Post-Christmas consolidation loans 'could save millions'

Thursday, January 03, 2008

People in the UK could find they save considerable amounts of money by opting for a debt consolidation loan in 2008, according to a new study.

Research carried out by uSwitch found that across the UK, consumers could save £15 billion by combining existing credit card, personal loan and overdraft debt into one loan.

According to the report, 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 price comparison site estimates that Britons spend £93 billion on the interest payments for loans, mortgages, cards and overdrafts.

"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," said Mike Naylor from uSwitch.

"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."

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.

Source: http://www.moneyhighstreet.com/news/