Tuesday 5th February, 2008 

The impact of the credit crunch does not appear to have affected interest rates, says personal finance magazine.

Moneywise warns those who are considering a debt consolidation loan and have a good credit rating not to touch homeowner loans with a barge pole. Interest rates for unsecured debt consolidation loans are "around the 6.6% to 6.8%" claim the magazine. A spokesman states that these interest rates are better than homeowner loans in two ways. Firstly the rates are low and competitive and secondly defaulting on them means that you will not lose your house.

Debtwatchdog, cautions those against using debt consolidation as a means of debt management where you carry on borrowing. Debt consolidation should only be used as a means of reducing your monthly repayments in order that any surplus will be committed to reducing the debt.

Debtwatchdog is concerned that many people are still confused about the difference between unsecured and secured borrowing. A secured loan or homeowner loans means that the debt consolidation loan is secured against your home and will be repossessed if you fail to make repayments.

Contact us on 0800 970 2698 if you are struggling to make repayments on debt consolidation loans or credit card loans. Alternatively, you can visit our forum where you'll get lots of advice on budgeting and how to manage your debt problem.