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Typical APR 14.7% APR Variable, 2 out of 3 secured loans customers will receive this rate or lower

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What is Debt Consolidation?

Debt consolidation is something that is rarely understood by a large number of people, which makes them reluctant to consider it as a means of improving their financial situation! To consolidate quite simply means to combine several things into one larger thing. As such, a debt consolidation loan is one larger loan that is used to consolidate (merge together) all existing loans and credit card debt. This means that you will only have one monthly repayment to make instead of many. The main benefit of this is that it will usually reduce your monthly commitments every month. This in turn will reduce stress and improve your quality of life, as you no longer have the worry about how you are going to manage to pay all of your bills.

Another benefit that is often overlooked is the fact that a debt consolidation loan, if managed properly, will actually improve your credit score. In fact, it is not unusual for many people to believe that debt consolidation will actually harm it. You need to understand how a credit score is made up before you see that it is actually beneficial. A credit rating is made up of a number of factors. However, probably the most critical one is maintaining regular monthly repayments, and this is made easier after consolidation because they will be significantly less. Another crucial factor is the size of the gap between your credit limit and the amount you have used. Because of this, if you were to consolidate all your outstanding credit card debts into a cheaper debt consolidation loan and refrain from using them again, you will have improved your credit rating on two counts i.e. you are now able to comfortably meet the repayments for your new consolidation loan, and you have significantly more unused credit.

You should however be aware that although the monthly cost will be cheaper, the actual cost of repaying your outstanding debt may well be more. This is because you will probably be extending the loan term to make the repayments more affordable. Because of this probably the best course of action is to take out a loan that has no penalties for overpayment and set the term so that you can easily afford the repayments each month. In that way you can make extra payments to your new loan when you have some spare cash, which will have an impact on the total cost of your loan.

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Other Debt Options

Because debt consolidation may not always be available or the best solution, we have teamed up with one of the country's leading providers of debt solutions. They offer a free initial consultation, and dependent on your particular financial situation will offer you a solution from a variety of debt options available to them. Including but not limited to "Debt Management Plans" and "IVA's". It is worth noting that either of these options will have an adverse impact on your credit rating. That being said it will probably have a least significant impact than not doing anything about your situation.

Rates from 5.59% APR, to 31.6% APR are available, our highest rate is for customers with severe adverse credit problems. A fee of up to 10% may be charged by some of our partners on completion of your loan. All loans are subject to status and available to UK residents aged 18 or over. Secured loans are only available to homeowners with a mortgage.