More than a third of bank loans used to consolidate debt

A new analysis of UK bank loans suggests that just over a third (35.2 per cent) of the total value of personal bank loans taken out in the first quarter of 2012 were used to consolidate debts.  This figure was up slightly (from 33.6 per cent) in the same period in 2011.

According to Sainsbury’s Bank, some 164,000 people took out loans valued at £1.6billion during that period. 

The Bank has revealed that its own statistics suggest the trend continues to rise.  More than 40 per cent of the loans it made to customers in January 2013 were said to be used to consolidate debts.

A spokesman suggested that borrowers are seeking to reduce their debts by using loans to pay off higher interest store and credit cards.

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