Debt consolidation rush expected, says bank

The bank said that there will be a post-Christmas rise in number of debt consolidationloans taken out by consumers, while the number of people transferring balances between credit cards is also expected to grow.

According to the bank, about half of all Christmas spenders expect to clear their debt by the end of the month, although one in ten debtors expect the process to take more than 12 months.

“Consolidating your debts into one personal loan which charges a lower rate of interest can mean that you could save hundreds of pounds in repayments,” said Sainsbury’s Steven Baillie.

In related news, Sarah Miller from Citizens Advice has said the charity is preparing to deal with the financial hangover from the festive season.

“This month we expect to exceed the 140,000 debt problems that Citizens Advice bureaux dealt with in January 2006,” she stated.