Consolidation Loan

With a consolidation loan, all your unsecured debts are combined into a single monthly repayment.

This may be easier for you to manage, instead of making multiple payments to creditors, all your repayments are combined into a single payment. And by combining your repayments, your interest rate may be reduced.

However, any missed payments can lead to legal action against you from lenders, and repayments are often spread over a much longer period, meaning you may end up paying more in total.

But why choose a consolidation loan?

Simplified repayment

One of the primary benefits of a consolidation loan is that it simplifies the debt repayment process. Instead of juggling multiple debts with varying interest rates and due dates, you can combine your debts into a single manageable loan. This streamlines finances and reduces the risk of missing payments and incurring further charges. 

Lower interest rates

Many consolidation loans come with lower interest rates compared to credit cards or other high-interest debt solutions. By consolidating debts, you can potentially reduce the overall cost of their debt over time, as more of the amount you pay goes toward the principal balance rather than interest.

Improved credit score

Responsible management of a consolidation loan can positively impact an individual's credit score. As you make on-time payments and reduce your outstanding debt, your creditworthiness improves. A better credit score can lead to more favourable terms on future loans and financial products.

Consolidation loan considerations

Approval

There is no guarantee that the application will be approved and in some cases a guarantor may be needed.

Missed Payments

If you fall behind with your repayments, a lender can take legal action against you to recover the debt, which will have a negative impact on your credit rating

Timescale

The repayments can be spread over a much longer term, which may mean you pay back more in total.

Debt Help UK

  • After receiving our help, a typical customer's debt would benefit from the below.
  • Lower monthly payment
  • Stop Interest & Charges
  • Only 1 monthly payment
  • Stop creditors taking legal action
Let us help you