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Debt Consolidation
Juggling several debts and worried that missed payments, defaults, or a CCJ rule you out? We'll help you compare secured and unsecured debt consolidation loans for bad credit from a wide range of lenders.
Yes, it's possible to get a debt consolidation loan with bad credit in the UK, including if you've had missed payments, defaults, a County Court Judgment (CCJ), or a completed IVA (Individual Voluntary Arrangement). Lenders look at more than your credit score - they assess your income, your existing debt-to-income ratio and, for secured loans, how much equity you have in your home.
A Financial Conduct Authority-regulated broker can compare a wide range of lenders on your behalf using a soft search first, so you can see realistic options before a full application affects your credit file.
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.
Many of the lenders we work with will consider a CCJ that was satisfied more than three years ago, a default older than 12 months, or an application from someone who completed an IVA around a year or so back. It's rarely a straightforward yes or no answer - it comes down to your full circumstances, not just the number on your credit file.
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.
Weighing up secured vs unsecured?
Our advisors compare secured and unsecured options from a wide range of lenders and explain the trade-offs of each, with no pressure to proceed.
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:
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.
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.
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.
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.
At a glance
A less competitive rate
Lenders price for risk, so bad credit usually means less competitive pricing than a clean credit history would attract.
A lower maximum loan amount
Affordability and risk checks can mean a lower borrowing limit, especially for unsecured loans.
Different repayment terms
Term length is often at the lender's discretion and can vary between providers.
More documentation requested
Proof of income, bank statements, and an explanation letter for any CCJs or defaults are often requested.
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:
Some types of debt are usually left out of a consolidation loan, or need specialist advice first:
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.
What you can consolidate
Applying with bad credit takes a little more preparation, but the process follows the same broad steps as any other loan application.
How it works
Check what you owe
List every debt you want to consolidate, including the balance and monthly payment for each one.
Work out what you can afford
Add up your income and outgoings to arrive at a realistic single monthly payment you could manage.
Get a soft-search eligibility check
We can check your options with a soft search first, so exploring what's available doesn't leave a mark on your credit file.
Compare secured and unsecured offers
Your advisor compares options from a wide range of lenders, explaining the differences between secured and unsecured routes for your situation.
Complete your application
Once you've chosen a lender, you'll need to provide supporting documents such as proof of income and recent bank statements to complete the full application.
Support for CCJs, defaults, and post-IVA applications
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.
Arranged through a free debt charity such as StepChange or Citizens Advice, a DMP can freeze or reduce interest on your existing debts without you taking on any new borrowing. It usually takes longer to clear your debts this way, but it doesn't require a credit check.
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.
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.
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 0% 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.
At a glance
Debt Management Plan (DMP)
A free debt charity arranges reduced or frozen-interest repayments with your existing creditors, without any new borrowing.
Individual Voluntary Arrangement (IVA)
A formal insolvency route for larger debts, affecting your credit file for six years.
Remortgage to consolidate debt
Rolls existing debts into your mortgage if you have enough equity, subject to affordability.
0% balance transfer card
Suits good to fair credit, with a temporary interest-free period on transferred balances.
Common questions
Yes, having a CCJ doesn't automatically rule you out. Many lenders we work with will consider applications where a CCJ was satisfied more than three years ago, alongside your income and, for secured loans, the equity in your home. Every lender sets its own criteria, so it's worth speaking to an advisor about your specific circumstances.
Checking your eligibility with us starts with a soft search, which doesn't affect your credit score and isn't visible to other lenders. A full application later on involves a hard search, which can leave a mark on your credit file, so it's worth comparing your options with a soft search first.
No, a debt consolidation loan doesn't require a guarantor. This applies to unsecured personal loans and secured homeowner loans alike - lenders assess your own income, credit history, and, for secured loans, the equity in your property, rather than asking someone else to back the application.
How much you can borrow depends on your income, existing debts, credit history, and whether the loan is secured or unsecured. Unsecured loans are typically available up to around £25,000, while secured homeowner loans can go much higher, into the hundreds of thousands, depending on your equity. Speak to an advisor for a realistic figure based on your circumstances.
A soft-search eligibility check can usually be turned around within a day or so. A full application takes longer: unsecured loans can sometimes complete within a couple of weeks, while secured homeowner loans typically take four to eight weeks once valuation and legal work are factored in.
No. A debt consolidation loan is new credit that you take out and repay yourself, ideally at a lower rate than your existing debts. A debt management plan (DMP) is an informal arrangement, usually set up through a charity such as StepChange, where your existing creditors agree to reduce or freeze interest. A DMP doesn't involve taking out any new borrowing.
What our clients say
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Debt Consolidation
Speak to our advisors about consolidating your debts. We compare a wide range of lenders to find the right solution.
