People 'consolidate to continue spending'
Published On 12 September 2007
Many people in the UK use loans to consolidate existing debt, new research shows.According to moneysupermarket.com, 28 per cent of people from the UK have taken out a loan to consolidate some or all of their existing borrowing. Worryingly, 66 per cent of these consumers revealed that they continued to increase their debt after taking the loan on.
Indeed, five per cent had to take on another consolidation loan while still paying off the first one and 28 per cent used credit cards to continue to build up their debt.
"Debt has become the common curse of modern times. People need to be careful that the ease of getting credit doesn't catch them out. It can soon spiral into a debt sentence," warned Tim Moss, head of loans and debt at moneysupermarket.com.
"Forty years ago, being in the red was a last resort. It seems many of today's Brits are much more accustomed to taking on debt - although being able to control it is quite another thing."
Figures from Credit Action show that consumer credit lending to individuals in July 2007 was £214 billion, up 5.3 per cent in the last 12 months.
