Debtors advised to act now
Borrowers who could benefit from a debt consolidation loan were today urged to act as soon as possible.
A study by price comparison service uSwitch.com found that Britons could reduce the amount of interest they pay by a total of £15 billion a year if households opted to consolidate their unsecured debts into a single personal loan.
The report suggested the average household following this strategy could save up to £605 in interest payments over three years, as well as benefiting from easier financial planning because they would have just one fixed monthly payment to consider.
However, Mike Naylor, the website's personal finance expert, warned that consolidating debt is becoming more difficult as many lenders are adopting more risk-averse policies about who they will give credit to.
"Anyone with multiple debts and a poor credit history could be vulnerable to the impact of the credit crunch and should seriously consider consolidation while the option is still available," he advised.
A recent study by another personal finance website, Moneyfacts.co.uk, found that ten per cent of lenders withdrew from the unsecured personal loan market during November.
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