Debt Consolidation Loans

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Lower your monthly payments and get back on track with a convenient debt consolidation loan from Believe Money.
  • Simple, easy application
  • We search lenders to get you the best deal
  • 5-star customer service
  • No impact on your credit score
  • No upfront fees or hidden charges
  • Bad credit score? No problem
  • Lowest interest rates available with no upfront fees
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Are you a homeowner or a tenant?

What is debt consolidation?

If you’ve ever looked at all of your debts and said to yourself “I wish all my debts were in one place”, then a debt consolidation loan could be for you.

Debt consolidation refers to the process of combining multiple debts into a single loan. It involves taking out a new loan to pay off existing debts, which can include credit card balances, personal loans, store cards, unsecured personal loans, or other types of debts such as bank overdrafts or simply outstanding bills.

The primary goal of debt consolidation is to simplify the repayment process by merging all outstanding debts into a single monthly payment. Instead of managing multiple payments and dealing with different interest rates and due dates, you consolidate your debts to streamline your finances and potentially secure more favourable terms.

Debt consolidation is not risk free. If you default on your loan, you could damage your credit score. If you put your house up as collateral and you default on loan repayments, you risk losing your home.

What are debt consolidation loans?

Debt consolidation loans (also known as a bad credit loan) are one of the most valuable solutions for individuals struggling to pay off their debts, even if you have bad credit.

A debt consolidation loan is a single loan that combines all your existing debts into one lump sum, which can help make your repayments more manageable.

Just like a normal secured loan, you’ll agree on an affordable monthly payment plan with the lender so that you can get on top of your debt in a timely and achievable manner.

Most debt consolidation loans are secured loans, meaning they are secured against something of value that you own like a property or vehicle. Secured debt consolidation loans are often good options for people with existing debt and a bad credit score who have limited options available to them.

Which debts can be consolidated into a loan?

There are numerous debts that you can include in a consolidation loan, including:

Credit card debt

The longer you leave a credit card, the worse the debt will become. If your debts mount up quicker than you can pay them off, you’ll also have hefty interest rates that continue to cause problems.

By consolidating these debts, you can reduce the interest rates and pay off your credit cards without worrying about the extra debts.

Store cards

In many ways, store cards are similar to credit cards – but they can often be more expensive. Catalogues and other retailers let people buy items in advance and pay them off later, which seems like a great idea.

However, the interest rates on these store cards are often higher than credit cards – especially when you factor in large purchases.

Unsecured personal loan amounts

There are numerous personal loans, and you’ll often need to pay unsecured ones back quickly. Whether it’s a payday loan or outstanding car repayments, these debts can mount up, and the interest rates can be shocking.

Bank overdrafts

Overdrafts are meant to give people some breathing space between paychecks, but if you find you’re deep into your limit, it’s almost impossible to get out. Every time you get paid from your employment or other money that goes into your account, it immediately incurs interest.

Some people use the loan to get out of their overdraft, ensuring they can pay back their consolidation loan and avoid extra interest fees.

Outstanding bills

You might not know this, but you can consolidate some utility bills too. These include your gas, electric, TV and mobile phone debt, private medical treatments and personal lines of credit.

4 Benefits of debt consolidation loan

By consolidating debts, you can benefit from several potential advantages. These may include:

  1. Simplified repayment: With a single monthly payment, it becomes easier to track and manage your debt obligations.
  2. Lower interest rates: Debt consolidation can potentially result in a lower interest rate compared to the rates on individual debts, especially if the new loan has more favourable terms.
  3. Reduced monthly payments: By extending the repayment period, debt consolidation can lower the monthly payment amount, providing more breathing room in the budget.
  4. Improved credit score: Successfully managing consolidated debt can positively impact credit scores, especially if it helps you make timely payments and reduce your overall debt burden.

Am I eligible for a debt consolidation loan with bad credit history?

If you have a poor credit rating, there’s a good chance you won’t be able to get a standard unsecured loan. This is because lenders often consider your credit rating as an indication of whether you’re likely to repay the money they lend you.

