Debt Consolidation Loans

Debt consolidation is a way to combine several debts into one single form of credit. This can be useful for people with multiple debts with different lenders who want to reduce the number of repayments they need to make each month. Depending on the type of debt a person has, consolidation may also help to reduce the total amount of interest they are charged, though the monthly repayments may be higher.

Consolidate credit card debt

Debt consolidation can be a way to combine debts from several credit cards. A balance transfer is often the first choice for credit card consolidation as it allows users to shift the balance of one or more cards onto another card with a lower interest rate. While these do tend to incur a fee, they often have an attractive 0% interest period for a limited time which could help pay down debt faster. Those with poorer credit might find that balance transfers are inaccessible to them, so they look to loans to pay off credit cards instead.

Debt Consolidation Loans

An option for consolidating debt is a consolidation loan. A new loan that is equal to the total cost of settling other debts, including any fees or charges for settling early, can be used to pay off other debts. This leaves one single repayment to make each month which can be easier to maintain and keep track of.
In order to find the best debt consolidation loans, a comparison site could be useful to compare the different options available. Some of these also offer a pre-approval system that displays which loans a person would be accepted for without risking a mark on their credit file.

Debt consolidation loans for bad credit

Those with a rocky credit history might be looking for consolidation loans for bad credit. Some lenders specialise in debt consolidation for bad credit by having lower criteria thresholds with the aim being to help improve borrowers’ financial situations over time. While this type of loan is more accessible than some other forms of credit, it does tend to have a higher rate of interest due to the increased risk to the lender.

UK Credit offers unsecured loans at rates from 19.9% to 29.9% APR. This could mean that using one of our loans to consolidate other debts could give you a lower rate of interest. We offer loans of £3,000 to £20,000 with a fixed interest rate meaning your repayments won’t change during the life of the loan.