A third of loan searches carried out through Experian’s comparison services are for debt consolidation loans, new analysis has revealed. These type of loans can help consumers with outstanding debts from various lenders to roll their monthly payments into one to reduce their costs and to take more control over their finances.
On average, shoppers are looking to borrow £11,000 over five years. Typically, these consumers are 37 years old and have an average Experian Credit Score of 749. This score is in the “good” band category and indicates that while these consumers have taken on debts through their 30s, they have been able to meet their monthly repayments and sustain a healthy credit history.
Meanwhile, analysis of the type of mortgages potential buyers are looking for shows a jump in consumers shopping for fixed-term deals. A third (33%) of searches carried out in July were for fixed-term deals, up from 27% in June and 24% in May.
The trend suggests that potential homeowners have been looking to tie themselves in to a fixed deal to protect themselves from an increase in interest rates and mortgage payments, with the Bank of England recently raising interest rates to 0.75 %.
Amir Goshtai, Managing Director, Experian Marketplace & Affinity, said “The latest look at our data reveals that even consumers who are able to service their various debts are looking to take even more control and roll their monthly payments into one to reduce their costs. The rise in those looking at fixed-term mortgages indicates people have been reacting to the speculation of a potential rate rise. If and when there are further rises is yet to be seen, but in the meantime, a priority for homeowners should be to take some simple steps to plan ahead.”