Consumers in the UK should make sure they do their research and choose the right kind of loan or balance transfer to consolidate their debts.
That's according to Moneyfacts, which warned that in order to benefit from debt consolidation loans, borrowers must ensure they know exactly how much they will cost.
"Consolidating your debts onto one loan can prove an ideal solution. It could cut your monthly payments and see your interest bill lower," said Lisa Taylor from Moneyfacts.
"Also for those less disciplined, the fixed monthly repayment might offer the structure you need to commit to repay the debt within a given time."
She said that often a person's current bank or lender may not have the most competitive deals to offer, so it is worth shopping around.
"Remember, a personal loan is usually a large long-term fixed financial commitment, so don't blindly plump for the first deal you see," she advised.
Recent research from uSwitch revealed that UK borrowers pay £93 billion in interest every year on various forms of credit, but they could save £15 billion by consolidating.
