According to ender Welendus, 15% of short-term loan applications are being made to cover household bills. 42% of loan requests were to pay for surprise bills, Of the 35,000 loans peer-to-peer lender Welendus has received this year, 5,000 have been to meet the cost of regular bills.
The FCA-approved ethical lender has revealed that 2,400 of those loans were specifically to cover household utilities such as gas and electricity bills.
Some 42 percent of loan requests were to pay for surprise bills, highlighting the severe financial difficulties many people in the UK face as wages remain stagnant and living costs continue to rise.
The research showed that it wasn’t just low-income households making loan requests as 77 percent of applicants were in full-time employment. A significant percentage of these were also earning above the average UK salary.
The report says as the winter sets in, the lender says it expects to see more applications for loans to cover energy costs. All of the big six energy firms have announced at least one price hike this year, along with a number of smaller providers. It is estimated to save customers with a standard variable tariff an average of £70 per year at the current rate of £1,136. However, this is expected to be raised in April due to a spike in wholesale prices.
Nadeem Siam, founder and chief executive of Welendus, said “The majority of loan applications we receive come from those working full-time jobs with long hours. The current economic climate, combined with a high cost of living and near-constant commodity price hikes, has meant that even those working and on good salaries can be left without enough cash for scheduled bills.”
“A huge percentage of the UK population don’t have savings, and we aim to provide a simple and ethical resource for emergency cash flow problems.”
Source: P2P Finance News