Money Expert: Debt 'crisis' forces consolidation

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Money Expert: Debt 'crisis' forces consolidation

Mon 26th Feb 2007

Increasing numbers of Britons are turning to debt consolidation in an attempt to ease their financial woes, new research from MoneyExpert shows.

The financial comparison site shows that while one in seven Britons are consolidating debts to ease financial burdens, the amounts being borrowed are substantial.

The average consolidated loan amounts to £13,000, but some five per cent of consumers have borrowed over £50,000 in the last three years.

While monthly repayments on a £13,000 personal loan would amount to £393.99 a month, the group believes that a £50,000 loan might entail a consumer to take out a secured loan.

Sean Gardner, chief executive of MoneyExpert, described debt consolidation as an "entirely sensible" method for consumers to regain control of their finances if loans of varying interest rates are owed.

"However, it only works if you accept consolidation is a wake-up call to get your borrowing under control and then work to become debt-free," he added.

"There has to be some concern that many people simply see consolidation as a way of keeping on borrowing."

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