Survey highlights growing number of 'bridging borrowers' in UK to help make ends meet
1st December 2023 13:35 - Financial Services
Survey highlights growing number of 'bridging borrowers' in UK to help make ends meet: A survey of UK borrowers has revealed a growing number of people using credit to cover essential spending, with one in four reporting turning to credit cards and overdrafts to make ends meet, 23% turning to instalment or delayed payment options, and 16% reporting taking out a loan to navigate life in the current climate.
The survey by Tink polled 1,000 borrowers, with three in 10 reporting by the end of each month they are running out of money (29%).
The research was conducted as people in the UK are facing the highest interest rates for 15 years and escalating costs in all areas of life.
The survey also spoke to 200 lenders who have a decision-making role in the lending process. It found that in the current climate where some borrowers are falsifying loan applications to secure funding, 82% believe that affordability checks are increasingly essential, with more than three-quarters saying they need to upgrade their methods of assessment (77%).
Lenders were asked about their current situation, with 47% reporting they have upgraded to data-driven affordability checks to analyse how a loan will fit into the consumer's budget, and a further 42% saying they are 'currently upgrading' to this.
More than two-fifths said they have upgraded to digital income checks based on the applicant's bank transactions data (43%), with 42% in the process of upgrading, and half have upgraded their anti-fraud checks, with 39% in the process of doing so.
Other areas lenders said they have upgraded is the ability to access enhanced insights on an applicant’s risk exposure (40%, with a further 44% 'currently upgrading') and enhanced tools that allow them to see expenditure such as BNPL, rent and credit cards not reflected in credit checks (44% already upgraded with a further 40% in the process).
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