Debt consolidation loans ‘now commonplace’
Debt consolidation has become commonplace as people take a greater interest in their finances, it was claimed today.
Figures from Sainsbury's Bank show that restructuring existing debts is now the most popular reason for its customers taking out personal loans, ahead of vehicle purchases and home improvement projects.
Steve Baillie, the bank's head of loans, said that an increasing number of people are looking in detail at their credit commitments and deciding that debt consolidation can help them.
However, Mr Baillie warned that consolidating debts will only help a borrower's financial position if they act sensibly after taking out the loan.
"If you are going down the consolidation route you have to be strict with yourself so that you're not just deferring the problem for future months and years," he explained.
Statistics published by the money education charity Credit Action show that among households with some form of unsecured loan the average level of debt is £20,600.
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