Being in debt can be stressful, but the key to effectively managing it is to stay in control. If you can achieve that, then credit can be used to great effect, and happily the vast majority of borrowers appear to be confident in their ability to stay on top of their unsecured credit commitments.
According to the latest Lloyds Bank Lending Report, people are feeling overwhelmingly upbeat when it comes to the future of their finances, with confidence in paying off unsecured debt being particularly strong. In fact, 83% of those surveyed feel confident or very confident that they'll meet their future repayments, hinting that the vast majority won't be stuck in a cycle of unmanageable debt.
The figures also suggest that consumers are more confident in using credit to fund special occasions or non-essential items, as although the biggest reason for taking out a personal loan is to consolidate existing debts (27%), a further 26% used the money to purchase a car or bike and 20% used it for home improvements. Of those who wanted the money for a special occasion, 70% used it to pay for Christmas, while 46% borrowed to pay for someone's birthday.
"It's encouraging that, as confidence in consumer finances continues to grow, the majority of people feel in control of their current and future loan repayments," said Sam Clark, head of loans at Lloyds Bank. "This is enabling customers to enjoy those special occasions and provides the opportunity to restructure their future borrowing in a more cost-effective way."
If you're planning that important purchase, opting for a loan could be a great solution. But, what if you're not so confident in your ability to manage your money, or worse, what if you're already finding things difficult?
This is when getting in control can really pay dividends. Don't be tempted to stick your head in the sand – by being proactive and taking charge you can ensure things don't get too stressful. For example, if you've got a maxed out credit card, consider transferring the balance to a 0% interest deal to give you time to pay off the amount without interest making things harder.
Alternatively, if you've got several credit commitments to contend with, you may like to consolidate with a single personal loan. Doing so can make things a whole lot more manageable as you'll only have one monthly repayment to think about, and by the end of the set term, you'll be completely debt-free. So, whether you're confident in your repayment capabilities or need a bit of help, get in control and reap the rewards!
Compare balance transfer credit cards
Use our personal loan calculator to see what your repayments could be like
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.