The first few months of any new year are peak times for the debt consolidation loan market and people are being advised to shop around as their are good deals to be had.
With the multiple debts that people tend to wrack up at the end of every year, a debt consolidation loan is a great way to tie them all together in one affordable monthly sum.
However, many people will rush head first into the first loan they're offered according to uSwitch, without even looking around for a better rate of interest.
A report issued by the price comparison site commented: "The difference between the best and worst interest rates can be almost double, so choosing the wrong loan provider can be a costly mistake."
The pitfall that many people fall into is thinking that the typical APR quoted is actually what they will pay. However, providers will often charge higher than this rate depending on your financial background.
Another good tip is to see if borrowing slighltly more money will save you money in the long term. For instance a provider might charge 4.7% interest on borrowing £4500 but only 3.9% on £5000 which could actually work out cheaper.
The bottom line is that when shopping around for a debt consolidation loan, do just that, shop around. Do your research and when you think you've found the best deal make sure you ask all the questions. Remember, a debt consolidation loan is supposed to reduce the amount of debt and stress you have to deal with.