Debt consolidation 'may save money'

Consolidation loans may be a way to structure finances and save money, according to Debt Help UK.

Debt advice from a website spokesperson has said that consolidation loans can be effective in lowering people's expenditure and making borrowings cheaper, provided the loan repayments are affordable.

People may choose to consolidate expensive credit card debts into one, possibly lower, monthly payment to save on interest payments, Iain Wrenshall, director of debthelpuk.co.uk, has said.

Mr Wrenshall added that this option may help people who are struggling with debts to organise the way they spend their money.

"[A loan] 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 said.

Statistics from uSwitch.com have shown that credit card and unsecured loan debt in the UK amounts to £222 billion, yet the average household could save £605 over three years by consolidating their debt.