Tot up your debt
Add up the debts you’d like to consolidate. You'll then know how much you’ll need to borrow to pay off your debts
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Combine your existing debts into a single, structured repayment
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Use our loan calculator to estimate the cost of your loan with ease. Based on MoneySuperMarket data from January 2025, the average APR for debt consolidation loans between £7,500 and £14,999 is 13.8%, with a five-year term being the most common choice.
Find out what monthly repayments would be, how much you'll pay overall and how much you could borrow.
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Total amount
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Based on the information you supplied, you would be borrowing XXX and repaying the loan in XXX monthly instalments of . The total sum to repay, subject to XXX% APR over the full loan term would be XXX. This assumes there are no extra fees and that your payments are made on time and in full.
Total amount
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Based on the information you supplied, you could borrow XXX at a monthly repayment rate of to be paid over XXX monthly instalments. Over the full loan term at XXX% APR, the total amount repayable would be XXX. This assumes there are no extra fees and that your payments are made on time and in full.
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If you need a larger amount, consider a secured loan, which will allow you to borrow more but uses your home as collateral. Be aware that lenders can sell your house if you fail to keep up with repayments.
A debt consolidation loan is a type of loan that's used to combine all your existing debts into one pot with one monthly repayment.
It's often an unsecured personal loan, but homeowners may be able to use their property as collateral for a secured loan, which could be a cheaper option.
A debt consolidation loan won't reduce the amount you owe, but you may pay less interest, making it easier to repay the overall debt.
If you're paying higher interest on some or all of your debts, rolling them up and paying a lower interest rate can save you money and give you greater control over your finances.
According to MoneySuperMarket data, customers typically borrow £12262.01[2] to consolidate existing debts.
Remember that taking on new debt is a big decision and a loan might not cover all you owe, so work out your budget and understand that you might end up paying more overall over the loan term, even if month-to-month becomes easier to manage.
Think a debt consolidation loan might be right for you? Here’s how to take one out and how repayments work...
Add up the debts you’d like to consolidate. You'll then know how much you’ll need to borrow to pay off your debts
Expect to have to pass a credit check and provide your address history, your expenditure, income and bank details
Assuming you’re approved for your loan, the lender will deposit the loan amount in full in your bank account
Starting with the most expensive, use the new funds to clear your existing debts.
With one repayment to make each month and a single debt to service, you should be able to get on top of your finances more easily
As long as you make your payments in full and on time, you’ll clear your debt within the allotted timeframe.
A debt consolidation loan can be used to pay off different types of debt, including:
Many credit cards charge high APRs making them an expensive way to borrow long-term
Unsecured loans are often taken out to fund a car purchase, home improvements or a holiday
Most banks charge high interest rates on overdrafts which, over time, can lead to a big debt
While some store cards offer up-front discounts on spending they often have high APRs and fees
Combine all your debts into one easy monthly payment
Could reduce the total interest you pay over time
Helps improve your credit score if you keep up repayments
You may pay more overall if the loan term is longer
Missing payments could harm your credit score
Secured debt consolidation loans risk your home if you can't repay
You might be able to get a debt consolidation loan if you have bad credit, but you may not be offered the best loan deals. Some specialist providers may offer secured debt consolidation loans if you have something to use as collateral, like your home.
Remember that with this type of loan, if you don’t keep up with payments, you risk losing your home. Representative 29.9% APR.
Applying for a debt consolidation loan can lower your credit score temporarily. When you apply, the lender will carry out a credit check and this results in a hard inquiry, which affects your credit score.
However, if you make your loan repayments on time and clear your debt this will help to improve your credit score over time.
It should, but it may take time. The base rate stands at 4.25% after the Bank of England voted for a quarter point cut on 8th May 2025. This rate influences how much it costs banks to borrow money, and in turn, it affects the interest rates offered on loans to consumers.
When the base rate is reduced, lenders often lower their Annual Percentage Rates (APRs) on loans, making borrowing more affordable. If rates continue to be cut in the coming months then debt consolidation loans may become slightly cheaper.
