Millions Of People 'Should Look To Debt Consolidation Loans'

Millions of people across the UK are currently concerned about the level of their debts, prompting many to investigate debt consolidation loans, one price comparison site has asserted.

According to personal finance commentator MoneyExpert, 2.48 million people in the UK are "very concerned" about their debts. However, although the figure represents seven per cent of the adult population, this has not stopped one in four (25 per cent) of those already in debt from increasing their borrowing in the last three months. Research published in the company's debt index today reveals that as repeated increases in the interest base rate hit home, higher numbers are questioning their ability to keep up with repayments.

Today's report is the first outing of the MoneyExpert debt index, which is intended to measure how well UK consumers deal with their debt situations.While seven per cent are worried about their ability to deal with their debts, the new measure suggests, a similar number have increased the amount they owe by a fifth (20 per cent) or more. In more positive news from the index, 65 per cent of borrowers have either not increased their debt or have cut the amount that they owe - and some may reduce the amount of interest they pay on their borrowing by engaging in debt consolidation.

Sean Gardner, chief executive of MoneyExpert.com, said: "With more than 2.48 million very concerned about keeping on top of their debts it is clear that there is a serious crisis brewing. Anyone who is very concerned about their ability to keep on top of their debts is heading for serious trouble if they do not take action now." He explained that the five interest rate hikes announced by the Bank of England since last August mean that people will need to adjust and understand that borrowing is likely to cost significantly more "for the foreseeable future".

The sources of debt identified in the firm's survey are several, ranging from mortgages (41 per cent) through unsecured personal loans (29 per cent) to secured loans (five per cent). The highest numbers are borrowing on credit cards, with 47 per cent of those questioned stating that they owe money on plastic. However, Mr Gardner reassured the public that taking action can help to assuage money worries. "There are however plenty of ways for people to get their debts under control from consolidating their borrowing to using the equity in their home through a secured loan. It is important that people act and do not bury their heads in the sand," he asserted.

Recent research from an independent financial advisory service, Unbiased, revealed that more than one in twenty (six per cent) UK consumers do not know how much money they owe - with the figure rising to two in five (41 per cent) in people aged between 18 and 24. Meanwhile, Mint Financial Services has advised that those owing money on multiple credit cards should look to combine their borrowing into a single debt consolidation loan in order to mitigate the interest accrued.