Consolidation loans can be a useful tool for managing debt if used sensibly, a consumer website has said.
The site, fool.co.uk, said that the average size of a consolidation loan in the UK is now £16,459. These loans typically take eight years to pay off.
One in four people who sought a consolidation loan to help manage their debt found that the service helped them clear their debt early.
"Consolidation loans aren't necessarily a bad idea. After all, it can make sense to roll up several expensive debts into one affordable monthly payment if you are faced with a myriad of claims on your money," said David Kuo, head of personal finance at the website.
However, Mr Kuo warned consumers that they should resist the trap of using a consolidation loan to simply allow them to continue to spend and increase their debt.
"Consolidation loans can be a welcome lifeline for people caught in financial difficulties. But the lifeline can quickly turn into a noose if you submit to the temptation of running up further debts," he concluded.
Source: http://www.netloans.co.uk/articles/Consolidation-loans--can-be-useful-
debt-management-tools--315.aspx |
