In almost all debt situations the question of taking out a further loan to repay a debt will confront you. The advice you will receive from most debt counsellors would be an emphatic ‘NO’. But that is not always the most realistic answer to debt. Sometimes taking out a further loan can be a good long-term answer, as well as an obvious short-term solution.
If you are in employment, and your position is secure, you need to work out your finances in a similar way to the Income & Expenditure Statement. If you find that taking out a five-year £5,000 loan at £120-130 per month will settle debts that cost, say, £300 per month at present, you should take out the loan (together with learning your lesson).
If you have debts through weekly collected credit (supplied through door to door loan sales/collectors) the loan rates are normally (nearly always) too high to consider taking further loans to reduce a debt (whatever they may tell you). However, obtaining a loan through lenders with acceptable rates to pay off a door collector should be considered. Many weekly loan customers are of an acceptable standard to major loan services but they have never tried to get a loan as they carry on a family tradition of weekly loan credit.
The two questions that you need to answer are:
Is a further loan a long-term solution?
Am I serious about getting out of debt?
If you answer no to either question, avoid any further debt.