Friday, February 13, 2009
Category:
Consolidation
According to Sainsbury’s Finance, an estimated 250,000 personal loans, with a total value of £2.93 billion, could be taken out for debt consolidation purposes during the first quarter of 2009.
It would seem that the first half of the year is the most popular time at which to take out personal loans for this reason. January in particular is a busy month, with expectations that in the region of 18 percent of personal loans taken out for debt consolidation will be opened during this month.
Head of Loans at Sainsbury's, Steven Baillie, said: "Debt-consolidation is always a good idea if you have multiple sources of debt, maybe a store card and credit card or a historical loan. Paying a number of individual rates of interest which could be as high as 30% or more on some store cards for example is not the best way to approach your debt.”
Sainsbury’s has revealed that approximately 25 percent of personal loans are taken out for debt consolidation and that the average loan for this purpose stands at just short of £12,000. An estimated 700,000 personal loans, to a value in excess of £8 billion, were taken out for this reason last year.
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Homeowners that are currently juggling multiple monthly repayments, such as credit cards, store cards and personal loans, may wish to consider combining their debts with a secured, debt consolidation loan. This option would leave the borrower with just one simple, potentially lower, monthly repayment. In addition,
secured loans are repayable over a term to suit the borrower between 5 and 25 years. However, please remember that when consolidating your debt may increase the amount you pay back overall and extend the repayment period of your debts.
