Overwhelmed with lots of debt in lots of places?

A debt consolidation loan could roll your debt into one monthly payment. 

You'd get one bigger loan to clear your other debts – from credit card debt to an overdraft or other loans. 

The pros of a debt consolidation loan:

• It could be simpler to manage your money – you'll have just one monthly payment. (This is usually easier than juggling different payments that leave your account at different times.)
• You'll pay the same amount each month – the interest rate is fixed, so it won't change. This helps you know where you are with your finances.
  
• At the end of the loan, you'll have cleared this debt (as long as you keep up with repayments) – this could be easier to manage than an overdraft where it could be easy to stay overdrawn. Or credit cards, where it could be tempting to pay just the minimum each month and continue spending. 
• You'll often pay less each month – if you spread your loan over a number of years, your payments could cost you less each month.
• You could save money - if the interest rate on your current debt is more expensive that the debt consolidation loan, the debt could cost you less.  

The cons of a debt consolidation loan:

• You're not debt-free. You've just moved your debt – you've replaced lots of different debt with one big loan. If you don't manage your money well, you could end up in even more debt.
  
• Currently got a loan? There might be an early repayment fee – you could save money if your new loan has a lower interest rate. But if you're closing an existing loan, there might be an early repayment fee. So remember to include this in your calculations.
• The loan could cost you more overall – you may pay less each month,  but the total cost might be more expensive due to interest. This depends on your circumstances. Including how much your borrowing cost before, what your new borrowing rate is, and how long you borrow for.
  
• You must pay back your loan in full each month – unlike a credit card, you can't just pay the minimum. You must pay all your monthly payment. If you don't, you could be charged a fine. It could also harm your credit score, which could make it harder to borrow in future.
• You need to address why you got into debt - if you're struggling to stay on top of your debts, one large debt might be hard to pay back too. You might need to change your behaviour or circumstances to get debt-free for good.
  
  

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A debt consolidation could help you seize control of your finances.

It could make things simpler as, rather than juggling lots of different debt, you'll just have one loan.

You'll also pay back the same amount each month at the same time, so it's easy to keep track.

Then – at the end of the loan – you could be debt-free. 

But please take care... 

A debt consolidation loan doesn't clear your debt. It just moves it.

To become debt free, you'd need to pay off this one bigger loan and not borrow anything else on top. 

This often means you need to look at the reason you got into debt in the first place – and tackle this.

Want free, confidential money help?

If your debt is stressing you out, it could help to chat to debt experts.

We work with PayPlan who offer free independent debt help.

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Checking if you could get a loan from us won’t affect your credit score.

We just do a ‘soft search’. This won't show on your credit file.

If we say ‘yes’ and you choose to apply, we’ll do a ‘hard search’.

This shows on your credit file and could affect your credit score for a short time.

Having a loan could help boost your credit score – or lower it.

• You could boost your credit score – if you pay your loan back on time each month.
• You could lower your credit score – if you don't pay back your loan on time each month.