Once upon a time, debt consolidation loans (like other loans) were more widely available than they are today.
A lot of things have changed since the financial crisis began. To name just three major factors: lenders have become more careful about lending; borrowers have become more careful about borrowing; and property prices aren't rocketing upwards anymore, meaning people generally have less equity to use if they're looking to secure debt against their house (through a debt consolidation loan or mortgage).
"That doesn't mean consolidation loans aren't an option anymore," said a spokesperson for the Debt Advisory Centre , "although these days, many people are more likely to take a different approach to their debts. Having said that, if you think you might want to consolidate your debts at some point, it's more important than ever to take care of your credit rating."
To do that, and increase your chances of being approved for a loan, you could follow these tips:
• Make sure you're on the electoral roll
• Don't make too many applications for credit in a short space of time
• Do everything you can to make sure you pay all your bills on time
• Check your credit report before you apply for credit - and if you find any errors on there, you have the right to get them changed.
"Even after they've followed these steps, some people simply won't find it possible to be approved for a loan - but that doesn't mean there's no help available to them. In fact, the term 'debt consolidation' doesn't just refer to loans or mortgages: there are other solutions that can help people cope with their debts and pay them off at a rate they can afford, like debt management plans and IVAs [Individual Voluntary Arrangements]."
Right now, of course, it's the start of a New Year. For many people, it's a time which traditionally involves reviewing the household finances and figuring out some kind of plan for the year ahead.
There's a lot of information out there that shows how people are planning to do that.
Some recent figures from uSwitch, for example, show us that people's main priorities in the year ahead are clearing debt (42% of people questioned said this) and saving money (45%). In today's economic climate, consumers are generally more worried about what the future holds, from high inflation to low pay rises, so it's no surprise that they're being more cautious with their finances.
The Bank of England's latest Credit Conditions Survey, meanwhile, reminds us that things aren't static in the world of credit. Asking lenders about credit conditions over the final three months of 2011 - and their expectations for the first three of 2012 - the Bank found that the availability of unsecured credit to consumers had increased towards the end of last year, and was expected to increase further between now and March.
Of course, availability of credit is only part of the story - it's interesting to note that actual consumer demand for unsecured credit had fallen off between October and December, although it is expected to pick up a bit now that the New Year's started.
