Secured loan business fell 11% in September, compared to the same period last year, show the latest figures from the Finance & Leasing Association.
Secured loan business amounted to just £24m in September.
Overall consumer credit business dropped 6% in September compared with the previous year.
The only sector of consumer finance to grow was dealer motor finance, which rose by 2%.
The high street has been hardest hit by the decline in consumer spending, with credit and store card spending having fallen by 8% and 22% respectively. Instalment credit spending fell by 23%.
Fiona Hoyle, head of consumer finance at the FLA, says: “The new figures show that consumers continue to take a cautious approach to spending, with a decline in the amount of credit granted almost across the board. But it’s important to remember that, in absolute terms, FLA members have lent £12.5 billion in the past three months, allowing consumers to make essential purchases.
“We have explained to MPs and to the government that any new regulation must be well-targeted or it risks entrenching the problem of shrinking markets and not inhibit the contribution of consumer spending to the economic recovery.”