Only Finance.com® - Personal loans suitable for debt consolidation

Loans - Personal loans 'suitable for debt consolidation' - 04/02/2008

Personal loans have been recommended by an expert at a top personal finance magazine as a good way of consolidating debt.

By contrast, the editor of Moneywise, Rachel Lacey, said that people facing high personal debts should steer clear of securing a consolidation loan on their assets.

In particular, homeowner loans - "the type you often see advertised mid-afternoon on Channel 4" - should not be touched "with a barge pole", she claimed.

Secured lending means that homes can be at risk if repayments are not kept up with, as funds borrowed are guaranteed against the property in question.

"It's no good consolidating all your credit cards and all your existing loans onto one personal loan just to carry on borrowing and using your overdraft and taking out another credit card," she said.

Current market conditions are also suitable for personal loans borrowing.

Ms Lacey added: "[Personal loan] rates are still looking reasonably good - you can easily get something under seven per cent."

Moneywise is Britain's best selling personal finance magazine.

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPATMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

MISSING PAYMENTS WILL HAVE SEVERE CONSEQUENCES AND MAY MAKE OBTAINING CREDIT MORE DIFFICULT IN THE FUTURE.

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