Loan borrowing has dropped by 30 percent in a year according to the report.
UK consumers have decisively turned away from taking out unsecured loans, Finance and Leasing Association (FLA) figures have indicated.
According to the data, total finance provided to UK consumers over February 2008-February 2009 came to £58.2 billion. This is a fall of 12 percent from the previous 12 months.
Included in this total, however, was a 30 percent fall in unsecured loans. By contrast, credit card borrowing endured a far smaller fall of just three percent - and store instalment credit rose by eight percent.The FLA's own analysis of the figures indicates that a "reluctance" to lock themselves into "longer-term" repayment schedules due to increasing financial insecurity could be a decisive factor behind the falling interest levels among consumers. The findings come against a background of rising unemployment, with the jobless total rising to a 12-year high of 2.1 million people on latest official figures.
Geraldine Kilkelly, head of research and chief economist at the FLA, added: "Rising unemployment and low consumer confidence have led to a further drop in unsecured loan new business in the last two months. Our figures show that FLA members have written £660 million-worth of new unsecured loan business in the first two months of 2009, compared with £1.1 billion in the same period last year."
The FLA is the industry association for asset finance, consumer finance and motor finance providers.
