It can sometimes be difficult to stay on top of borrowing commitments, but happily, research from Lloyds Bank has revealed that a growing number of people are managing – which is even better news given that we're in the run up to Christmas.
The figures reveal that confidence in being able to pay off loans remains high, with 84% of respondents saying that they're either confident or very confident that they'll be able to meet their future repayments. Household income remains the most common source to make those repayments, with 85% citing this as their key payment method, up from 82% three months ago.
This not only suggests that household income continues to improve, but that people are committed to repaying debt responsibly, rather than needing to use savings or other forms of credit to make the necessary payments. This level of responsibility is further highlighted in the finding that the top reason for taking out a personal loan is to consolidate debt (30%), a highly sensible choice given that having all debts in one place can make them far easier to manage – and in some cases can even reduce monthly repayments.
But, one of the most promising findings of all is that 69% of respondents aren't planning on taking out any extra borrowing in the next six months, which means many people will be able to cover the cost of Christmas without getting into additional debt.
"We are continuing to see encouraging signs as more people can better manage their borrowing repayments," said Sam Clark, head of Loans at Lloyds Bank. "With an increase in consumers using household income to pay off existing credit, allied to the significant percentage of people saying they will not need to borrow more in the next six months, this paints a positive picture for consumer finances as we look ahead to the Christmas period."
While it's great news that the majority of people feel confident in being able to make repayments, there are still some that aren't quite so optimistic. If you're starting to buckle under the pressure, consider consolidating to a single low-cost loan – use our loan calculator to see what your repayments could be like – or switch your credit card debt to a 0% balance transfer credit card to reduce your interest responsibilities.
Alternatively, if you're at the other end of the scale and are completely confident in being able to make repayments, why not pay off a bit more each month? This may not be possible with a loan but it certainly will be with credit cards, and the sooner you pay everything off, the sooner you'll be in total control of your finances.
Use our loan calculator
Compare 0% balance transfer credit cards
Remember, in order to secure a mortgage, credit card or personal loan you need to have a good credit rating. To find out if yours has a clean bill of health, contact a credit check provider, such as Experian CreditExpert to investigate your credit report.
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.
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