Benefits to paying off debts with personal loans

The main reason people take out personal loans is for debt consolidation, which is no harm, an industry expert has said.

Steve Baillie, head of loans at Sainsbury’s Bank, explained that doing so can be a positive way for someone to start to bring their finances under control.

He said that there are three big financial issues for people, getting out of debt, paying for a new car, and home improvements.

“What you’ll probably find is, anybody that’s doing debt consolidation will probably be doing an element of a purchase at the same time,” he added.

“So there’s a trigger to sorting things out, whether they’re sorting out the house, or putting a new bathroom in or whether they’re getting a second car for the family et cetera.”

Total lending was up by £11.2 billion in September this year, according to research by Credit Action. Meanwhile secured lending saw growth of £9.8 billion during the month.

Tags: Credit Action, finance, main reason people, harm, house, new car