£2.2 billion to be borrowed for debt consolidation in Q1
Research issued by Sainsbury’s Bank indicates that over 200,000 UK residents could take out personal loans in the first quarter of this year, for the purposes of debt consolidation.
The Bank estimates that the total borrowed could near £2.2 billion, a third of all personal loans taken out during this period. The average loan size taken out to consolidate debts is estimated to be around £10,300.
“Using a personal loan to consolidate debts can be a good way to bring monthly repayments down and simplify them under one provider,” said Simon Ranson, head of banking at Sainsbury’s Bank. “However, it’s crucial you make sure you’re going to see a real advantage to moving, so work out if the total interest paid on the balance at the end of the repayment term will be lower, or at least comparable.”