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Consolidation loans `good for people with bad credit rating`

14/04/2008

Debt consolidation loans are a good option for consumers who are worrying about their bad credit rating, according to one industry expert.

While taking out a loan when a consumer has a bad credit rating is often seen by lenders as a risk, there are many professional debt advisors who can seek out the best debt consolidation loan, Christian Phelps said.

Mr Phelps, from Lancaster University, said that a loan can help people with a number of creditors pay off their debts, leaving only one creditor to deal with - reducing the stress attached to debt problems.

However, he warned: "Because the lender`s money is at risk the rate of interest charged with high risk personal unsecured loans is high."

Recently, debt consolidation expert Amenda Dorothy said that unsecured debt consolidation loan is the most frequently used loan to manage credit card debts.

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