Buying a Home
Remortgaging
Landlord
Specialist
Secured Loans
Debt Consolidation
Conveyancing
Finding a Solicitor
Secured Loans
Bring credit cards, loans, overdrafts, and other borrowing together into a single monthly payment, using a secured or unsecured consolidation loan matched to your circumstances and the equity in your home.
To consolidate multiple debts, you combine separate balances, such as credit cards, store cards, overdrafts, and personal loans, into a single new loan with one monthly payment. This can make your finances easier to manage, but it's important to understand that it does not reduce the total amount you owe.
The right option depends on how much you owe, how much equity you have in your property, and your credit history. Speaking to an advisor can help you compare the options available for your specific circumstances.
If you're juggling credit cards, store cards, overdrafts, and personal loans, you already know the frustration. Multiple payments, different interest rates, and the constant mental load of keeping track of everything. When you consolidate multiple debts, you roll those separate balances into one new loan with a single monthly payment, often at a lower interest rate than you're paying across your various creditors.
Debt consolidation can make it easier to manage your payments by combining several debts into one, but it's worth being clear from the outset: it does not reduce the total amount you owe.
Many people who come to us for help with a secured loan are managing five, six, or even ten separate debts before consolidating. We're a broker, not a lender, which means we compare a wide range of specialist lenders to find options that match your specific situation.
When you have money going out to several different creditors each month, it's not just stressful, it's often costing you more than you realise. Each debt typically carries its own interest rate, and credit cards in particular can have rates that make paying off the outstanding balance feel impossible. Store cards and overdrafts are often even more expensive to carry than standard credit cards.
Here's a typical scenario we see regularly. Someone with £30,000 in existing borrowing might have it spread across several different debts, each with its own interest rate and payment date:
Consolidating debts like these into a single secured loan replaces several different payments, interest rates, and due dates with one monthly payment on one date. The trade-off is usually a longer repayment term, and potentially more interest paid over the life of the loan, which is why this decision needs careful consideration rather than being based on the monthly payment alone.
The key to understanding debt consolidation is recognising that you're typically trading a shorter repayment period at a high interest rate for a longer period at a lower rate. Your monthly cash flow usually improves, but you need to understand the full picture.
Minimum payments on credit cards can theoretically take many years to clear a balance while a large amount is paid in interest. A consolidated loan usually runs for longer than a personal loan, and despite the lower rate, could still cost more in total interest because of the extended term. This means you may end up paying more interest overall if you choose a longer repayment period or borrow additional credit.
In our experience helping people with this decision, many find that the breathing room from lower monthly payments allows them to make overpayments when they can, which reduces both the term and the total interest paid.
If you can afford it, even a small monthly overpayment on a consolidation loan makes a real difference over a 15 or 20 year term. Check with your lender that there's no early repayment charge before you commit to overpaying.
Multiple debts, one payment
Talk through your balances, credit history, and property equity with an advisor who compares a wide range of lenders on your behalf.
Almost any unsecured debt can be rolled into a consolidation loan, including credit cards, personal loans, overdrafts, and other borrowing. Lenders regularly accept applications to consolidate a combination of the debt types below.
Secured debts like your existing mortgage cannot be rolled into a debt consolidation loan. Student loans are also typically excluded. Tax debts owed to HMRC are usually not eligible, though some specialist lenders may consider them in specific circumstances.
What you can combine
When consolidating multiple debts, you have two main options: an unsecured personal loan, or a loan secured against your property. Each comes with different terms, such as available loan amount, repayment period, and eligibility criteria, so the right choice depends on your circumstances.
Unsecured personal loans for debt consolidation typically range from £1,000 to £25,000, with terms of one to seven years. Because there's no security involved, interest rates are usually higher than secured options, particularly for those with a lower credit score, and larger unsecured loans can be harder to access.
The main advantage of unsecured consolidation is that your home isn't at risk if you struggle with payments. The downside is that if you need to consolidate more than around £25,000, or your credit history limits your options, an unsecured loan may not be available or may not improve your situation.
Secured debt consolidation loans use your property as collateral. This means lenders can typically offer larger amounts, from around £10,000 up to £500,000, with longer repayment terms of 5 to 30 years, and often at lower interest rates than unsecured options.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. This isn't something to take lightly, and it's always worth discussing thoroughly with an advisor before proceeding. For homeowners with equity and several high-interest debts, the interest savings and improved cash flow can make secured consolidation a practical option.
When you're consolidating multiple debts, it's worth considering whether your chosen solution involves taking out new credit or simply managing your existing debts differently. A debt consolidation loan involves taking a new loan to pay off existing debts, while options like a debt management plan don't involve new credit but instead focus on negotiating repayment terms with your creditors.
Someone consolidating a smaller amount, such as £15,000, might find an unsecured option works well. Someone consolidating £35,000, £50,000, or more usually needs a secured approach to access enough funds at a rate that genuinely improves their situation.
The amount you can borrow to consolidate multiple debts through a secured loan depends mainly on three factors: the equity available in your property, your ability to afford the monthly repayments, and the individual lender's criteria. It's worth thinking about not just the total of your existing debts, but whether you need a small buffer for unexpected expenses too.
