Debt Consolidation FAQ

Find answers to frequently asked questions about debt consolidation

Debt consolidation could help you to:

  • Pay less every month
  • Simplify your finances
  • Manage your money better

Have any questions?

Call 0800 970 7673 or fill in our simple form to recieve a no obligation call back from a friendly, experienced adviser.

Fees & Key information

Find out more about the fees involved with each debt solution.

Find out if you qualify for Debt Consolidation

Tell us about your situation

Tell us about you

Useful free guides

Download the Insolvency Service guide to dealing with lenders.

Download the information package from Scotland’s Insolvency Service.

Need debt advice?

Call 0800 970 7673or fill in our simple form to receive a free no obligation call back from a friendly, experienced adviser.

What exactly is a debt consolidation loan?

It's a loan that can be used to repay multiple existing debts. By doing that, you're basically rolling them into one - leaving you with one easy-to-manage monthly payment.

A debt consolidation loan could also help you to reduce your monthly outgoings if you choose to repay it over a longer period than your original debts (but keep in mind that this could increase the overall amount of interest you pay).

How could it reduce my monthly payments?

Basically, the longer your repayment period, the smaller each payment will be. Call 0800 970 7673 for details of how it could work for you - or fill in the callback form on this page and an adviser will phone you.

Can it help with my debt problems?

Debt consolidation loans aren't designed to help with serious debt problems - there are other debt solutions for that.

Debt consolidation loans are intended for people who want to make managing their finances simpler and/or reduce their monthly outgoings.

How can I get a debt consolidation loan?

You can actually consolidate debts with any loan, but searching for a good deal takes time. Our partners can search a wide range of lenders on your behalf, to help you find a deal you're happy with. They can also offer practical advice on managing your debts.

However, debt consolidation loans aren't the best solution for everyone. Trying to manage your debts without seeking expert advice beforehand could cause problems further down the line, so it's well worth talking to an expert before you start - and finding out which solution is best suited to your needs.

Can a debt consolidation loan be used to pay off secured debts?

Yes. A debt consolidation loan can be used to repay any kind of debt.

Whether your debts are secured or unsecured won't be an issue, because you're not making any changes to your actual repayment arrangements - you're simply paying off existing debts and replacing them with a new loan.

Will it harm my credit rating?

No - in fact, it could help to improve it.

Other debt solutions may harm your credit rating if they involve making smaller payments towards your debts than you originally agreed, as you're defaulting on them (no longer sticking to the agreement). However, repaying your current debts with a debt consolidation loan doesn't mean your defaulting on them: you're just paying them off in full, using a new loan. In fact, consolidating your debts gives you a chance to have a good think about how much you can comfortably afford to repay each month - and this can help you stay on top of your payments and protect your credit rating.

Of course, failing to meet your debt consolidation loan repayments would damage your credit rating - so only take out a new loan if you're sure you can afford to pay it back.

Can I get a debt consolidation loan if I have a bad credit rating?

It's possible, but it might be difficult. Lenders are more cautious than they used to be and there are no guarantees that your application will be accepted. And even if it is accepted, you're likely to be offered a higher interest rate if your credit rating is poor.

Consider how your interest rate will affect your overall costs before you take out a debt consolidation loan.

What are the disadvantages?

Like any debt solution, a debt consolidation loan has some disadvantages. In particular, it could cost you more in the long run if you choose to repay your debts over a longer period of time than your original debts.

However, you may consider this acceptable if it means lower month-to-month costs.

Finally, remember that securing other debts against your home means you risk losing your home if you can't keep up with your repayments.