Debt consolidation ‘popular in January’
The number of people looking for a debt consolidation loan is likely to soar in January, according to a credit expert.
A recent report by Lloyds TSB suggested that poor household budgeting will see Britons overspend by a total of £4.7 billion this Christmas.
Neil Munroe of credit reference agency Equifax said many people will have to borrow money to fund their family Christmas and then look for a solution to any financial problems in the new year.
"There's a common trend that people do borrow short-term over Christmas and try to consolidate that in the new year, so there's always an increase in loan applications and mortgage applications," he explained.
However, Mr Munroe warned that some people who intend to adopt that strategy could end up disappointed, particularly if they have a low credit score.
Most banks have tightened their lending criteria in recent times and people who need an adverse credit loan are likely to find them difficult to come by, he added.
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