However this isn’t true for all loans. Debt consolidation loans, in particular, are designed to help you get out of the debt cycle.

To find out more about securing consolidation loans for bad credit, speak to our friendly team today.

If all goes well, you could find yourself paying less money to to your debt consolidation loan repayments than you were for all of your debts.

How debt consolidation loans work

In general, there are two debt consolidation loans available; secured and unsecured. Both have advantages, and you might find that you’re only eligible for one, so there’s limited choice:

Secured debt consolidation loan

In order to take out this type of debt consolidation loan, you must be able to prove your income and assets at the time of application, regardless of your credit history, because a secured debt consolidation loan requires you to use collateral as security.

You’ll need to have a good understanding of your finances as well as the ability to afford the payments that will come with the loan, but the lender should discuss this with you at length.

Most people use their home as equity, but if you want to borrow a smaller sum of money, you could offer a car or other valuable items as collateral (as long as they cover the amount and it’s something the lender can repossess in the event of you defaulting on your payments.).

Two things bear in mind about secured debt:

  1. You can only borrow against assets you own. For example, say you want to offer your £300,000 property as collateral, but the mortgage amounts to £230,000; the maximum amount you can borrow is £70,000.
  2. You can typically borrow up to 80% of the value of the collateral, so make sure that in the case of a secured debt consolidation loan that this value is more than the total existing debts.

Unsecured debt consolidation loan

Unlike a secured loan, backed by collateral, an unsecured loan is not supported by any assets, so you’re not sacrificing your property. However, these loans are usually only available for people with a good to excellent credit rating, as lenders want peace of mind.

Most loan providers expect you to pay an unsecured loan back quickly, so they’re not suitable for some people. Also, if you fail to make repayments, you’ll still have to deal with bailiffs.

Pros and cons of secured and unsecured debt consolidation loans

Secured debt consolidation pros:

Lower interest rate: Most secured loans have lower interest rates because you’re offering security to the lenders.

Borrow more money: A secured debt consolidation loan could be the best solution if you want to borrow a lot of money. Sometimes, you can borrow more than £100,000, depending on your circumstances.

Pay it back over time: Nobody wants to owe money, and secured agreements mean you can pay the loan over the years instead of months.

Unsecured debt consolidation pros:

Zero collateral: If you don’t own a home or have limited assets, you won’t be eligible for a secured loan. However, unsecured loans are available regardless of your assets.

Easier arrangements: Secured loans can take longer to arrange, but an unsecured debt consolidation loan often has a quicker arrangement process.

Secured debt consolidation loan cons:

The risks: If you get a debt consolidation loan but fail to pay it back, you could lose your home or other valuable assets.

Variable interest rate traps: Some lenders will offer variable interest rates, which means you won’t enjoy one fixed monthly payment. However, a good broker can help you avoid this trap.

Unsecured debt consolidation loans cons:

Credit history: If you have a poor credit history or your credit score is fair, you won’t qualify for an unsecured loan. They’re hard to get, so people often find other solutions.

Shorter repayment plan: Unsecured arrangements usually last up to seven years, so some people notice they have high monthly repayments.

You could still lose valuable items: If your personal circumstances change and you can’t make your monthly payment, you could still face action from the loan provider. They could bring in the bailiffs, or you might have to attend court.

Which loan arrangement is best?

If you have a good credit rating and own your property, you’ll have more choices available for your needs. When choosing the right solution, it’s essential to consider the following factors:

  • How much debt are you in?

  • Do you want to risk your property?

  • Are you looking for stability or a quick financing solution to get back on track?

Secured loans are best for people who want to consolidate their existing debt and pay a monthly fee for many years. In contrast, unsecured personal loans are much better if you want to roll your existing debts into one payment and then free yourself of debt ASAP.

How much will a debt consolidation loan cost me?

The exact cost of your debt consolidation loan depends on the interest rate, which is typically set at somewhere between 3% and 25%. However, it is more likely that personal loans for particularly bad credit will come with rates somewhere in the region of 12-20%.

