Almost two in five people who take out a personal loan do so in order to buy a new vehicle, according to new research by Alliance & Leicester.

In fact, a vehicle purchase is the most popular reason for taking out a personal loan in the UK, with debt consolidation rated as the second most popular, the latest figures demonstrate.

The research also finds that spending habits differ within the various parts of the UK , with Scots the most likely to use a personal loan for home improvements and those in the north-west of England the most tempted to spend their loan money on a trip of a life-time.

Richard Al-Dabbagh, Alliance & Leicester senior personal loans manager, said: "It seems that a lot of people are using a personal loan to buy a car, with 37 per cent of our borrowers taking out a personal loan specifically for that reason.

"This isn't too surprising as the finance deals offered at most car showrooms do not compete with our rates."

Figures from Sainsbury's Bank recently suggested that millions of Britons are afraid to address the state of their personal finances.

Source:-qck.com