Debt consolidation makes borrowing 'more affordable' - 03/01/2008

Excellent! Very Good Good Fair Poor

Rating:    (1 average)

For those struggling to keep up with repayments, taking on a debt consolidation loan may help make borrowing more manageable, Debt Help UK has suggested.

Although a debt consolidation loan is a financial responsibility, Iain Wrenshall, director of the advisory service, said it may help cut down on high interest rates charged by credit card companies or other lenders.

"A consolidation loan can be very effective, because under the right circumstances it can lower your expenditure and make your borrowings cheaper, making them more affordable," he said.

Mr Wrenshall added that debt consolidation loans can also help provide structure for those struggling financially, as they will be more likely to maintain their financial commitment by taking on a single payment rather than juggling a number of bills.

However, he admitted that a debt consolidation loan is not always the best solution for everyone and advised people to consider the risks before taking one on.

"Sometimes people fail to recognise that a consolidation loan might be the financial straw that ultimately breaks the camel's back," he said.

According to recent research published by uSwitch.com, consumers are paying around £93 billion in interest on credit cards, loans, overdrafts and mortgages.

Total personal debt in the UK currently amounts to £1.39 trillion.

© Adfero

Back to Index