Debt consolidation loans for bad credit in the UK: your options explained

If you're juggling several debts and worried that debt consolidation loans for bad credit UK borrowers simply can't get, the short answer is that bad credit doesn't automatically close the door. Lenders look beyond your credit score, and a specialist or secured option is often available even with missed payments, defaults, or a County Court Judgment on your file.

"Bad credit" covers a wide range of situations, including missed payments, defaults, CCJs, and an IVA that's either ongoing or already completed. What matters most to most lenders is whether you can comfortably afford the new repayment and, for secured loans, how much equity sits in your home.

As a Financial Conduct Authority-regulated broker, we compare a wide range of lenders on your behalf, including some who specialise in adverse credit, and we start with a soft search that doesn't affect your credit score. For a broader introduction to how these loans work, see our guide to debt consolidation loans.

The first decision most people with bad credit face is whether to consolidate with an unsecured personal loan or a loan secured against their home. Which one suits you depends on how much you need to borrow, whether you own your home, and how lenders view your credit history.

Secured loans are often more accessible for people with bad credit because the equity in your home reduces the lender's risk, which can open the door when an unsecured application has been turned down elsewhere. Read more in our guide to secured loans explained, or find out more about homeowner loans for bad credit if you're a homeowner considering this route. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Unsecured loans can still make sense if you're renting, don't want to put your home at risk, or only need to consolidate a smaller amount. The trade-off is that lenders are more cautious with bad credit applicants, so your choice of lender and the amount on offer may be more limited.

Bad credit doesn't rule out debt consolidation, but it does change the shape of the offers available to you. Here's what typically changes when a lender sees a lower credit score or a history of missed payments:

• A less competitive rate
• A lower maximum loan amount
• Different repayment terms
• More documentation requested

1. A less competitive rate

Lenders price for risk, so bad credit usually means a less competitive rate than someone with a clean credit history would be offered. The exact figure depends on the lender and your individual circumstances, so it's worth speaking to an advisor for a realistic picture rather than relying on headline rates advertised elsewhere.

2. A lower maximum loan amount

Lenders cap what they'll lend based on affordability and risk. With bad credit, the amount on offer may be lower than you'd be offered with a strong credit history, particularly for unsecured loans.

3. Different repayment terms

Some lenders offer shorter terms to reduce their exposure, while others stretch the term to keep monthly repayments manageable. This is usually at the lender's discretion and can vary considerably between providers.

4. More documentation requested

Expect to provide proof of income, recent bank statements, and sometimes a short explanation letter if you have a CCJ or default on file. Having these ready in advance can speed up your application.

This is where working with a broker can help. Rather than applying to lender after lender and risking multiple hard searches on your file, we match your circumstances to lenders who are more likely to consider your application, starting with a soft search that leaves your credit score untouched.

There isn't one UK credit score. Experian, Equifax and TransUnion each use their own scale, so a score from one agency can't be compared with a score from another.

• Experian: scores run from 0 to 1,250. Its lowest band is 0 to 640, where Experian says borrowing may be harder and more expensive.
• Equifax: scores run up to 1,000, in bands from poor to excellent.
• TransUnion: scores are moving to a new 0 to 999 scale, with the new score appearing from September 2026. On the new scale, Very low is 0 to 487. The change is being rolled out in stages, so you may still see the old 0 to 710 score for now.

A low score doesn't rule out a debt consolidation loan, but as covered above it usually means fewer lenders and less competitive offers. To see how consolidating can affect your score over time, read our guide on how debt consolidation affects your credit score.

Sources: Experian, Equifax and TransUnion (checked October 2026)

Most everyday borrowing can be rolled into a debt consolidation loan, but a few types of debt are better handled a different way. Debts you can typically include are:

• Credit cards
• Store cards
• Personal loans
• Overdrafts
• Catalogue debt
• Payday loans

Some types of debt are usually left out of a consolidation loan, or need specialist advice first:

• Existing mortgages - these are typically handled through a debt consolidation remortgage rather than a personal or homeowner loan.
• Other secured loans - consolidating one secured debt into another needs specialist advice, since your home is already used as security.
• Court fines - these generally can't be included in a consolidation loan.
• Student loans - these have their own repayment terms and are usually left outside a consolidation plan.

If most of what you owe is short-term, high-cost borrowing like payday loans, moving it into a loan secured against your home is worth thinking through carefully. It can lower your monthly payment, but it also turns previously unsecured debt into something that puts your home at risk if you do not keep up repayments. Speak to an advisor before deciding.

Applying with bad credit takes a little more preparation, but the process follows the same broad steps as any other loan application.

Debt consolidation can make life simpler, but it isn't automatically the right answer for everyone, especially when bad credit pushes up the cost of borrowing. Here's a balanced look at both sides.

Debt consolidation isn't always the right move, and an honest broker will tell you when it isn't. If your income doesn't comfortably support a new repayment, or the debts you're consolidating are relatively small, a debt management plan or one of the other alternatives below might serve you better. Speak to an advisor to talk through what fits your situation before committing to anything.

A consolidation loan is one option among several. These are the main alternatives worth understanding before you decide.

1. Debt Management Plan (DMP)

Often set up through a debt charity such as StepChange, a DMP lets you make one affordable monthly payment towards your existing debts without taking on any new borrowing. Creditors may agree to freeze interest and charges, but they don't have to. Citizens Advice can help you check whether a DMP suits you. It usually takes longer to clear your debts this way, but it doesn't require a credit check.

2. Individual Voluntary Arrangement (IVA)

A formal insolvency solution that can suit larger debts, an IVA is a legally binding agreement with your creditors. It affects your credit file for six years, so it's usually considered after other options have been ruled out.

3. Remortgage to consolidate debt

If you have significant equity in your home, a debt consolidation remortgage can roll existing debts into your mortgage, often reducing your combined monthly outgoings. This works differently to a secured loan, and may connect to adverse credit mortgages if your credit history affects which lenders will consider you. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

4. Balance transfer credit card

This can suit good to fair credit, letting you move card balances to a new card with no interest for an introductory period. Availability is limited for bad credit applicants, and the introductory period is temporary, so you'll need a plan for clearing the balance before it ends.

If you're worried about your situation more broadly, free and independent guidance is available from MoneyHelper, a government-backed service, on 0800 138 7777.