Debt consolidation loans can be a "very effective" way of managing expenditure and making borrowing more affordable, it has been claimed.

Iain Wrenshall, director of Debt Help UK, explained that consolidating a number of debts such as loans or credit card balances can be acceptable when it offers a better interest rate and more affordable repayments.

"It can also offer financial structure, allowing people that would otherwise struggle with several different commitments to maintain those commitments with a single and possibly lower payment," he added.

However, it may not always be a good idea for someone to borrow more money when they are already in considerable debt, warned Mr Wrenshall.

According to Credit Action, total personal debt in the UK had reached £1,391 billion by the end of October 2007. This is a 9.7 per cent growth rate over the preceding 12 months, equating to an increase of £122 billion.

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