31 January 2008
Many borrowers feel so ashamed of taking out unsecured funds that they hide it from friends and family, provider Abbey said yesterday.
A total of £7.7 billion is borrowed in secret each year - with 56% of the 1.3 million consumers in question taking out the funds in order to pay off their debts.
Included in the remaining secret personal loan holders is the 15% who use the cash for home improvements, the 7% who use it to fund medical care and the 2% who go under the knife for some cosmetic surgery.
Director of Abbey Loans Paul Morrish commented: "Borrowing in secret - especially large amounts - is not advisable and we would encourage people to be open and honest about their finances.
"Talking about your financial situation with others can help so that you can be realistic about what is affordable - however, for those who are comfortable they can afford repayments, it's worth doing some research to find the most appropriate deal for you."
A slim majority (54%) of the secret loans were for less than £3,000 - although their mean value came to a slightly less manageable £5,720.
Personal loans are not recommended as a solution to long-term debts, as they tend to carry high interest rates.
Sometimes a personal loan is a good choice, perhaps you want to consolidate your credit cards or buy a new car. Whatever your needs, let uSwitch.com help you find one to suit. We're impartial and comprehensive and won't charge you for using our service. Compare personal loans and apply online.
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