Customers Turn to Loans as Crunch Continues

Increasing numbers of people are turning to "doorstep loans" in order to make ends meet, due to the financial pressure caused by the credit crunch.

New research from Equifax, carried out on behalf of ITV News, shows that around one third of people (31 per cent) who are currently worried about their credit rating have taken out an unsecured loan. This form of credit can charge high repayment rates, which customers can find difficult to meet.

Commenting on the study, external affairs director for Equifax Neil Munroe said: "Whilst the Bank of England has kept interest rates at five per cent, many lenders are still being cautious and not passing better [loan] rates onto their customers.

"This appears to be affecting both existing and new borrowers. Combined with rising food and oil prices which are also taking their toll on family finances it’s not surprising that our survey shows that consumers are looking at ways to tighten their belts."

Elsewhere, the Equifax poll also found that 24 per cent of people have reduced their life insurance payments, and a further 29 per cent have cut back on their pension donations, due to the financial effects of the ongoing credit crisis.