest increase between 2015 and 2017, was to fund weddings.
Wedding loans have increased by around nine percent with the average a consumer wants to borrow at £7,600.
The second highest increase, in the reason for borrowing, is for car loans. The amount a Brit wants to borrow for a car loan has increased by £581 between 2015 and 2017 – an average of £9,390 per loan.