Debt consolidation “a positive move”, says industry body

A spokesperson for British money lenders has given taking out loans to consolidate other debts the thumbs-up

A spokesman for a leading industry body has said that taking out a personal loan can be a “positive move” to help debt consolidation, according to the leading financial website Motley Fool.

The recommendation came from a spokesperson for the Finance and Leasing Association (FLA), an organisation which represents lenders in the UK, promoting best practice and responsible lending throughout the industry. The Motley Fool reported that using a loan to help debt consolidation was considered especially appropriate “in the wake of rising credit card interest rates”.

Debt consolidation a constructive step

The website was quoting Helen Saxon, the FLA’s spokesperson, who advised that debt consolidation with a personal loan “can be a positive move, because personal loans generally have lower interest rates than credit cards. ”

She did caution against running up further debt after taking out a debt consolidation loan, which can increase debt problems; and stressed that anyone taking out a debt consolidation loan needs to be sure they can keep up the repayments. But her comments underline the importance of paying off high-interest debts like credit cards and store cards while accepting a cheaper level of debt is a constructive step.

A range of uses apart from debt consolidation

The Motley Fool reported that “Ms Saxon also revealed that debt consolidation is not the only reason Britons are taking out personal loans, with a ‘range of uses’ discovered.

"’There are loans being taken out across the spectrum. Some are being used to buy cars, some are used to improve the house. But . . . some are used for consolidating debts, so there's a range of uses,’ she added.”

Homebank can meet your debt consolidation needs

Anyone thinking about debt consolidation should get expert advice from a professional, FSA-authorised company like Homebank.

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For informative and astute bad credit loan advice, call us to arrange a no-obligation appointment to suit you. Homebank are the ‘people’s mortgage broker’, with more than 3,500 mortgage products to choose from – including products not readily available on the high street.

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