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Consolidation loans "ideal" for festive debt

Taking out a debt consolidation loan could be the best move for certain Britons who overspent at Christmas, it has been claimed.

However, consumers should not rush into taking out such a loan - instead, they should think carefully and look at all the small print first, thisismoney.co.uk advises.

While transferring credit card balances to zero per cent deals can bring the lowest interest payments, this can be "risky" as any purchases on that card are likely to bring full interest charges, the website explains.

"Consolidating your debts into one loan can prove an ideal solution by cutting monthly payments through reduced interest," it states.

"But choosing the best way requires careful consideration and the option must be right for you rather than simply the lowest headline interest rate."

Earlier this week, research by MoneyExpert.com suggested that up to 6.9 million bills could have gone unpaid since June 2007.

It said that this could get worse as the credit crunch continues to squeeze consumers' finances and energy prices begin to rise again.

See how much you could save with a debt consolidation loan from Lombard Direct.

© Adfero Ltd

11/01/2008 17:16:09

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