However, not all lenders adjust their rates at the same pace. Some may quickly pass on the savings to borrowers, while others may delay or make smaller adjustments. Therefore, it's important to compare loan offers from different lenders to ensure you benefit from the most competitive APRs in the market.
To make sure you have the best consolidation loan for your needs, it’s a good idea to ensure that you...
Keeping the loan amount down means the amount of interest you have to pay will also be lower
Focus on securing a loan with a competitive interest rate to minimise the overall cost of borrowing
Look for manageable monthly payments while not over-extending the length of the loan, so you pay more than necessary
Carefully review any charges, so you're aware what happens if you miss a repayment or want to clear the loan early
Debt consolidation can be a good option to help you manage your debt if you're struggling with high interest rates or multiple payments, but it's not always the best choice for everyone.
It's essential to weigh the pros and cons, including potential impacts on your credit and the possibility of paying more in the long run, before making a decision.
Here are some key things to look at before committing to a debt consolidation loan:
If you're considering any loan, it's important to weigh up the following:
Interest rate (APR): Is it lower than your current debts?
Loan term: A longer term may reduce monthly payments but increase the total interest paid over time.
Fees and charges: Check for:
Arrangement fees
Early repayment charges (on existing debts or the new loan)
A better credit score typically translates into better loan terms. If your credit score is low, you may not get a favourable interest rate — which could make consolidation more expensive.
Will you be disciplined not to rack up new debts? Consolidation is not a good solution if you continue overspending.
Speak with a free debt advice charity such as:
These charities can help you understand if debt consolidation is suitable or if another solution would be better by assisting with setting up Debt Management Plans (DMPs) and offering impartial guidance.
If a personal loan doesn't meet your needs, other forms of lending might relieve some of the pressure, including:
If you're trying to clear a credit card balance, a balance transfer card can help you move your debt onto a card with a lower, or 0% interest, period.
If you want to clear an overdraft, a money transfer credit card lets you pay money directly into your current account and may have a lower interest rate.
A second-charge mortgage lets you borrow on top of your existing home loan, but be aware that your home is at risk if you cannot meet repayments.
Consolidating debt could be the right option if you’re struggling with high interest rates and not clearing what you owe quickly enough. But remember that taking on new debt is a big decision and a loan might not cover all you owe. So it's vital that before you apply, you make sure you’re happy with the terms of the new loan, including how much you’ll be paying each month and for how long.
Kara Gammell Personal Finance Expert
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You’re not alone. According to our charity partner CALM (Campaign Against Living Miserably), eight out of ten people have experienced money worries in the last 12 months. What’s more, a quarter of a million people worry about money at least once a day.
The good news is that help is at hand. CALM is there to assist you, with practical advice to help you get your debts under control, as well as practical tips on how to talk to people closest to you about your financial situation.
If your finances are affecting your mental health or you really can’t see a way forward, CALM offers a telephone helpline too. It’s open from 5pm-midnight every day, completely confidential and free to call.
Applying for a debt consolidation loan can lower your credit score temporarily. When you apply, the lender will carry out a credit check and this results in a hard inquiry which can hurt your credit rating. Hard inquiries can affect your credit rating for a year. If you make your loan repayments on time and clear your debt this will help to improve your credit score.
Yes, most banks offer secured or unsecured loans which can be used for debt consolidation. Our comparison service can help you find the best deals from government-regulated lenders from across the market, including high street banks.
Yes, you can consolidate debt with a credit card. You can do this with a balance transfer card which moves your debt onto a lower interest rate card.
Whether or not a debt consolidation loan is right for you will depend on your circumstances and financial habits. If you keep up with payments, it can help make your debt more manageable. If you miss repayments, you run a serious risk of drowning in more debt.
A debt consolidation loan can be unsecured or secured. Your credit score can play a part in the type of loan you’re offered. If you have bad credit, you’re more likely to be offered a secured debt consolidation loan.
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Based on the average loan amount from enquirys made on MoneySuperMarket in April 2025 where the purpose of the loan was Debt.