According to the study, almost one in three people (30%) have outstanding debts amounting to over £5,000 with 10% saying their unsecured borrowing is more than £15,000.
The research also revealed that 44% of those who had used buy now pay later borrowing said their amount of debt through these services has increased in the last 12 months.
According to the report, due to the rising levels of unsecured borrowing, 42% felt their levels of outstanding debts could negatively impact their mortgage aspirations.
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Ryan Brailsford, director of business development at Pepper Money, said:
“There are many factors that could see a mortgage application declined by a high street lender only to be approved by a specialist lender, who have expertise in underwriting more complex cases.
Missed payments can see applications turned down, and this year’s Specialist Lending Study found that 8.38 million people have experienced adverse credit in the last three years.
“Outstanding unsecured debt is another reason why a customer’s circumstances could be considered ‘just-off-high-street’ as many lenders will impose a limit on the debt-to-income ratio.”
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