Secured loans have suffered a very sharp drop - but in-store credit is on the up.
Lending volumes continued to decline in March, a major industry association has shown.
Latest data from the Finance and Leasing Association (FLA) found that consumers were able to extend 12 percent less credit over the month, compared to March 2008 levels. This reduction is due to the global credit crunch, which has made banks and other lenders less willing to allow people seen as "high risk" to borrow money.
Further results from the report show that different borrowing methods have been disproportionately hit by the downturn. For example, secured loans - where extra credit is borrowed against equity in a property - are 76 percent down on the year, while credit cards suffered a fall of just three percent.
Elsewhere, unsecured loans declined by 37 percent - but in-store credit from retailers defied the downturn and rose by 24 percent.
Commenting on the research, Geraldine Kilkelly at the FLA, said: "Overall, consumer finance is still being hit by the downturn. With a depressed housing market many people are choosing to improve their homes and replace furnishings rather than move house. Retailers and lenders have been offering attractive interest-free credit and deferred payment deals on store instalment credit."
The FLA also said that overall lending over the 12 months to March 2009 stood at £58 billion. This is a decline of 13 percent from the year before.
