The total value of personal loans taken out for consolidation purposes could reach £2.93billion in just three months time, according to Sainsbury's Finance.
According to the financial institution, the first half of a year is usually the busiest time for taking out personal loans
for debt consolidation
As a result, Sainsbury's Finance is predicting that as many as 250,000 unsecured loans
will be taken out for consolidation purposes during the first three months of 2009.
Commenting, Steven Baillie, head of loans at Sainsbury's, said: "Debt consolidation is always a good idea if you have multiple sources of debt, maybe store card and credit card or a historical loan.
"Paying a number of individual rates of interest which could be as high as 30 per cent or more on some store cards for example is not the best way to approach your debt."
According to the study, around a quarter of all personal loans are taken out to be used in consolidation, and Sainsbury's predicts that 18 per cent of these will be taken out in January this year.
A Sainsbury's personal loan offers a rate of 8.1 per cent APR, as does the Halifax personal loan
, which can also be used for consolidation purposes.
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