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Many Britons `consolidate debts to manage payments`

28/06/2007

A total of one-third of borrowers in the UK are using debt consolidation to manage their payments, a new study reveals.

Research from Alliance & Leicester indicates that debt consolidation is the second most popular reason for taking out a personal loan in Britain, with 34 per cent of the general population and 36 per cent of people in London and the south-east choosing to do so.

The most popular reason to borrow cited by the survey is to pay for a vehicle, such as a new car, used car, motorbike or caravan.

Another 20 per cent of respondents said they were taking out a personal loan in order to do home improvements.

Richard Al-Dabbagh, Alliance & Lecester senior personal loans manager, said that it "isn`t too surprising" that people are taking out loans to buy a vehicle, as deals offered at the majority of car showrooms cannot compete.

Some 25 per cent of people who take out consolidation loans clear their debts early, according to Fool.co.uk.

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