Tuesday 25th September 2007
An increasing number of borrowers are taking out personal loans to consolidate their existing debts, according to an expert from Sainsbury's bank.
According to statistics from the debt charity, Credit Action, total personal debt in the UK came to £1,355 billion at the end of July 2007 - a 10.1 per cent increase on last year.
Steve Baillie, head of loans at Sainsbury's Bank, said that while loans for other purposes such as home improvements or buying a car are still popular, consolidation has fast become the most popular reason.
"People are looking at their credit and consolidation is the number one reason for customers taking out loans; it's over 40 per cent," he said.
He urged borrowers thinking about consolidation to shop around for the best deal and be sensible with their money.
"If you are going down the consolidation route you have to be strict with yourself so that you're not just deferring the problem for future months and years.
"Shopping around is the most important thing but it is entirely up to the customer's own choice," he advised.
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Loans
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