Recently performed research has indicated that compared to two years ago far fewer personal loans that are taken out in the UK are being used for the consolidation of other debts by consumers. The research was carried out by Sainsbury’s Finance, with the results showing a marked change in the number of people using personal loans to consolidate their other debts.

The research from Sainsbury’s Finance showed that a couple of years ago one pound in every thirteen pounds taken out by customers in the form of personal loans was used towards consolidation of other debts. However, this has now dropped to one pound in every fifty pounds, which marks a significant drop in the number of people using personal loans for debt consolidation.

Officials from Sainsbury’s Finance have said that whilst people are still taking out personal loans they are being used more for other purposes now rather than for consolidation of other debt. Home improvements are a popular choice for the use of personal loans, and more people are also using these loans more for the purchase of a new vehicle.

A Sainsbury’s spokesperson said: “Debt consolidation has always been one of the most common reasons for people to take out personal loans. But while more and more people are taking out a loan for other reasons, there has been a sharp decline in the proportion of people borrowing money in order to consolidate their debts.”

The spokesperson also went onto to state that consolidation was still something that those with a lot of debt should consider, as it could cut their monthly repayments down to an affordable level and could reduce the overall amount of interest that they pay on their debts. He added that it was important for consumers to shop around for the best rates when considering personal loans for any purpose.

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