The latest research from Sainsbury’s Bank Loans suggests that up to 212,000 people could take out personal loans worth up to £2.2 billion in the first three months of the year for debt consolidation.
The Bank estimates that this figure could be equal to around a third of all personal loans taken out during January, February and March. The average loan size taken out to consolidate debts is estimated to be around £10,300.
To those looking to consolidate debts, Sainsbury’s Bank is encouraging them to ensure the monthly repayments will be lower under the terms of the new loan and that they can afford to cover any fees from their old lenders, before going ahead.
Simon Ranson, Head of Banking at Sainsbury’s Bank said: “Using a personal loan to consolidate debts can be a good way to bring monthly repayments down and simplify them under one provider. However, it’s crucial you make sure you’re going to see a real advantage to moving, so work out if the total interest paid on the balance at the end of the repayment term will be lower, or at least comparable.”
Andrew Hagger Personal Finance Expert from Moneycomms said; “January is the month when many people take stock of their financial situation and plan for the year ahead, so it’s no surprise that some are consolidating their finances, particularly with some of the attractive loan rates currently available.
Sainsbury’s Bank has a loan switcher calculator to help customers gauge whether they might save money by switching their existing loan to a Sainsbury’s Bank loan.
The Bank, which consistently offers competitive interest rates on personal loans also has a Price Promise Guarantee. This means that if a customer is offered a “like for like” loan that has a lower APR with another lender, Sainsbury’s Bank will beat it by 0.1%. This is subject to qualifying for the Offer and customers must not have already accepted its Standard Loan offer by signing and returning a Sainsbury’s Loan agreement . Car dealership loans and finance excluded.
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