The Citizens Advice Bureau (CAB) has said that while many are tempted to use this avenue by what seem very tempting loan interest rates, it doesn’t mean that the idea is a good one, with many seeing a good deal and grabbing it without thinking of how they will repay the loan.
“Loan rates may look attractive but you must consider overall affordability,” a CAB spokesperson said.
“You need to look for repayment levels and work out whether you can afford the loan.”
And the CAB warned against covering old debts by taking on new debt and suggested that what you needed may be advice on your financial future, not greater financial burdens.
“Is the loan you are taking out to help with debts? If so, getting some debt advice might be a better option,” the spokesperson said.
ClearDebt’s debt analyser allows you to work out what swapping loans will do to your finances now and up to twelve years in the future.