While this may seem high at first glance, keep in mind that the interest rate is personal to you, and is an average based on many different factors like your credit score, income, and the total amount of your other debts. At Believe Money our interest rates start as low as 2.99%, and you can use our free quote service to get an instant rate offer.

With most debt consolidation loans, you will likely be charged a fee for setting up the loan, due to the legwork that the lender has to do to consolidate all of your debt into one place.

In some cases, this figure can seem quite high, but don’t be fooled by lenders who offer zero-cost set-up fees for your consolidation loan! Most likely they’ll have just incorporated that expense into your monthly repayments, hidden as your interest rate.

If you’re finding it hard to figure out the overall cost of the bad credit debt consolidation loan that has been offered to you, multiply the monthly repayments by the loan term to get the figure.

What would the monthly repayments be?

The monthly repayments on a debt consolidation loan are based on the amount you borrow and the interest rate. If you borrow more money, then your monthly payments will typically be lower. However, if you can only afford to borrow less money and don’t want to stretch yourself too far financially, then this might not be an option for you.

You can use an online calculator to work out how much your monthly payments would be if you took out a certain amount of borrowing and at what rate of interest.

As well as showing them your financial situation, you’ll usually only also be required to show proof that you’re a UK resident in order to get a quotation for a loan amount and expected monthly repayments.

If you have missed payments in the past or have had previous bad credit, it’s likely that lenders will consider this when deciding whether they want to lend you money.

This is why it’s important to get good advice before you compare debt consolidation loans, or apply for one.

Who is the best lender for a loan to consolidate my debts?

As a specialist finance broker, we have access to a wide range of lenders, because there is no one best debt consolidation loan lender. The right lender for you will be specific to your needs and circumstances.

You should compare the interest rates and fees, repayment period, and customer service of different lenders before considering taking out any sort of consolidation loan. You’ll want to know what the loan providers are expecting for one monthly repayment and make sure that this isn’t expected to rise higher than at the rate of inflation.

It’s also important to check the loan-to-value ratio if you have collateral to secure your loan against. For example, if you need to borrow £10,000 to pay off your debt and your property is worth £200,000, then your loan-to-value ratio will be 5%. Some lenders might ask you for this figure in the loan application, so it’s good to know in advance.

When does it not make sense to take out a debt consolidation loan?

  • If you can’t afford the consolidated monthly repayments.
  • If you can’t clear all your debts with the consolidation loan.
  • If you end up paying more in monthly payments than before you consolidated your debt.
  • You simply need assistance or advice to sort out your debts, rather than a loan.

The alternatives to debt consolidation loans

A debt consolidation agreement is one of the most popular borrowing solutions, but some prefer to explore other options. There are some available, but each comes with its disadvantages.

Balance transfer credit cards

Balance transfer credit cards are one of the most accessible solutions for consolidating debts, and they can be beneficial – if you use them properly. Most credit cards come with an introductory 0% interest rate, which lasts from a few months to over a year.

The main problem with these credit cards is that the interest rates often rise quickly, which means you’ll pay more in the long run.

Also, a balance transfer fee applies, usually around 3% of the amount you transfer.

Home equity line of credit

A home equity line of credit (HELOC) is a loan that uses the equity in your home as collateral. Your home equity is subjective because it depends on how much money you still owe on your mortgage, so if you have a large mortgage, you won’t be able to borrow huge sums of cash.

While a HELOC lets you borrow a certain amount against your equity, the interest rates are valuable, which can cause problems.

Take control of your finances with Believe Money

If you’re in debt, there are two things you can do:

  1. Struggle alone and let your debts build up.
  2. Talk to a specialist loan advice company and tackle the problem.

Believe Money is a specialist loan broker dedicated to providing the best possible solutions for your financial requirements. When you choose us, you can effectively consolidate your debt and get back on track.

With many solutions available for all financial circumstances and credit ratings, we’re confident you won’t find a better service.

Speak to a trained financial advisor

It is important to speak with a financial advisor before making any decisions about debt consolidation.

Our financial advisors are fully trained in sourcing the best loan providers for each client’s needs. You can call us anytime for free debt advice, and we’ll learn more about your circumstances.

