Consolidate debt with a loan, bank says

Monday, December 5, 2005

Alliance and Leicester has said that consumers could save a considerable amount of money by consolidating debts into a single loan.

The bank is trying to encourage the 29 per cent of people who say they will borrow this Christmas to transfer credit and store card debt to a single unsecured loan, something that will appeal to the 24 per cent of people who find it difficult to manage multiple repayments.

"With many millions of pounds spent on the high street in the run-up to Christmas, shoppers will need to look at their finances and consider the different ways they can save money," said Claire Alvey, personal loans manager at Alliance and Leicester.

"Debt consolidation is a sensible way of borrowing for anyone who has debt spread across more expensive store cards, credit cards or point-of-sale finance deals."

The bank uses the example of a debt of £7,500, where the consumer could save £1,100 on interest payments by shifting the debts to a low-rate loan with a typical APR of 6.6 per cent.

Christmas time will potentially see consumer debt rise from the current total of £1.13 trillion.

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