Loans 'a source of embarrassment for some Brits' - 30/01/2008

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Loans are a source of shame for some Britons, a new study suggests.

Research from Abbey Loans indicates that 1.3 million people in the UK have taken out a loan without informing their partners and family, with 56 per cent of this proportion citing embarrassment as the reason for their failure to disclose the move.

Claiming that the combined value of 'secret loans' in Britain is £7.7 billion, the bank advises against borrowing large amounts of money without telling loved ones.

Director of Abbey Loans Paul Morrish comments: "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."

He adds that shopping around is an indispensable method of minimising the cost of borrowing funds.

Some 29 per cent of respondents claimed their loan was for a private part of their life and six per cent took it out to fund a surprise for their nearest and dearest.

While 56 per cent of people borrowed money in secret to pay off existing debts, 15 per cent did so to fund home improvements and seven per cent used the money for medical reasons.

The Bank of England cut the interest rate by 0.25 per cent in December 2007 and voted to maintain the base rate in January 2008.

© Adfero

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