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Debt Consolidation Loans

With a consolidation loan, you can bring together your existing debt into a single monthly payment, at one interest rate.

Debt consolidation loans combine existing credit into one monthly payment. This could make your finances easier to manage and reduce your repayments. However, it's important to carry out thorough research to ensure the loan is affordable, and to understand potential negative changes to your credit score and interest rate.
  • A type of loan secured against property or another asset – which could be at risk if repayments aren't maintained

  • Consolidation loans are used to pay off other debts, leaving one monthly repayment

  • Can help reduce monthly outgoings and may lower the interest rate payable on debts

  • Consolidating existing borrowing could mean extending the term of debt and/or increasing the repayment total

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What are debt consolidation loans?

A debt consolidation loan is typically used to pay off all existing loan or debt amounts and replace them with a single monthly repayment. With fewer repayments to make, you may also benefit by paying only one interest rate, potentially saving you money in the end if the term of the debt isn’t extended.

Benefits of choosing to consolidate your loans

Consolidating your loans helps to avoid juggling several individual repayments and can sometimes mean you pay less than short-term loans. It's also usually easier to monitor than credit card debts, which have changing interest-free periods.

Disadvantages of a debt consolidation loan

In some cases, consolidating your loans will not reduce your repayments entirely, as it depends on how much you are currently repaying and over what period. This type of loan cannot erase your debts entirely and should not be taken out as a form of debt relief or settlement.

Taking out a debt consolidation loan with a longer loan repayment period can also mean you end up paying more overall than your previous individual repayments.

Before applying, it’s important to consider whether you can afford one larger monthly payment, as well as ensuring you don’t fall further into debt.

Can I get a consolidation loan?

If you are looking to take out a loan to consolidate your debts and have county court judgements (CCJs), poor credit, or are unemployed or retired, we could help you.

Discover more about eligibility in our comprehensive guide.

Applying for a consolidation loan

Before you start a loan application, it’s essential you consider your monthly income, outgoings and existing debts. Take time to consider whether you can afford to make regular repayments with this type of loan.

Calculate how much you’re already repaying for current loans and ensure it tallies with the new repayment structure of your consolidated loan amount. This will help you decide whether combining your credit into a single repayment will help your financial situation.

What do I need to apply?

When you start an application online, our team will be in touch over the phone to talk through a few details. We’ll ask for further information about you such as:

We’ll also discuss your current situation and the existing debts you have. This is in order to provide you with the best loan for you.

Before you get started, make sure you have those outstanding amounts, repayment period, monthly payments and current interest rates to hand. This will help us understand exactly what you’re paying out and whether a debt consolidation loan would lower your monthly repayment amount.

Frequently asked questions about consolidation loans

Can I pay off a debt consolidation loan early?

As with most loans, it’s possible to repay the amount in full at any time when you take out a loan. It’s important to remember, however, that doing so may incur an Early Repayment Fee. This amount is calculated according to how much interest won’t be paid through your early repayment. Always check the terms of your loan before you apply.

Can I take a break from paying back my debt consolidation loan?

If you think you might need a break from repayments, it’s vital to check the terms before signing up. While some lenders do offer ‘payment holidays’ on secured loans, these can have a negative effect on your credit report, so make sure to assess the situation beforehand.

Do debt consolidation loans hurt your credit score?

Consolidating your loans into one monthly payment will not affect your credit score if you maintain the monthly repayment at the agreed time. Ensure you never miss a repayment and keep on top of making payments regularly. If you're concerned about any negative implications, however, it's important to first seek the advice of an expert.

Can I get a debt consolidation loan with bad credit?

Yes, if you have bad credit, there are debt consolidation loans available for you. In some instances, you might not be able to borrow as much and you may have higher interest rates than those without bad credit, but there are certainly loan options for your circumstances.

Debt consolidation loans from Norton Finance

Norton Finance has the expertise to help you find the right loan, even if you’re unemployed, retired or have CCJs. We’re a broker, not a bank, so we can search the whole market for the best deal.

We have access to over 600 lending plan products, helping us to find a solution that’ll suit your personal situation. The loans we find could allow you to borrow from £3,000 to £500,000 to consolidate existing loans, over a period of one to 30 years.

Once you’ve submitted your application, we’ll make an ‘in principle’ decision within 24 hours on whether you’re successful.

Loan details

We can give you the tools you need to better manage your financial situation and provide a simple and flexible loan process. Our team will assist you in every way possible to ensure you get the repayment terms and interest rates that are best for you.

What can I use a consolidation loan for?

You can use a debt consolidation loan to help pay off all sorts of existing debts, although it’s important to note that mortgages are not included.

CreditCard

Credit cards

Help manage multiple repayments on your credit cards by consolidating into one, simple monthly sum.
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Store cards

Standardise the interest rates you pay back at for different store cards and potentially lower your regular payments.
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Personal loans

A personal loan can be used for just about anything, from retraining to travel.

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