Brits take control of their finances with careful debt management

An estimated 164,000 consumers collectively took out £1.6 billion in personal loans in the first quarter of 2012 in order to consolidate existing debts, according to analysis from Sainsbury's Bank Loans.

This January, approximately 42% of Sainsbury's Bank loans were taken out for debt consolidation purposes suggesting this is a popular measure for those looking to take control of their New Year finances.  
 
Figures from the British Bankers Association suggest that this careful management of debts is having a positive impact. Its figures reveal that consumers made significant headway into reducing their debt in 2012, with overall loans outstanding falling by 12.6%.
 
The supermarket bank's figures reveal that the average amount borrowed for debt consolidation remains consistent , at around £9,800. Its findings also indicate that, year-on-year there has been a slight increase of around 7,000 people taking out a loan for this purpose. Around a third (35.2%) of the total value of personal loans taken out during the first three months of 2012 was used to consolidate debts compared with 33.6% in 2011.
 
Steven Baillie, Head of Loans at Sainsbury's Bank, said: "Our findings suggest that people are working hard to pay down their debts and reducing the cost of any debt is one way to make this easier. We'd urge those looking to consolidate debts, either from store cards or credit cards or other loans, to make sure they really shop around for the best loan rate as they could save a great deal.
 
"The difference in saving between borrowing £10,000 over three years at a market leading rate of 5.1% APR Representative, which is our lowest ever rate, and a mid-market 6.7% could be as much as £246.96 over the lifetime of the loan.
 
"Some providers like ourselves also offer shopper rewards so it's wise to consider if this is something that you will benefit from."
 
Sainsbury's Bank offers loans between £1,000 and £25,000 to meet a wide range of needs. In addition to competitive rates, customers taking out a Sainsbury's Bank loan also benefit from:

A personally tailored repayment period, from 1 to 7 years 
Fixed repayments for the whole period of the loan
Easy to apply
Money transferred directly into your bank account
 
For further information on Sainsbury's Bank Loans, log onto sainsburysbank.co.uk.