Credit Action: Unsecured lending is rising again

Many people are choosing loans to bolster their coffers.

A number of Britons are choosing to boost their current accounts by taking out loans, it has been claimed.

Liz Dunscombe, director of project and partnership development at Credit Action, explains this is a result of the squeeze in household budgets.

Gas and electricity prices are rising, as well as the cost of food and other necessities, which has left many people lacking the funds to cover such costs.

This has meant unsecured lending has increased during recent months and the annual growth rate now stands at 2.3 per cent, Ms Dunscombe notes.

She says: "The key to tackling debt is always to produce a realistic and sustainable budget that takes into account the cost of all priority bills."

Her comments follow calls from prime minister David Cameron at the Conservative party conference for people to continue paying off their debts.

Ms Dunscombe says mortgages or rent, council tax, food, clothing and travel expenses must all be considered when trying to draft a household budget.

By Nate Sawyer