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Debt consolidation on the rise

Debt consolidation on the rise

Category: Loans

Updated: 14/12/2012
First Published: 14/02/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Britons are said to be increasingly taking control of their finances after research showed a rise in the number of loans taken out to consolidate debts.

Sainsbury's Loans estimates that almost one in three (30%) personal loans taken out in the first quarter of the year will be at least in part to consolidate other borrowings.

According to the supermarket bank, this equates to around 157,000 personal loans worth a combined £1.5 billion.

The findings also suggest that the average size of debt consolidation loan is around £9,800.

Also that households continue to keep a close watch on their budgets and monthly outgoings has been applauded.

However, Sainsbury's Loans reminded anyone looking to consolidate credit to ensure they shop around for a competitive rate.

In addition, people have been reminded to look out for the rewards that many personal loans offer, as it could make a big difference to their total repayment.

"For those who perhaps have balances on credit cards where they are no longer benefiting from an introductory offer or are paying a high interest rate on one or more store cards, consolidating the debt could make a big difference by making it easier to budget monthly outgoings," said Steven Baillie, head of Sainsbury's Loans.

"Anyone considering taking out a personal loan for this purpose should make sure they shop around and find the most competitive rate or reward package, depending on their own individual requirements.

"Doing this could save considerable amounts on the total amount that you pay back."

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