We are authorised and regulated by the Financial Conduct Authority.

We put your needs first

Everyone has different debts and borrowing needs, so it’s essential to document all your existing debts and creditors. You might be able to choose from a range of loans if you have a good credit score and collateral, but we also work with low credit scores.

Choose from a range of lenders

Believe Money partners with a range of top lenders, and we do all the leg work for you. Our access to these loan companies ensures we can find companies willing to work with you.

With loan amounts up to £500,000 and low-interest rates, you’ll get to choose from an extensive selection of lenders with excellent incentives.

Pay nothing upfront

As a loan broker, we charge a small fee for our services. However, the good thing is we add our fee to your loan, so you won’t have to worry about upfront cash. Once you enter into the loan, you make just one monthly payment and finally get control over your debts.

Achieve financial freedom with our dedicated service

If you’d like to learn more about our debt consolidation loans, please feel free to get in touch with our friendly customer service team. We’re available to help you compare loans and find the right solution for your needs.

Debt might seem like a never-ending merry-go-round, but with us on your side, you can recover and look forward to a brighter, stress-free future.

Please remember the potential downside of a secured loan: if your circumstances change and you can’t keep up with repayments, you risk losing your home.

Why Use Believe Money?

Believe Money is an award-winning finance broker dedicated to offering the best range of affordable loan options. Whatever your circumstances or credit rating, we’re committed to getting you the best secured loan interest rates by searching our entire panel of secured loan providers.

Whatever you need a secured loan for, we’re here to help. Our specialist advisors are available Monday to Friday, so if you need any help please contact us online or give us a call on 01302 591 360.



Debt relief orders might seem like an easy way out, but writing off the majority of your debts does have some negative consequences. You’ll find it harder to get loans in the future, and using this solution will also result in a low credit score.

Paying back your debts shows you’re willing to take financial responsibility, which will benefit you in the future.


Yes. Even with a bad credit score and multiple debts, a debt consolidation loan may be available to you. You may be subject to higher fees, but that’s why it pays to work with a specialist broker that knows which lenders are more favourable to bad credit applicants.


We’re not a lender but a loan broker – which means we can offer financing solutions from numerous providers. When you go to one loan provider, your choices are limited – but our brokers will always find you excellent terms and lower interest rates.


As with any borrowing solution, a debt consolidation loan can impact your credit file if you don’t make the repayments on time. Also, you shouldn’t take out any lines of credit while paying back the loan.

However, when managed correctly, a debt consolidation loan lets you build your credit score again because it shows you can take responsibility for your debts.


You can end up paying less because the monthly repayments when you consolidate debt are lower than dealing with credit card interest rates. However, you can clear your existing debts with lower loan rates and one monthly repayment.


Most borrowing solutions come with loan repayment terms; in some cases, these providers might charge an early repayment fee. You should always check the fine print before entering into an agreement because you might find better terms from certain providers.

How can I improve my credit rating?

If you’re suffering from the effects of a poor credit history, you should know that there are a few things you can do in order to improve it. Surefire ways to boost your credit score include making sure that you pay all of your bills on time, and keeping any outstanding balances on your accounts as low as possible.

If you have several loans and you don’t want to consider a debt consolidation loan, working out if paying off one of the loans first before moving onto the next one might be a more effective option. Interest rates on loans vary, but one thing that they certainly don’t do over time is get any lower.

If possible, try to use less than 30% of each of your card’s available balances. This will allow some breathing space to build up some positive payment history without overextending yourself by using more than 80% of the limit at any given time.

You may also want to consider getting a secured loan as an alternative option if you don’t qualify for a non-secured loan due to bad credit. Secured loans require collateral such as a car or house title but offer lower interest rates than unsecured credit cards and personal lines of credit (sometimes referred to by lenders as PLOC).

How It works

Step 1.

Simple, easy application

Step 2.

We search our panel of lenders to find the deal that’s right for you

Step 3.

When you confirm your chosen deal, we get your application moving

Step 4.

The money lands in your bank
account – usually within two weeks

We compare loans from our panel of the UK’s top lenders to get you the best deal.


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01302 591 360