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Debt consolidation loans

Government debt consolidation loans and advice

Some companies use phrases like ‘Government debt consolidation’ or ‘Government debt advice’ to sound more official. But the UK government does not offer debt consolidation loans. There are some government-backed ways to deal with debt though.

What is meant by ‘government debt consolidation loans’?

This phrase is often used by companies to make you think they offer free debt consolidation. It also makes it sound like the government has something to do with their business. But these companies charge a fee to provide the same services that are free from charities like us.

Similar companies will ask for fees to set up an individual voluntary arrangement (IVA) without telling you all the options to help you deal with your debt.

The government does not offer debt consolidation loans

But there are some government-backed ways to deal with debt. The UK and Scottish governments have introduced some ‘formal debt solutions’. This means they are legally binding arrangements.

These debt solutions include:



Some companies pretend to be us online and on social media. They have names like ‘Step to Change’ or ‘Step Changing’. They can also pretend to be other charities to make it seem like you can trust them.

Make sure it is us you are dealing with

Is it a good idea to get a consolidation loan?

Consolidating debt can work for some people, but not everyone. There could be other options to deal with debt that help you more in the long run.

Debt management is often an alternative to consolidation because the pros are quite similar. But they are different ways of dealing with debt.

Find out more about debt consolidation and debt management.

There are other ways to feel more in control of your debt than taking out a loan to consolidate debt. Use our debt consolidation calculator to find out if debt consolidation or debt advice is right for you.

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Can the government write off my debt?

Insolvency is a government-backed way to write off some of your debt. When you write off debt, you get rid of a debt without having to pay it off in full.

But many of the solutions involve making payments for set amount of time before the rest of the debt is written off.

Some of the insolvency solutions include:


  • Bankruptcy (or sequestration in Scotland)
  • DRO (or MAP bankruptcy in Scotland)
  • IVA
  • Protected trust deed (PTD) in Scotland

Insolvency is a legal process that does have risks to be aware of. Find out more about writing off debt with a debt solution.

Is there a government scheme to help with debt?

Breathing Space is a government scheme that gives you time to get debt advice and start a solution. It is sometimes called the Debt Respite Scheme and is available in England and Wales.

The scheme protects you while you seek debt advice and work towards getting a debt solution.

It is not a payment holiday and does not write off debt. The scheme is designed to help you take a break from creditor contact while you start to sort out a debt solution. Ideally from a trusted organisation or charity, like us.

Find out more about how Breathing Space works.

If you live in Scotland you may be able to apply for a debt moratorium period while you set up certain debt solutions. It is like Breathing Space but has different risks and benefits.

Debt consolidation for poor credit

If you have a poor credit score or a rocky credit history, you will likely pay higher interest rates and may not be offered the best debt consolidation deals.

Secured consolidation loans are easier to get approved for. But they come with much higher risks if you are not able to pay them back.

Read our guide to consolidation loans with poor credit.

We are here to help

To see if debt consolidation or debt management is right for you, it is best to get free and impartial debt advice.

Our advice:


  • Is free and impartial
  • Is available 24/7 online
  • Has no impact on your credit score

Start, stop and begin again at a time that suits you.

Debt happens. We deal with it.

We have helped millions of people since 1993.

Find out how.


"No longer needing to borrow money from friends and family."

“Having all my debts coming out in one lump sum and cheaper than trying to pay all my credit cards separately is perfect. I finally have some of my own money to contribute towards bills.”

Evie, Feefo Review