Press Release Summary: Debt consolidation loans are meant to make the repayments easy and manageable. However, if people take these loans and do not settle their accounts with the lenders then these loans may contribute in making their debts grow further and complicate the matter.
Press Release Body: London (longdogfinance) April 8, 2008: Almost one-fourth of people who opt for debt consolidation and take loans for this purpose do not settle their existing accounts with their lenders, says a YouGov poll of 4,048 people. Experts say that the lenders should be more careful, particularly, at a time when the credit crunch has hit the money markets in the UK. There are more chances of borrowers defaulting on loans in such a tight credit situation. The new Banking Code that has come into force also requires the banks to be more helpful to customers who are facing financial difficulties.
According to a price comparison website Uswitch, around 26% of those people who do not close their existing debts when consolidating go on to borrow an additional sum of £2,221 on an average. There were around 1.3 million such loans issued in the last year to enable people merge their debts in one package.
Another aspect of debt consolidation loans relate to their controversial nature. Some experts suggest that these loans do nothing good for the borrowers and push them further into the debts. However, if these loans are used properly by the borrowers with the sole aim of managing their debts then benefits are bound to come.
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