How can debt consolidation help?

If your finances are fairly comfortable but you`re looking to make your debts a bit more manageable, a debt consolidation loan could help you do that. By enabling you to combine multiple existing debts into one, a debt consolidation loan could make managing your debts a lot simpler - and you could even reduce the amount you pay each month.

How it works

For your debt consolidation loan to be really effective, you should borrow enough to cover most or all of your debts (talk to an adviser for more on this), plus any associated early repayment charges.

By paying off multiple debts with a new loan you will effectively be `consolidating` them all into one. You`ll then make just one monthly payment, which can be a lot easier to manage than several different repayments coming out of your account every month.

Furthermore, if you decide to repay the loan over a longer period of time you can reduce the amount you pay each month, potentially freeing up cash for other things. Do remember that this will mean paying interest for longer too - and therefore potentially paying more in total - but many people will accept this in return for lower monthly payments.

Is it the best way to manage my debts?

You should only take out a new loan if you`re financially comfortable. If your debts are already causing you problems, it`s highly unlikely a debt consolidation loan will be the best approach for you - it might simply delay your problems, rather than solving them.

In this case, you`ll need to look into the alternative options - something like a debt management plan or an IVA (Individual Voluntary Arrangement) might be more appropriate.

But if you are in a suitable position to take out a new loan, it could make your debts a lot easier to manage. It could be especially helpful for things like overdrafts and credit cards, which don`t have strict repayment terms, because it will mean you have to stick to regular payments that will clear a reasonable amount of what you owe each month.

Take our free debt test to see whether a debt consolidation loan could help you.

Try our debt solution finder

Answer a few simple questions and find out which debt solutions could help you, based on your circumstances.

Your Situation

Your total debt: Please select... £2,000 to £7,000 £7,000 to £12,000 £12,000 to £19,000 £20,000 +

Your location: Please select... England Wales Scotland Northern Ireland

Employment status: Please select... Employed full time Employed part time Self employed Unemployed Retired Student

Your email: (optional)

Your Details

First name: Surname: Telephone 1:

Telephone 2: (optional)

I agree to the privacy policy:

Please remember, this is just an information tool. We would always recommend you speak to a debt advisor for the most appropriate way to resolve your debt problems.

We'll give you an on-screen recommendation and call you. One of our advisors will be in touch to answer any questions you may have about your results.

Your privacy is important to us. All correspondence is held in the strictest confidence and we will only request information required to find your debt solution.

Tags: debt consolidation, debt, debt consolidation loans, loans, loan

Fees payable when continuing service is provided. Repaying debt over a longer period may increase the total amount to be repaid. Calls are recorded and are usually free from UK landlines. Mobile phone users may be charged and should check with their service provider. Cards are provided by third parties and are subject to eligibility, status and terms and conditions. Applicants must be UK residents aged 18 or over.