More often than not people, who are looking to consolidate their debts with a secured loan, have already stretched their finances too far. People in heavy debt try to ease the burden of their monthly payments and the hassle of dealing with multiple creditors by consolidating all their debt into one payment.

People taking out debt consolidation loan agreements repay an average of around 113 per cent of their salary, so spreading payments across a greater loan term with a secured loan might be a viable option for some people.

However you should bear in mind that the average level of debt in the UK is around £27,000 and the average age of people in debt is 43 years old. This means that most people have built up debts greater than their annual salaries, which is a dangerous financial position to be in.

The banks ask people to repay, on average, around 70 per cent of their monthly income and the reality is they can only afford 18 per cent. With the January financial hangover being realised by some people this is a completely untenable situation, both from the bank’s and consumer’s point of view.

If people simply cannot afford to make repayments no matter how much they cut back they really should seek professional debt management advice.

For those people who still have a manageable level of debt it’s surely time to start reducing any debts before they become too much to manage.