Consumer borrowing fell by 7% in March as people scaled back spending and remained wary of increasing their debt burden, new figures show.
The Finance & Leasing Association said unsecured lending and second charge mortgages dropped 7% year-on-year to £4.84 billion.
Fewer people were taking out unsecured loans, with the total amount falling 15% to £182 million during the month. There was also a 11% slide in second charge mortgages or loans secured by people on their homes.
As consumers struggle with soaring cost of living and economic uncertainties, spending and borrowing is being cut back.
Credit card loans remained the biggest area of lending, although the total amount borrowed fell 8% to £2.53 billion, while spending on store cards was down 21%.
A surprise 28% drop was recorded in store instalment credit, which allows people to take home items such as electrical goods and furniture and pay for them later. Loans of this nature had shown more resilience previously, even during the economic downturn.