Consolidation ‘a sensible solution’
Consolidation loans are a sensible solution for consumers who want to sort out their debt problems, a personal finance expert has said.
Figures compiled by the money education charity Credit Action show that British adults have an average of £4,554 in unsecured consumer borrowing, such as loans, credit cards and overdrafts.
Debt consolidation has now emerged as the number one reason for a consumer to apply for a personal loan and Steve Baillie of Sainsbury's Bank believes this is a positive sign.
Used correctly such loans can be a good way for a borrower to get a grip of their spending and credit commitments, he explained.
However, while the decision to restructure debt is often a positive one, it is usually triggered by the desire to fund a major purchase, such as a car or home improvement project, admitted Mr Baillie.
"There is something that happens that actually drives them to do that. When people are buying something they sort out credit cards at the same time - it's an opportunity for them to review their position," he explained.
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