Banks waiting for loan application rush to cover Christmas debt

Over the recent Christmas and New Year period, many people will have run up huge debts on their credit cards, store cards, catalogues and overdrafts, with a huge number having splashed out on gifts, clothes, partying and entertainment and not stopping to count the financial cost until it was too late.

For many of these people, the dreaded day has now come when they have been faced with their statements and have realised just how much debt they have accrued over the festive season.

It is reported that banks in the UK are now waiting for a rush of loan applications from those who have realised that they will struggle to repay their various Christmas debts and are now looking for a way to repay all of these different debts with one lower interest one.

Many people have realised that consolidating a range of higher interest debts with one lower interest loan can help them to cut back on outgoings and make it easier for them to manage their debts, and the banking industry expect a large number of people who overspent over the Christmas period to go down the consolidation route.

Experts are now urging consumers who are considering taking out a consolidation loan to repay their debts to first seek financial advice to ensure that they are taking the right steps and are not going to get themselves into even more financial hot water.

One industry expert from Hull Community Legal Advice Centre said: "In relation to clients considering consolidating their finances we would first and foremost strongly recommend that all clients obtain full independent financial advice before entering any agreement. At Community Legal Advice (CLAC) we do recommend that people should be aware that consideration of their debt options by seeking advice through an organisation such as ours, may be a more suitable approach than seeking to obtain further credit. We provide clients with full legal advice on their debt options and are able to assist them on a free and confidential basis."

Tom Smith
15th March 2012