Consumers are increasingly taking advantage of "consolidation loans" without being aware of the financial consequences, a number of charities are warning.
The consolidation loans business today is worth £28 billion and has spread its appeal from the mainly low-income groups it initially targeted.
With more and more unsecured loans being transformed into loans secured against property, debt counsellors question some borrowers' understanding of the risk this poses to their homes.
A spokeswoman for the Consumer Credit Counselling Service (CCCS) warned: "Over the past two years, we have noticed that more middle-class families are not seeking the help of a debt counsellor, but are choosing to consolidate their debts or are remortgaging.
"If you are being overwhelmed by debt, you should seek help from an independent debt adviser, not an organisation that will entice you into more debt."
Richard Mason, a director at moneysupermarket.com, the price comparison website, told the Times newspaper that many homeowners could find unsecured loans at lower rates than many of the consolidation companies offer.
However, Andrew Pelley, a marketing director at Loans.co.uk, defended the industry, arguing: "More and more people are taking out these deals because they understand that they do not have to pay the high interest charges of repaying store card debt or making just the minimum repayment on credit cards. A secured loan often reduces interest payments by £400 a month."
© DeHavilland Information Services plc