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Debt consolidation

Debt consolidation is when you take out one large loan to pay off your other debts.

If you consolidate your debts you take out a large loan that repays all of your smaller debts. You make one payment per month to this, rather than lots of different payments throughout the month. Consolidation loans can either be unsecured or secured (secured loans are only available if you're a homeowner).

Debt consolidation can be risky and could leave you in a worse financial situation. We can give you expert debt advice that’s tailored to your situation. Use our online Debt Remedy tool or call our free Helpline on 0800 138 1111 as we may be able to find a better solution for you.

If you’re considering debt consolidation, you need to work out how much you can reasonably afford to pay each month.

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Things to consider when consolidating debt

You need to budget enough every month to cover all your household costs. You shouldn’t use any more credit until you’ve repaid the consolidation loan in full.

If you’re in arrears with your current creditors, your credit rating is likely to have been affected. This may mean that you’re unable to get a loan at a good rate of interest.

It’s important that you understand how much you’ll pay for the loan in full. If you extend the loan over a longer term than your original debts you’ll be paying more in interest and so increasing the amount of debt you have.

We recommend that you don’t consolidate your unsecured debts - such as credit card debt or personal loans - by taking out a secured loan, which will secure the debts against your house. This means that if you fall behind with the payments in the future, your home will be at risk of repossession.

Before you take out a consolidation loan use our online Debt Remedy tool or call our free Helpline on 0800 138 1111 as we may be able to find a better solution for you.

Better solutions

If you are having difficulties in paying your creditors, there may be better solutions to your situation. You can use our online Debt Remedy tool, which will provide you with the most appropriate solution to your debt problem. Alternatively contact our free Helpline on 0800 138 1111.

Debt consolidation FAQs

Can you offer me a consolidation loan?

We don’t offer consolidation loans. These can be risky as they usually leave you in a worse financial situation. To find a better way of dealing with your debts call our Helpline or use our online Debt Remedy tool.

What is a secured consolidation loan?

If you're a homeowner you can get a secured loan that attaches the debt to your property. Although secured consolidations have lower rates of interest if you miss payments to them your home will be at risk of repossession.

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