New research from MoneyExpert.com indicates that more than six million consumers have taken on more debt in the last three years, with one in seven opting to consolidate their debt.
Compare loans here
Unsecured personal loans are singled out as the most popular choice for borrowers, with some significant sums involved. Around in five choose to remortgage, with 14 per cent taking out a secured loan with their mortgage.
Find a new mortgage deal
On average, debt consolidation loans worth £13,000 are issued, with personal finance website MoneyExpert pointing to the wider trend for consumers to accrue increasing amounts of debt.
MoneyExpert.com chief executive Sean Gardner commented: “The UKs debt crisis is a serious concern and borrowers are starting to feel the strain.
“Debt consolidation is entirely sensible and a good way to get your finances under control if you owe money to different lenders at varying rates of interest.
“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. There has to be some concern that many people simply see consolidation as a way of keeping on borrowing.”
Among the UK’s debt consolidation property hotspots was Yorkshire, which had the highest amount of debt being consolidated at £16,065. By contrast those in Scotland took out a loan of £14,439 on average.
Debt consolidation has been a popular method for alleviating debt, with borrowers using a single low rate to try to repay a number of different outstanding loans.
However, rising interest rates signalled by recent hikes in the base rate by the Bank of England are likely to concern many borrowers.
Loading ...