Credit, Collections & Insolvency News
The biggest loans taken out by UK adults are for car payments according to new research by GoCompare.
Analysing data on loans secured since September 2022, the study found that motorists took out an average loan of more than £10,700 to put towards their new vehicles. This highlights that buying a car remains one of the biggest purchases customers make in their lifetime.
The research also found that around one in ten (11%) loans went towards a car payment during this time, and was the largest loan type in 2023 and 2024. Often used instead buying from a dealer on finance, loans help drivers with the upfront cost of a new car and make repayments more manageable.
The study by the comparison site found that, in 2024, the average loan amount for all purposes reached £7,473.64. This represents a drop of around £750 from the year prior, when borrowing averaged £8,224.06 per loan.
From September 2022 to December 2024, the most common reason UK adults borrowed money was for debt consolidation, in total. Around one-quarter (27%) of loans during this time were to consolidate debts, and amounted to an average loan of £8,751.98 per person.
The third-most expensive personal loans were for home improvements – reaching just over £8,600 per person on average. Around one-quarter (27%) of loans secured were for property projects, while 28% were attributed to other reasons.
Meanwhile, Brits have taken out loans of £7,211.62 on average to pay for weddings since September 2022, making up 3% of all loans during this period. A similar number (4%) were used for holidays, with travellers borrowing an average of £3,443.
Matt Sanders, Loans Expert at Go.Compare, said “Drivers might choose to take out a loan to make it easier to buy a new car. Rather than having to pay the total amount upfront, they can secure a loan with manageable repayments. Comparing personal loan rates using price comparison sites is always good practice. You may find better interest rates than those available from car dealerships.”
|
Loan usage type |
Average loan amount |
|
Car |
£10,717.90 |
|
Debt consolidation |
£8,751.98 |
|
Home improvements |
£8,602.72 |
|
Wedding |
£7,211.62 |
|
Other |
£6,065.58 |
|
Holiday |
£3,443.00 |
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