The early half of the year and January in particular is the busiest time for taking out personal loans for debt consolidation purposes. Sainsbury’s Finance, which offers one of the most competitive personal loan rates of 8.1% APR typical for balances of over £7,000, estimates that as many as 250,000 personal loans, with a combined value of £2.93 billion, could be taken out for this purpose during the first three months of 2009.
Steven Baillie, Head of Loans at Sainsbury’s said: “Debt-consolidation is always a good idea if you have multiple sources of debt, maybe a store card and credit card or a historical loan. Paying a number of individual rates of interest which could be as high as 30% or more on some store cards for example is not the best way to approach your debt.
“Given that our typical rate is currently 8.1% APR typical online, consolidating all of your non-secured debt through one of our loans could save you hundreds or thousands of pounds in interest repayments.”
Around a quarter of personal loans are taken out for debt consolidation purposes, with the average loan for this purpose being just under £12,000. This year, we estimate that around 18% of personal loans taken out for debt consolidation purposes will be opened in January.
Sainsbury’s Finance estimates that some 700,000 personal loans worth over £8 billion were taken out for debt consolidation purposes last year.
About Sainsbury’s personal loan:
Sainsbury’s Finance has cut its loan rates for any online applications of £7,000 or more (up to £25,000) to 8.1% APR typical. In addition to one of the most competitive rates in the marketplace, customers taking out a Sainsbury’s Finance Loan benefit from:
§ A personally tailored repayment period, from one to seven years
§ Fixed repayments for the whole period of the loan
§ An instant personal loan decision
§ The money in 24 hours
