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Banks 'open to consolidation' for unsecured debt

Banks 'open to consolidation' for unsecured debt

Category: Loans

Updated: 29/01/2009
First Published: 28/01/2009

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Those facing mounting problems as a result of debt through unsecured loans and credit cards are likely to find that banks are more willing to consider accepting consolidation, it has been noted.

The UK insolvency helpline has suggested that the difficult economic climate has prompted a change in attitude among financial institutions.

While debt consolidation was undesirable for many before the downturn, lenders are now willing to help borrowers, said Ian Boden-Smyth, money advice co-ordinator at the body.

He explained: "[Banks] are now more interested in getting cash in and entering into negotiations with debtors rather than using aggressive or threatening tactics to make collections."

Last week Sainsbury's Finance suggested that consumers seeking to consolidate unsecured loans, credit cards and store cards would borrow up to £2.93 million for this purpose in the first quarter of 2009.

It estimated that the total number of consolidation loans taken out in that period could be as high as 250,000.

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