The pros and cons of secured vs. unsecured loans
When you’re in need of financial assistance, loans can be a valuable resource. However, before you borrow, it’s essential to
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- Check your eligibility from a range of loan providers
- Apply today and borrow between £1,000 and £50,000
Why compare debt consolidation loans
Find out which loans you are eligible for without harming your credit score and apply online.
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What is a debt consolidation loan?
A debt consolidation loan can simplify your monthly finances by combining existing debts into one manageable payment – with one lender, one interest rate, and one clear repayment plan.
Compare options from trusted UK lenders and find a loan that fits your budget and your goals.
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Struggling to manage multiple repayments?
A debt consolidation loan allows you to combine several existing debts, such as credit cards, overdrafts, or other personal loans, into a single loan with one monthly repayment.
This can help:
Make repayments easier to manage
Potentially reduce your overall interest rate
To avoid late fees and missed payments
Give you a clearer timeline for becoming debt-free
It’s important to note: a debt consolidation loan does not reduce the total amount you owe, but it may help you manage your repayments more effectively.
What to consider before applying for a debt consolidation loan
Will I save money overall?
Compare the total cost of your existing debts against the new loan offer.
Can I afford the monthly repayments?
Use a budget planner to be sure.
Are there any early repayment fees on my current debts?
Check with each existing lender before consolidating.
Am I improving my financial situation long-term?
The goal is to simplify and reduce, not extend, your debt.
Start comparing today
Whether you're looking to simplify your repayments or lower your monthly outgoings, a debt consolidation loan might help you regain control. Always compare carefully and consider if it’s the right option for your financial situation.
It’s quick, secure, and won’t affect your credit score.
Is a debt consolidation loan right for me?
Using a loan to consolidate your existing debts can make repayments simpler and, in some cases, reduce your monthly outgoings. However, it’s an important financial decision and one that should be considered carefully.
If you’re thinking about using a new loan to repay existing credit cards, loans or other debts, it’s important to look at more than just the interest rate or the size of your new monthly payment. Take time to compare the overall cost of the new loan with your current arrangements.
A longer loan term may reduce what you pay each month, but it could mean paying more overall – even if the interest rate is lower than what you’re currently being charged. You should also check whether your existing lenders will apply any early repayment charges.
Debt consolidation isn’t the right choice for everyone. Think about whether it’s affordable for you now and in the long term, and whether it supports your wider financial goals.
FAQ
Need more help?
Will applying for a debt consolidation loan affect my credit score?
When you compare through MoneySpider, we use a soft search, which won’t impact your credit score. If you go on to apply directly with a lender, they may run a hard credit check, which could appear on your credit file.
Can I consolidate all types of debt?
Most unsecured debts can be consolidated, including credit cards, store cards, overdrafts, and other personal loans. You cannot usually include secured debts like a mortgage or car finance unless you’re taking out a secured loan (which comes with added risks).
Do I need to have a good credit score to qualify?
Not necessarily. Some lenders offer debt consolidation loans to people with less-than-perfect credit. However, your credit history can affect the interest rate and terms you’re offered.
Will I definitely save money by consolidating my debts?
Not always. While a single repayment can be more manageable, it’s important to compare the total cost of borrowing, including fees, to ensure it’s cost-effective for you. Always review your options carefully.
Is a debt consolidation loan the same as a debt management plan?
No. A debt consolidation loan is a form of borrowing – you repay the loan over time with interest. A debt management plan (DMP) is a structured agreement with creditors, often through a third party, and may affect your credit rating more significantly.
Helpful guides & articles
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How to choose the right type of loan
Choosing the right type of loan is a critical financial decision that can significantly impact your financial well-being.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured against it.
