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Debt consolidation 'only suitable for manageable arrears'
Consumers should only consider using debt consolidation loans if their arrears are "relatively manageable", according to a financial advice website.
Thinkmoney.com has claimed such loans can make debt management easier by allowing people to combine a number of financial issues and make one monthly payment to reduce them.
However, the website added that the debt consolidation is only really suitable for certain consumers.
"If, for example, you have long-standing debts that are going down slowly (such as credit card or overdraft debts, which tend to have fairly flexible repayment terms), a debt consolidation loan can be a good way of trying to make sure these debts are paid back more rapidly," it explained.
The website added that those who are already having problems with handling their debt may need to consider alternatives.
Debt Advice Direct recently claimed that consolidation could be useful to those who may need to pay offer arrears from the recent Christmas period.