People use loans 'to consolidate above all else'
Published On 24 September 2007
People in the UK use personal loans to consolidate debt, fund home improvements and finance car purchases, an industry expert has said.Steve Baillie, head of loans at Sainsbury's Bank, said that around a quarter of consumers use loans to pay for home improvements which might add value to a property.
Another 30 per cent of people use their loan to pay for new cars, particularly during March and September.
However, Mr Baillie added that "the number one reason for customers taking out loans" is to consolidate existing debt. In fact, he explained that around 40 per cent of all loans were used for this reason.
"If you are going down the consolidation route you have to be strict with yourself so that you're not just deferring the problem for future months and years," Mr Baillie warned.
"Shopping around is the most important thing but it is entirely up to the customer's own choice."
Recently, moneysupermarket.com reported that over five million people think that they will always struggle with debt.
