Debt consolidation loans

A debt consolidation loan is a loan designed to bring together existing loans with the goal of reducing your monthly payments.

By bringing credit cards, overdrafts, and existing personal loans together in one place can both simplify repayments and potentially save hundreds or thousands of pounds in interest payments.

However, it is imperative that someone taking out a debt consolidation loan shops around to find the most competitive rate of interest available to them otherwise they could end up actually increasing the amount of interest they pay.

More people apply for debt consolidation loans in January than in any other month, as Christmas and New Year's Eve celebrations take their toll on bank accounts, according to data from Sainsbury's Bank.