January is the busiest month for people taking out personal loans, it has emerged, following the festive season when many may have overspent or taken out extra credit.
New research from Sainsbury’s Bank has found that January often sees consumers transfer balances between credit cards, which could help them to benefit from lower interest rates.
But debt consolidation appears to be top of many people’s lists, with the bank forecasting 433,800 personal loans to be taken out from January to March, totalling approximately £4.8 billion.
By consolidating existing loans, borrowers can often reduce the amount of interest payable and manage their debt more effectively.
“Consolidating your debts into one personal loan which charges a lower rate of interest can mean that you could save hundreds of pounds in repayments,” agreed Steven Baillie, loans manager at Sainsbury’s Bank.
The high-street lender also offers a number of financial products including mortgages, insurance and credit cards.
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