Wednesday 21st May, 2008 

Nearly 1.4 million Britons have had their applications for unsecured loans turned down in the last 6 months.

Latest figures reveal that the impact of the credit crunch does not only make it difficult to obtain a loan but it is getting more expensive as lenders raise their rates. This spells bad news to those who use debt consolidation as a debt management stratgey.

This increase in rates and reduction in availability is designed to reduce the UK's huge debt mountain. However, this news does not only impact on those who use debt consolidation but it also impacts on those who use credit to buy new cars or for home improvements. The consequence of this will be felt in the tills of the high street and businesses which rely on our high spending economy.

Debtwatchdog is concerned about impact of this belt tightening by lenders as a result of the credit crunch. Even with a three quarter percent rate cut the bank of England is struggling regain confidence of the financial institutions who have increased their rates for loans. These actions will spell disaster for those who are using their credit cards and unsecured loans to keep their heads financially above water. Where debt consolidation was a manageable alternative to making ends meet it's now a cause of great concern.

Debt consolidation should only be considered if you are committed to taking control of your finances. If you do not have a handle on your spending you will just make matters worse and increase your debt will the possibility of insolvency being very real. Find helpful tips and help on our debt forum.