Spring is a popular time for people to take out a loan, but many of them do not know how long it will take them to repay their borrowings, a new report shows.
According to financial website Fool.co.uk, four in ten people cite debt consolidation as their main reason for taking out a new loan.
However, while the majority think it will take them an average 41 months to repay, in reality debt consolidation loans are cleared within 38 months, Fool.co.uk claimed.
Borrowers who take out loans for holidays anticipate they would take six months or more to repay their debt, while car buyers think their debt will not be cleared for another three years.
Britons should consider all their options before signing up for a loan, according to the head of personal finance at Fool.co.uk, David Kuo.
“Borrowing money may seem like a convenient way to plug a hole in your spending plans,” he said.
“But a hole in your budget may be a sign of deeper problems that can often be solved, not by increasing net borrowing but by cutting gross spending.”
Fool.co.uk research published earlier this year said more than half of those who take out consolidation loans are likely to go on to accumulate more debt.
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