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Debt consolidation

Paying off your existing debts with a loan (debt consolidation) could:

  • Reduce your monthly payments or interest rate
  • Pay off your debts faster
  • Create one single monthly payment

Read our helpful guidance below to decide if it's the solution for you. In particular, extending the term of your debt can incur more interest and cost more in the long run, and sometimes an Early Repayment Charge may apply.

Our BEST EVER loan offer,
Representative 4.9% APR
for loans of £7,500 to £14,950.

Other loan amounts are available at alternative rates. Rates depend on circumstances and loan amount.

Loans available to existing RBS current account customers aged 18 or over.

Helpful debt consolidation steps

Follow 3 simple steps to see if a personal loan for debt consolidation can help you:

1. Figure out the facts
List your current debts, monthly re-payments, and interest rates (found on recent statements). This helps you compare your debts against the options.

2. Consider your alternatives
Do you have savings you could use to reduce the debt? This could be cheaper than taking a new loan.
If you're struggling with your re-payments consider talking to the lenders you owe money to, it's in their interests to help you out.

3. Read the section that's relevant to you:

I want to save money and pay off my debt faster

Option 1. Move or consolidate your debt into a loan with a lower interest rate.
Paying off your debt with a new loan at a lower interest rate could save you money. Keep the new loan's repayment term the same as your existing loan - or ideally shorter - to maximise your savings.

This can be particularly effective for high cost debt such as credit cards, store cards, or overdrafts which typically have higher interest rates than personal loans.

Use our loan calculator to compare the cost of our loans with your existing debt.

Option 2. Increase your monthly payment amount.
Increasing the amount that you repay each month should mean that you pay your existing debt off faster, saving you interest costs.

The terms of your existing debt might mean you can't make additional payments. If so, paying off your existing debt with a new loan with a shorter repayment term achieves the same if the new interest rate is similar or lower than your current debt.

Our budget planner can help you calculate your maximum monthly repayment.

I'm finding it hard to meet monthly payments

It's important to consider your alternatives. Using savings you may have to reduce your debt or contacting your existing lenders (it's in their interests to help you) may help.

Option 1. Move or consolidate your debt into a loan with a lower interest rate.
Paying off your debt with a new loan at a lower interest rate could save you money. Keep the new loan’s repayment term as short as possible to maximise your savings.

This can be particularly effective for high cost debt such as credit cards, store cards, or overdrafts which typically have higher interest rates than personal loans.

Use our loan calculator to compare the cost of our loans with your existing debt.

Option 2. Extend the term of your debt.
A new loan with a longer re-payment term should reduce your monthly payments. It's very important you consider this option carefully: extending the loan term may reduce your monthly repayments, but overall it is likely to increase the total amount, including interest, which will have to be repaid.

Our monthly budget planner can help you work out the maximum re-payment you can afford - then our loan calculator can help you pick a matching loan re-payment.

If you've read the above and a loan for the purposes of debt consolidation could help:

Links and tools:

External links:

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