Loan consolidation could help financial fitness

Loan consolidation products could prove useful to people in the UK who take advice from the British Bankers' Association (BBA) to work out their 'financial fitness'.

The chief executive of the organisation, Angela Knight CBE, has urged Britons to assess their financial situation in the same way as they would their health.

Taking the time to really think about financial requirements can help customers to establish whether debt consolidation or other banking and borrowing tools are needed.

"You can go to your bank and talk through your specific needs just as you would go to a personal trainer and talk through an exercise routine," said Ms Knight.

"It is vital that you set aside some time every month to review your bank statement. This is the clearest indicator of your financial fitness and can help you to plan your financial needs for the future."

Frances Walker, spokesperson for the Consumer Credit Counselling Service, said recently that paying only the minimum payment on credit can be expensive.

"Just to pay the minimum amount, which is typically only about two per cent, is really a mug's game," she said, whereas loan consolidation can help to bring existing debts under one manageable repayment.

Before opting for loan consolidation or other financial products, the BBA recommend that consumers consider issues such as whether they need a short- or long-term loan and how they plan to repay the debt.

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