Map reveals the UK loan hotspots where people borrow the most money

Searches for the term ‘I need a loan’ surged by 35% in the past three months, reflecting a
growing reliance on borrowing
to navigate financial challenges.

This is evidenced by the latest
Pepper Money lending study
, which found that more than half of Brits saw a drop in disposable income last year; and
higher bills
are hitting the nation’s pockets hardest.

As a result, a third of UK households have borrowed to pay for food or utilities, while 16% say their
debt has increased
‘a lot’ over the previous 12 months.

According to the lender’s data, the average loan taken out in 2024 sat at £41,088, with the most common reason given being debt consolidation (accounting for around half of the total) followed by home improvement (making up 9.7%).

Loans for property purchases or investment and those
to fund travel
or weddings are also becoming more common, as is medical-related borrowing to pay for private care.

However, it seems that residents in some cities were far more inclined to borrow than others.

Brummies were responsible for almost one in eight loans across the UK last year, with the average amount coming to £40,393.

Here, weddings were the most common reason for borrowing – a stark contrast to Sheffield (which accounted for the second-highest proportion with 10.5%) where it was medical bills.

Next up, Cardiff came in third with 9.5% of the country’s loans, and the top five was rounded off by Newcastle and Nottingham, which racked up 8.5% and 8.2% respectively.

Perhaps surprisingly, London didn’t make the top 10. But although the capital made up just 3.9% of 2024 loans, the ones that were taken out were the largest among the cities studied, averaging at a whopping £61,681.

Commenting on the findings, Ryan McGrath, sales director at
Pepper Money
, says: ‘We’re seeing more households in cities like Birmingham, Sheffield, and Cardiff using loans not just to consolidate debt, but also to invest in their homes and even fund major life events.

‘Rising costs mean people are looking for smarter ways to borrow, and secured loans are becoming a more popular option for homeowners who want to access larger sums at lower rates.

‘The key is ensuring that any loan, whether for home improvements, debt consolidation, or personal milestones, is the right fit for their financial situation by seeking financial advice.’

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