Debt consolidation can be a giant leap forward in getting to grips with debt and saving a large amount of money in interest repayments.

Debt consolidation involves merging an accumulation of debt into one single low interest rate loan. Figures show that by sticking to a plan over the course of three years, a British householder could save a whopping £605 which will sit in their banks rather than line the pockets of creditors through inflated interest charges.

During 2007, an estimated £93 billion was spent on interest which is, on average around £3,744 per household.

Research shows that consumers are currently spending an additional £517 on debt compared to twelve months ago and the average household is now in the red by £4,280 with credit card debt, overdrafts and loans.

People with a multitude of debt and a poor credit history are vulnerable to the ‘credit crunch’ as loans are becoming more difficult to obtain. They should seriously consider a debt consolidation loan whilst this option is still available for them.

Over 3 million people have taken out a debt consolidation loan in order to manage their overflowing debt crisis. This may be the perfect option for people who have reached their limit with other forms of borrowing and are looking for a form of lending which will consolidate all of their debt into one, manageable payment.

Debt consolidation is a perfect way to alleviate debt but it has to be managed properly. During 2006, over two-thirds of people decided to borrow from other sources and clocked up an extra £2,300 whilst paying off their debt consolidation loan. On the other hand, a debt consolidation loan can be a perfect way to ease the worry of outstanding debt and leave you with enough spare cash to start up a proper savings plan to set you on the right financial footing for 2008.