Debt Consolidation
Learn more about Debt Consolidation
What is Debt Consolidation?
You apply to a lender for a loan to reorganise, or clear your debts. These loans are often advertised as ‘consolidation loans’. This means you swap some or all of your creditors for just one creditor.
If you own your home, the lender will probably want to take a charge on it. A charge on your home means that if you don’t repay the debt the creditor has a claim on the proceeds if the property is sold.
You should seek independent advice about whether this would be in your best interests. You should shop around for the best deal from high street and internet lenders. If you have a poor credit rating, you may not be able to get loans on the best terms.
How does Debt Consolidation work?
A consolidation loan will only help if:
- It is used to pay some or all of your existing debts
- The repayments on the new loan are no more than those you are already making towards your existing debts, and you can afford to make them
Otherwise, the new loan will simply add to your debt burden and make your problems worse.
You will also need to look very carefully at how long the loan will take to repay; what interest you are going to have to pay compared with what you are currently charged; and what charges or penalties there are, for example for late payments.
Benefits and Considerations of Debt Consolidation
Benefits of a Debt Consolidation
- If you can raise sufficient funds to pay all your creditors you will make one monthly payment on one loan rather than many payments to different creditors
- Your monthly payments should be lower or at least not any higher
- The term of the loan is defined
Considerations of a Debt Consolidation
- Upfront arrangement fees may be payable for arranging the loan. Ensure you ask for details of all fees
- If your credit rating is poor you may not be able to obtain a loan or may be offered poor terms such as a high interest rate
- If you are a homeowner and the loan is secured on your home then your home may be repossessed if you default on the monthly payment
- Consolidation loans are often offered over a longer period of time than your original debts. This could mean that even if the interest seems reasonable you may end up paying more than your original amount owed due to the length of time you have to repay
- If you don’t clear all your creditors with one loan the new loan is likely to worsen your debt problems and make it more difficult to make all your monthly repayments
Other Debt Solutions
This page is for informational purposes only. At UK Debt Service we specialise in Individual Voluntary Arrangements (IVA), which is an alternative debt solution to Debt Consolidation.
This page is for informational purposes only. At UK Debt Service we specialise in Individual Voluntary Arrangements (IVA), which is an alternative debt solution to a Debt Consolidation.
We're here to help people get debt free
At UK Debt Service we specialise in helping people become debt free.
Our advisers are here to listen and help you understand the options available based on your individual circumstances to see which debt solution is most appropriate.
Start your journey towards a debt free future today and see which solution suits your needs.
Speak to a debt solution specialist on 0161 823 4974 or complete the form and we will call you back.
This may not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
We're here to help people get debt free
At UK Debt Service we specialise in helping people become debt free.
Our advisers are here to listen and help you understand the options available based on your individual circumstances to see which debt solution is most appropriate.
Start your journey towards a debt free future today and see which solution suits your needs.
Speak to a debt solution specialist on 0161 823 4974 or complete the form and we will call you back.
This may not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Debts we can help with
We can help with unsecured debts including the below and more
Council Tax Arrears, HMRC debt & benefits overpayment
Payday loans, bank loans & overdrafts
Credit cards, store cards & catalogues
Bailiff Enforcement & Debt Collector Action
County Court Judgments (CCJs) & Attachment of Earnings
Creditors we deal with
We deal with all major creditors in the UK
Service you can trust
We pride ourselves on delivering the highest level of service to help people start their journey to becoming debt free.
Read real reviews of our service on Trustpilot and Feefo.
Start your journey towards a debt free future today.
Speak to a debt help expert now on 0330 320 0827 or complete the form and we will call you back.
They have been so helpful and understanding best thing I did. Excellent worth every star
D White, Feefo
Service you can trust
We pride ourselves on delivering the highest level of service to help people start their journey to becoming debt free.
Read real reviews of our service on Trustpilot and Feefo.
Start your journey towards a debt free future today.
Speak to a debt help expert now on 0330 320 0827 or complete the form and we will call you back.
They have been so helpful and understanding best thing I did. Excellent worth every star
D White, Feefo
How to get started in three steps
We will guide you every step of the way to help you get back to enjoying life knowing you're in control of your debts
Contact us
Complete the online form or call us on 0330 320 0827
Talk to the experts
Talk with us so we can understand your circumstances and take you through your options
Make an informed decision
We'll give you all the information you need to make an informed decision
This may not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Take the firsts steps towards a debt free future
Start your journey to a debt free future today. Complete the form and one of our expert advisers will call you back.
Our initial advice is provided free of charge and there is no obligation to proceed with our recommendations. All financial solutions are subject to eligibility and acceptance and depending on your chosen solution. UK Debt Service specialises in Individual Voluntary Arrangements (IVAs), but this may not be suitable in all circumstances. If you choose to proceed with an IVA fees apply and your credit rating may be affected.
Free debt counselling, debt adjusting and providing of credit information services is available. You can find out more by contacting Money Helper.
Free debt counselling, debt adjusting and providing of credit information services is available. You can find out more by contacting Money Helper.