HSBC personal loans finds consumers still interested

Consumers are still interested in loans, with secured loans more popular than unsecured, HSBC's latest borrowing confidence index has shown.

"Households still seem willing to enquire about taking on new debt," said John Butler, HSBC's head of UK economics.

The report from HSBC follows four years of data that has allowed an initial estimate of seasonal adjustment to be made, which helps interpret short term changes in the index.

The most recent information shows that underlying activity in the final quarter of 2004 eased compared with the summer, but remained on a par with a year earlier, up 0.9 per cent.

Although secured lending saw an underlying fall between the third and fourth quarters, this fall followed an exceptionally buoyant summer.

As a result, mortgage and, especially, equity withdrawal demand in the three months to December remained well above the final quarter of 2003, up 2.3 per cent for the month of December.

Dennis Turner, head of the bank's business economics team, added: "The index continues to emphasise the dichotomy between secured and unsecured borrowing with customers preferring the attractions of secured borrowing over unsecured loans."