Banks winning out in loans battle

MIDLANDERS are shunning high-cost credit in favour of conventional bank loans or choosing not to borrow at all, according to a survey by insolvency trade body R3.

The research revealed that 37 per cent of West Midlanders said the bank would be the first port of call to borrow money, followed by parents, grandparents and other family.

The survey also highlighted that people in the West Midlands only begin to worry when their debt levels exceed around £2,400, excluding mortgages and student loans. This is slightly lower than the national figure for the UK which is around £3,000.

R3 Midlands chairman Matthew Hammond, a partner at PwC in the Midlands, said: “It is encouraging to see that people are starting to source more sensible forms of credit and are avoiding options with cripplingly high interest rates.

“With unemployment levels rising, any amount of debt could have a serious impact on personal finances.”