Figures have shown that the early parts of the year, are busiest for taking out a personal loan for the purpose of debt consolidation.

January in particular was noted to be the busiest, according to Sainsbury’s Finance. Also around a quarter of personal loans, are taken out for debt consolidation purposes, with the average value of £12,000. This year, it was estimated that around 18 per cent of personal loans taken out for debt consolidation purposes will be opened in January.

Sainsbury's Finance estimates that last year some 700,000 personal loans worth over £8 billion were taken out for debt consolidation purposes.

The beginning of the year may be the busiest time for such loans, as borrowers may be using the New Year as a reason to make new financial changes, for the better.

Steven Baillie, Head of Loans at Sainsbury's Finance said: "Debt-consolidation is always a good idea if you have multiple sources of debt, maybe a store card and credit card or a historical loan. Paying a number of individual rates of interest which could be as high as 30 per cent or more on some store cards for example is not the best way to approach your debt.

Baillie also added: "Given that our typical rate is currently 8.1 per cent APR typical online, consolidating all of your non-secured debt through one of our loans could save you hundreds or thousands of pounds in interest repayments."