29 Jan 2010

Hire purchase, personal loans rise in popularity

10:12 pm on 29 January 2010

More people are opting for personal loans and hire purchase rather than credit card borrowing, according to latest figures from credit bureau Veda Advantage.

The number of people applying for hire purchase agreements increased nearly 28% in December compared to the same period the previous year, while applications for personal loans went up by 119%.

In contrast, the number of people applying for a credit card fell 26%.

Veda Advantage managing director John Roberts says the figures show New Zealanders have responded to the economic downturn with a more conservative approach to their financial affairs.

Veda Advantage holds files on 97.5% of the credit-active population.

Budget advisers say using hire purchase to buy big ticket items is preferable to paying for them with a credit card.