Align your finances today, for a simpler tomorrow

A debt consolidation loan is a loan that’s used to pay off other forms of credit. You could pay off:

• multiple loans
• credit cards
• store cards
• overdrafts

And this way you’re just making one monthly repayment to a single lender. This should hopefully simplify your debts by keeping it all in one place so it’s easier to manage.  

Did you know if you’ve been consistently making repayments on your current credit product then your credit score might have improved? So, you could pay off your borrowing (like loans, credit cards, overdrafts) with a debt consolidation loan that has a lower APR. This means your interest rate will be lower, potentially saving you money. 

36.8% APR Representative (fixed)

Whatever the need, we can quickly match you with accurate personal loan options that are tailored to you. Find personal loans from £500 to £50,000 over a minimum of 1 year to a maximum of 8 years, with interest rates ranging from 6.1% APR to 222.6% APR. Representative example: 36.8% APR Representative based on a loan of £12,500 repayable over 48 months at an interest rate of 36.8% pa (fixed). Monthly repayment of £500.83. Total amount repayable is £24,039.67.

If you’re thinking of consolidating your loans, credit and store cards into one, you should know that it might mean extending the term of your debt, as well as increasing the total amount you repay.

For even more information about debt consolidation see our helpful blog post about what debt consolidation is. Why should I consider a debt consolidation loan?

If you have multiple debts (loans, credit cards, overdraft, etc.) and are struggling to repay them all each month, then consolidating those debts into one payment could make managing your finances a little easier.

A debt consolidation loan groups all your different debts together. This could mean:

• You have manageable monthly payments
• You have more time now you aren’t organising different repayments 
• Your budgeting is made simpler 
• Your overall monthly repayments could be reduced 
• You could save money by switching to a loan with a lower APR
• You could reduce your monthly repayments by spreading them out over a longer term, but this might increase the amount of interest you pay back overall
• You could reduce the term of your debt and save money on interest rates
• If you don’t keep up with repayments throughout the term of your contract, then it can negatively affect your credit score. However, with just one monthly repayment to remember, you may find it easier to stay on top of your finances

Also, regularly repaying a debt consolidation loan on time could help improve your credit score in time.

If you have multiple debts (loans, credit cards, overdraft, etc.) and are struggling to repay them all each month, then consolidating those debts into one payment could make managing your finances a little easier.

A debt consolidation loan groups all your different debts together. This could mean:

• You have manageable monthly payments
• You have more time now you aren’t organising different repayments 
• Your budgeting is made simpler 
• Your overall monthly repayments could be reduced 
• You could save money by switching to a loan with a lower APR
• You could reduce your monthly repayments by spreading them out over a longer term, but this might increase the amount of interest you pay back overall
• You could reduce the term of your debt and save money on interest rates
• If you don’t keep up with repayments throughout the term of your contract, then it can negatively affect your credit score. However, with just one monthly repayment to remember, you may find it easier to stay on top of your finances

Also, regularly repaying a debt consolidation loan on time could help improve your credit score in time.

• Credit cards
• Store or retail card debts
• Overdrafts
• Medical bills
• Student loans
• Other unsecured personal loans

There are debts like mortgages that can’t be covered by debt consolidation loans.

The amount you can borrow will vary from lender to lender. The maximum you can consolidate will also depend on your personal circumstances, like your credit score, affordability and the lenders own criteria. 

Want more information about loan amounts? Check out this guide to how much you can borrow.

Yes. A debt consolidation loan can be secured or unsecured. If the debt consolidation loan is secured, it’s secured against an asset like your property. Lenders can view your application as lower risk, because they know they can collect the money you owe from your assets. So, this means a secured loan could have lower interest rates than an unsecured personal loan, giving you lower monthly payments.

Want to learn more about secured loans? Head over to this secured loans guide. 

Please be aware that there are risks with secured loans. Think carefully before securing other debts against your home. Your home may be repossessed if you don’t keep up repayments on a mortgage or any other debt secured on it.

The risks associated with debt consolidation loans are the same as with most other types of loans. If your loan repayment is late or missed, then it can affect your credit score. Likewise, if the loan is secured and it’s defaulted on, then your home or asset may be at risk.

For more information about late or missed repayments, read this guide about if you can’t repay a loan.

When a lender is deciding whether or not to offer you a loan, they’ll use your credit score and their own criteria. If you’ve been rejected for a debt consolidation loan there are quite a few reasons why this could happen:

• You’ve missed payments (these are often called ‘defaults’) for loans or credit in the past
• You’ve made several credit applications over a short space of time
• You’re not on the electoral register (which lists the names of everyone registered to vote). Lenders use this to confirm your address and where you have lived before
• You’ve recently moved into a new house or have a new job
• You don’t have any previous borrowing history

Want to learn more about credit scores? Look no further than this blog post all about boosting your credit score. 

Yes. An independent organisation called the Money Helper offers free, impartial advice. Call 0800 011 3797 or visit the Money Helper website.