Latest figures from the Finance & Leasing Association (FLA) show that direct loans increased for the third consecutive month, with new business in January up 27% compared with January 2010.

Consumer credit lending in total rose by 5% in January, representing the first overall rise since August.

There was also growth in credit cards and the car finance market, of 3% and 16% respectively compared with January 2010.

However, High Street credit continued to fall as consumer confidence remains low, with store card spending shrinking by 18% and store instalment credit down by 11% compared with January 2010.

The slump in second charge mortgages continued there were £21 million of second mortgages in January, down 19% year-on-year.

Fiona Hoyle, FLA head of consumer finance, said: “In the last 12 months our members provided over £50 billion of consumer credit