If you can't afford the repayments on a debt consolidation loan, you could end up needing to take out further credit while still paying off the original loan, so getting the amount right matters.
Equity is the portion of your property you own outright, calculated as its current market value minus any outstanding mortgage balance. Most lenders will consider lending up to 80-85% of your property value in total, including your existing mortgage.
Example calculation:
This doesn't mean you'd automatically be offered £73,000. Your borrowing amount is also limited by what you can afford to repay each month, which is where affordability assessment comes in.
Lenders calculate affordability by looking at your income after tax and essential outgoings. They'll typically want your total housing costs, including your mortgage and any secured loan repayment, to fall below 45-50% of your net monthly income.
We helped one homeowner in Manchester consolidate £55,000 of debt. With a household income of £4,500 a month and manageable existing mortgage costs, the affordability calculation supported borrowing of around £60,000, giving him room to consolidate everything with a small buffer.
Secured debt consolidation loans typically start from £10,000 and can extend to £500,000 for those with sufficient equity and affordability. The most common consolidation amounts we see fall between £25,000 and £75,000, which covers the typical range of accumulated credit card and loan balances.
Understanding how consolidation rates are worked out helps you assess whether an option genuinely improves your financial position. Lenders typically offer their best terms to applicants with a strong credit profile, while those with a lower credit score may face higher rates or more restrictive terms. Rates change frequently and vary between lenders, so it's best to speak to an advisor for current figures based on your circumstances.
Beyond credit score, several factors influence the rate you're offered. A lower loan-to-value ratio, meaning more equity buffer, typically secures better terms. Employment stability matters too, with permanently employed applicants usually receiving better terms than contractors or those recently self-employed. Your total debt-to-income ratio, how much you owe compared to what you earn, also affects the offers you receive.
Interestingly, having multiple debts doesn't necessarily harm your rate compared to someone with a single debt of the same total value. What matters more is your payment history on those debts. Someone managing six accounts responsibly often receives better offers than someone with two accounts showing missed payments.
Applying to consolidate multiple debts through a secured loan follows a fairly structured process. Here's what to expect when working with an advisor, from initial enquiry through to funds being released.
You'll typically apply to a lender who assesses your eligibility and affordability. If approved, the funds are usually paid into your bank account or directly to your creditors, and repayments are then set up by direct debit each month.
From initial enquiry to your debts being paid off, expect around 4-8 weeks for a straightforward case. Complex cases involving multiple creditors or property-related issues may take longer.
How it works
Initial assessment and eligibility check
A soft credit check and basic financial review takes around 10 minutes online or by phone. You'll provide details of your property, existing mortgage, income, and the debts you want to consolidate. This doesn't affect your credit score.
Full application and documentation
If you want to proceed, you'll complete a full application with supporting documents, typically proof of income from the last three months, recent mortgage statements, bank statements, and statements from each debt to be consolidated.
Property valuation and underwriting
The lender arranges a valuation of your property, either a physical visit or a desktop valuation depending on the loan amount. The underwriting team then assesses your application against their criteria, which typically takes 5-10 working days.
Offer and settlement
Once approved, you'll receive a formal loan offer detailing the amount, term, and monthly repayment. After accepting, a solicitor registers the secured loan against your property, and most lenders pay off your existing creditors directly as part of the settlement.
Eligibility for secured debt consolidation depends on property ownership, income, and credit history. While each lender has its own criteria, here's a general overview of what's usually required.
Many people looking to consolidate multiple debts have experienced credit difficulties, sometimes because managing several accounts became overwhelming. Specialist lenders specifically work with customers who have less than perfect credit.
Lenders may consider applications with County Court Judgements, typically once they're satisfied or over 12-24 months old for the best terms. Defaults are assessed based on age and value, with recent defaults usually requiring an explanation. Missed payments on mortgages or loans don't automatically rule you out, though a pattern of missed payments affects the terms available. Even discharged bankruptcies can be considered, usually requiring at least 3 years since discharge with specialist lenders.
In our experience, around 40% of customers we help with debt consolidation have some form of adverse credit. Matching your profile to lenders whose criteria fit your circumstances is where working with an advisor becomes particularly valuable.
Lenders need confidence that you can afford the consolidated loan. For employed applicants, three months of payslips and bank statements typically suffice. Self-employed borrowers usually need two to three years of accounts or tax calculations. Pension and investment income can also be considered, sometimes with specific documentation requirements.
When you're consolidating debts, the improvement in monthly cash flow often helps with affordability calculations, since the reduction between your current combined payments and the new consolidated payment can be counted toward your disposable income.
If you're struggling to keep up with multiple debts and aren't sure where to turn, MoneyHelper offers free and impartial guidance at moneyhelper.org.uk or by calling 0800 138 7777.
Real examples from our customer base show how debt consolidation works in practice. These are representative scenarios based on genuine cases, with details anonymised for privacy.
Case studies
Any financial decision of this significance means weighing up both the benefits and the potential drawbacks, so you can make an informed choice.
Consolidation isn't the only way to manage multiple debts. Depending on your circumstances, one of the alternatives below might suit you better.
