Consolidation loans offer solution to New Year debt says Nationwide Go compare with our comparison table

Consolidation loans offer solution to New Year debt says Nationwide

07 January 2010 / by Rachael Stiles

Nationwide is expecting the number of debt enquiries to surge in the new year as consumers try to cope with the cost of Christmas, but suggests consolidation loans and balance transfer credit cards could help.

The credit crunch has already caused the number of debt enquiries to rise, figures from Citizens Advice suggest, increasing from 455,297 in the period of July to September in 2008 to 572,970 in the same period in 2009.

Consequently, Nationwide expects the number of people seeking debt consolidation loans to rise in the first few months of 2010; in January 2009, 60 per cent of all Nationwide loans issued were for debt consolidation.

But consumers should not let their debts get on top of them, says Richard Napier, head of Nationwide personal loans and credit cards, because there are various options available to make them more manageable.

For example, debt consolidation loans offer a way of reducing monthly outgoings and making debt easier to manage by putting them all in one place, while interest–free balance transfer credit cards can reduce the overall cost of the debt and prevent it from spiraling further.

Commenting, Mr Napier said: "With Christmas over, some people will be thinking about how they had spent too much money over the festive period. For some, this will simply mean tightening their belts for a while and cutting back on a few luxuries.  But for those already in debt, the New Year can signal greater money worries.

"Money worries are made worse if the debt is spread across many sources such as credit and store cards, overdrafts and loans. So if you have several outstanding debts, what is the best way to reduce that debt to avoid a Christmas debt hangover?"

Mr Napier explains that debt consolidation loans, at a reasonable interest rate, "can help people manage their finances that much easier." 

Balance transfer credit cards – where the balances from several credit cards are all moved onto a new one – could save hundreds of pounds a year in interest, he said.

© Fair Investment Company Ltd

Nationwide is currently offering its Flex current account customers a rate of 7.60% - apply here »

ProviderLoan AmountCredit HistoryRates FromTerm 
£1,000 to £25,000Good Credit Only3.3%

APR
Representative

(£7,500-£15,000)

1 year to 5 yearsGet Quotes >
Loans from £1,000 to £25,000. Fixed monthly payments and no set-up charges. 3.5% APR Representative. A loan of £10,000 over 5 years will cost you £180.80 per month at a representative 3.3% APR. The total cost after 5 years is £10,848.30, which includes £788.30 interest at 3.0% fixed and a £60 fee. The total amount of credit is £10,060. The rate and fee you are offered will depend on your individual circumstances
£7,500 to £20,000Good Credit Only3.6%

APR
Representative

(£7,500-£20,000)

1 to 5 YearsGet Quotes >
£2,500 to £15,000Good Credit Only3.5%

APR
Representative

(£7,500-£15,000)

2 years to 5 yearsGet Quotes >
Loans from £2,500 to £15,000. Fixed monthly payments and no set-up charges. 3.5% APR Representative. A loan of £7,500 over 5 years will cost you £136.26 per month at a representative 3.5% APR. The total cost after 5 years is £8,175.60. The rate and fee you are offered will depend on your individual circumstances
£1,000 to £20,000All Credit Histories Considered49.7%

APR
Representative

1 to 4 YearsGet Quotes >
Rebuild Your Credit. Interest rates start from 9.3% APR. Instant Online Decision using 'soft' credit searches. Representative Example: If you borrow £3,000 over 3 years at a rate of 41.0% per annum (fixed) you will repay £146.09 per month & £5,259.11 in total.
£1,000 to £20,000All Credit Histories Considered99.90%

APR
Representative

1 to 2 YearsGet Quotes >
Interest Rates from 35.9% - 99.9%, depending on the information you provide in your application. Fixed monthly repayments. Instant Online Decision. Representative Example: The Representative APR is 99.9% - Based on an assumed loan amount of £1,500 over 24 months at an interest rate of 71.3% p.a. (fixed) you would pay £118.88 a month and £2,853.12 in total.