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Quarter of Brits opt for consolidation loans

More than a quarter of Britons have taken out a loan to consolidate some, or all, of their existing borrowing, it has been revealed.

The research, commissioned by the price comparison website Moneysupermarket, showed that of the 13 million people who have taken out a consolidation loan, two thirds of them will take on more debt in the future.

Commenting on the statistics, Tim Moss, the website's head of loans and debt, said: "Taking a personal loan to consolidate debts can be a useful way for people to get their finances under control but a loan for these purposes should be considered carefully and only regarded as a measure for becoming debt-free, not as a license to go spending again."

The website also revealed that more than half of consolidators feel they will permanently be in debt, although only a quarter feel they can manage it.

Many commentators have said recent interest rate hikes have sounded the death-knell for very cheap personal loans.

Click here to see how much you could borrow with a Lombard Direct personal loan.

15/02/2007 17:06:08

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