In the course of recent years, debt consolidation has been one of the key reasons for obtaining a new personal loan. Debt consolidation loan is a type of a loan which eliminates the current debts of a borrower, with the advantage of building extra room into their monthly repayments while saving money because the new loan is cheap compared to their previous debts.

However, the latest figures from Sainsbury’s finance suggest that the number of applications for debt consolidation loans in UK has decreased substantially.

Only two years ago, debt consolidation loans constituted about 8 % of all personal loans released through Sainsbury’s finance. By 2008 this amount had plunged to nearly 5 % and by the end of 2009, it decreased further to 2%.

According to Sainsbury’s such a tendency demonstrates that borrowers in the UK are now beginning to concentrate on clearing their current debts, instead of just moving them in to one loan. This assumption is supported by the statistics given by Bank of England, which makes it clear that in the end of last year, loan repayment was on the rise.

Additionally, the figures indicate that more consumers have taken out personal loans for large expenditure such as purchasing a new car, or paying for home improvement.

Steven Baillie of Sainsbury’s finance said that it is becoming increasingly obvious that repaying debts is now much more popular that consolidating them.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.