Borrowing on personal loans and overdrafts dropped in August as the credit crunch meant consumers were more prudent with their money, according to new figures.
Consumers borrowed £300 million less in August through personal loans, while credit card borrowing fell by £100 million as debt consolidation became more of an issue in the troubled financial markets, the British Bankers` Association (BBA) found.
The turbulent markets hit mortgage growth too, with gross mortgage lending growing by one per cent to £21 billion for the month. In August, there were 168,291 mortgages approved, a figure that was 8.8 per cent lower than August 2006.
David Dooks, BBA director of statistics, said: "The long-term net repayment of card debt continued, while borrowing through loans and overdrafts also fell in August, giving a subdued picture of consumer credit again."
According to Credit Action, the average consumer debt via credit cards, overdrafts and unsecured personal loans was £4,515 at the end of July 2007.
