Brits Urged To Take Out Debt Consolidation Loans

Thu, 03 Jan 2008

People in Britain could be saving substantial amounts of money by consolidating their debts, new research has revealed.

A study carried out by price comparison site uSwitch revealed that across the UK, consumers could save £15 billion (an average £605 per household) by combining existing credit card, personal loan and overdraft debt into one loan (debt consolidation loan) in 2008.

The uSwitch report also found that some 38 per cent of people have had a credit application rejected in the last six months and 9.5 million people have reached at least one credit limit.

Each year, the website estimates that Brits spend a staggering £93 billion on the interest payments for loans, mortgages, cards and overdrafts.

Mike Naylor, Personal Finance Expert at uSwitch.com said: "Anyone with multiple debts and a poor credit history could be vulnerable to the impact of the credit crunch and should seriously consider consolidation while the option is still available."

"The base rate reduction is a step in the right direction, but it could be too little too late for people in real financial difficulties."

"Consumers must make sure they close down other existing forms of credit to avoid the temptation to rack up these debts again - otherwise any saving will be wiped out," he added.

In the last six months, three million people took out a debt consolidation loan but 65 per cent went on to accrue further debt, according to the figures.

According to Credit Action, the UK’s total personal debt amounts to £1.39 trillion.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.