Debt Consolidation Loans

What are debt consolidation loans?

A debt consolidation loan is a type of borrowing typically used to bring your finances under control, manage your debts and make monthly repayments a little less overwhelming.

If you’re making multiple monthly payments for credit cards or loans, consolidating these debts with the right plan can mean you only pay one lender a fixed rate each month until the loan term ends.

This can help with your budgeting, as you won’t need to keep juggling several bills each month or borrowing from one lender to pay back another.

Our debt consolidation loans start from £3,000 and our friendly advisors are always on hand to answer any questions about the process.

Is a debt consolidation loan right for me?

Whether a consolidation loan is right for you depends on your individual circumstances. Taking out a loan to consolidate debt can make managing finances easier.

If you have county court judgements (CCJs) or poor credit, our loan experts will search the market to see which loans offer the best chance of eligibility.

Our guide can help you find out more about being eligible for a loan.

You must also meet the following basic criteria to be eligible for a loan. You must:

• Be a UK resident
• Be at least 18 years of age
• Have a UK-based bank account

Benefits of a consolidation loans

Consolidating debt into one loan can help you avoid juggling several individual repayments with several lenders. It can also sometimes mean you pay less than short-term loans.

Disadvantages of consolidating debt with a loan

In some cases, debt consolidation might not reduce your repayments, as it depends on how much you are currently repaying and over what period. This type of loan isn’t designed to erase your debts entirely, so think of it as a new payment plan rather than a form of debt relief or settlement.

Remember that securing your loan against property, such as your home, could mean losing it if you default on loan repayments.

Can I get a debt consolidation loan with bad credit?

Some lenders offer bad credit debt consolidation loans, where customers who may have been rejected elsewhere can work to take control of their situation.

In some instances, you might not be able to borrow as much, and you may be offered higher interest rates than those without bad credit. But we will always try to find a loan that suits your particular needs and circumstances.

A bad credit debt consolidation loan can also help your credit score. Demonstrating you’re able to manage debts by keeping up with repayments could improve your credit rating, giving you access to a wider range of loan options in the future.

Before you apply…

There are ways you can prepare before you apply to give yourself the best chance of being approved. This can include:

Assessing the cost of repayments

Calculate how much you’re currently paying monthly, and ensure it tallies with the new repayment structure of your consolidated loan amount. This can help you decide whether combining your credit into a single repayment is a better option.

Checking details on your income and outgoings

It will help lenders if you give them full details on your income and monthly outgoings, as they will always need this information.

When making your application, it’s especially helpful to share information about your other debts, so they can be sure you can comfortably make repayments on a new loan agreement.

Looking up your credit history

Familiarise yourself with your credit report so you can give lenders all the information they need and answer any queries. Lenders tend to run a credit check as part of your loan application, so they can see your borrowing history as well as any CCJs or other debts.

Representative example

SECURED LOANS - Rates start at 3.99% variable. We also have a range of plans with rates up to 65.2%, giving us the flexibility to help you find a loan that suits your needs.

Representative example: if you borrow £10,000 over 10 years at an Annual Interest Rate of 5.14% (variable), you will make 120 payments of £122.71 per month.

The total amount repayable will be £14,725.20. This includes a lender fee of £495 and a broker fee of £1,000, both of which have been added to the loan. The overall cost for comparison is 8.6% APRC representative.

The maximum APR is 65.2%.

What do I need to apply for a debt consolidation loan?

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:

• Personal financial details
• Employment status
• Details of your income

We may also discuss your current situation and the existing debts you have. This helps us search the market for the best loan for you.

Before you get started, it’s best to make sure you have details on any outstanding amounts to hand, along with your current loan terms, monthly payments, and interest rates. This can help us better understand your situation and see if we can help simplify your finances by offering a loan that would lower your monthly repayment amount.

Our loan calculator can help you determine what kind of monthly repayments you might expect to make.

Why choose Norton Finance?

Norton Finance is a UK lender with the expertise to help you find the right loan, whether you’re employed, self-employed, retired or have CCJs. We’re experienced with in-depth loan comparisons, meaning we can search the whole market for the best deal to suit your needs.

We have access to over 600 lending plan products, helping us find the right solution for you. The loans we find could allow you to borrow from £3,000 to £500,000, so you can consolidate existing loans over a period of one to 30 years.

Once you’ve submitted your application, we’ll be able to give you an ‘in principle’ decision the next day.

FAQs about consolidation loans

Can I pay off a debt consolidation loan early?

As with most loans, it is sometimes possible to repay the amount in full ahead of time. However, it’s important to remember that this may incur an Early Repayment Fee. This amount usually varies from lender to lender. 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 at any point, you should check the terms before applying. While some lenders do offer ‘payment holidays’ on loans for debt consolidation, these can show up as a negative on your credit report. It’s always important to get advice before you apply.

Do debt consolidation loans hurt your credit score?

Applying for any form of credit could mean a temporary decrease in your credit score, especially where multiple searches have been placed on your credit file.

However, taking out a debt consolidation loan in particular doesn’t negatively impact your overall credit score. In fact, over time it could act as a boost as you make repayments and prove your reliability as a borrower.

Just make sure to keep on top of making payments regularly. If you're concerned about any negative implications, it's important to seek advice from one of our experts beforehand.

Are debt consolidation loans a good idea?

Depending on the amount you owe to other lenders, a debt consolidation loan could be a big responsibility to take on. Some lenders use long term loans for debt consolidation in order to make monthly repayments more affordable.

However, provided you keep up with the repayments and refrain from further borrowing, you should benefit from restructuring your outgoing payments. You could also potentially end up paying less money on interest in the long run, subject to the length of your repayment period and interest rate charged.

What’s more, repaying your loan over time can improve your credit score, leaving you in a better position to apply for credit at more favourable rates in the future.

What is an unsecured debt consolidation loan?

Unlike a secured loan, an unsecured debt consolidation loan isn’t linked to any property you hold. That means, if you fall behind in payments, a lender won’t be able to take ownership of your property.

Also known as a personal loan, debt consolidation without the risk of losing your property may instead be subject to higher rates.

Questions about our loans

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

• How much can I borrow?
  You can borrow anything from £3,000 to £500,000 when you choose Norton Finance and our trusted network of lenders.
• How long are the repayment terms?
  Repayment terms vary between one and 30 years. They usually depend on your personal circumstances, including how much you borrow and the amount you can comfortably afford to pay back each month.
• What are the interest rates?
  The interest rate you’re offered will depend on your individual money management history and current credit score. If you’re a homeowner, our secured loan rates start at 3.99%.
• Are there any loan fees?
  We may charge a broker fee of up to 12.5% on all secured debt consolidation loans, capped at £3,995. We don’t charge fees on unsecured consolidation loans, as we receive a commission from the lender.