Other options
Balance transfer credit cards
If your total debt is under around £10,000-£15,000 and you have good credit, a 0% balance transfer card could be more cost-effective, offering an interest-free period to pay down balances. The catch is you need good credit for the longest 0% periods, must clear the balance before the promotional period ends, and transfer fees usually apply.
Debt management plans
If you're struggling with payments and consolidation isn't accessible, a debt management plan through a debt charity like StepChange or National Debtline can help, negotiating reduced payments with your creditors based on what you can afford. These plans are free and don't put your home at risk, but they can last many years and will affect your credit rating. MoneyHelper (moneyhelper.org.uk, 0800 138 7777) can also provide free, impartial guidance on your options.
Individual voluntary arrangements
For more severe debt situations where you genuinely cannot repay what you owe, an IVA is a formal agreement to pay what you can afford over typically five years, with the remaining balance written off. This is a form of insolvency that significantly affects your credit rating and has long-term implications.
Remortgaging to consolidate debt
If you have substantial equity and your mortgage is near renewal, remortgaging for a larger amount to release funds for debt consolidation can be an option. This adds the debt to a term potentially stretching 25 or more years, existing mortgage early repayment charges might apply, and some lenders won't allow additional borrowing for this purpose.
Understanding all the costs involved helps you weigh up the true benefit of consolidating. Alongside any arrangement fee, it's worth factoring in your regular household bills too, so you have a complete picture of your monthly outgoings.
Most secured loan lenders charge an arrangement fee, which can usually be added to the loan rather than paid upfront, though this means paying interest on the fee over the loan term. Lenders also require a property valuation to confirm your equity level, and legal work to register the charge against your property, which some lenders cover as part of their product. Some brokers charge fees for their services, while others receive commission from lenders and don't charge you directly, so it's worth clarifying the fee structure before proceeding.
If you want to repay your consolidation loan early, within the first one to five years, an early repayment charge typically applies. These vary by lender but commonly range from 1-5% of the outstanding balance. After this period ends, most loans can be overpaid or settled without penalty.
Common questions
Yes, many people with adverse credit successfully consolidate debts through a secured loan, because the equity in your property provides security that can support lending despite credit issues. You'll typically be offered less favourable terms than someone with a clean credit history, but it can still work out cheaper than continuing to pay high-interest credit card debt. Speak to an advisor about your specific situation.
There's no fixed limit to the number of debts you can consolidate. It's common to combine 5-10 different debts into a single loan. What matters is the total amount and whether this fits within your available equity and affordability. Some lenders prefer consolidation applications because they're straightforward in purpose, even when several creditors are involved.
In the short term, remortgaging involves credit checks that can temporarily lower your score. However, consolidating debt often improves your score over time because you're paying off credit cards (reducing utilisation) and making regular, on-time payments on a single account. The impact varies based on your starting position and how you manage your finances afterwards.
Yes. Joint applications are common for debt consolidation, particularly when consolidating debts that belong to both partners. A joint application can improve affordability calculations because both incomes are considered, though both applicants become jointly liable for the full loan amount regardless of whose debts were consolidated.
When your consolidation loan completes, the lender can pay off your existing creditors directly or release funds to your account for you to clear the debts yourself. Direct payment to creditors is often preferred, as it ensures the debts are definitely cleared. Your existing accounts will then show as settled, and you'll receive confirmation from each creditor that the balance is zero.
This is possible but needs careful consideration. If you take a secured loan to pay off your partner's debts, you become legally responsible for repaying that amount even if your relationship ends. Some couples choose to consolidate jointly held debts but keep individually held debts separate. It's worth discussing this with an advisor to understand the implications.
From initial enquiry to funds being released and debts paid off, typical timescales are 4-8 weeks. Simple cases with straightforward documentation can complete faster, while complex situations involving property title issues or extensive adverse credit may take longer. If you have an urgent deadline, mentioning this upfront helps your advisor prioritise appropriately.
Yes, many people consolidate debts while also borrowing additional funds for home improvements, a car, or other purposes. The same eligibility and affordability criteria apply to the total loan amount. It's worth remembering that all borrowed funds are secured against your property and accrue interest over the loan term.
Refusal from one lender doesn't mean you can't consolidate. Different lenders have different criteria, and comparing a wide range of lenders means there may be other options that suit your circumstances better. If you're refused, ask for the specific reason, as this helps identify alternative lenders who may view your application differently. Sometimes addressing a particular issue, like registering to vote or correcting an error on your credit file, can change the outcome.
For debt consolidation involving multiple debts, using a broker typically leads to a smoother process than applying directly. A broker can identify which lenders suit your specific circumstances, present your application in the most favourable way, and handle communication with multiple creditors during the settlement process. The broker's commission is paid by the lender, so using one doesn't usually cost you extra compared to applying directly.
Yes, though income verification requires more documentation than for employed applicants. Lenders typically want two to three years of accounts or tax calculations, plus bank statements showing income patterns. Variable income doesn't prevent consolidation, but it may affect the maximum amount available or require an explanation of income stability.
A debt consolidation loan is a separate secured loan that sits alongside your mortgage. Refinancing means replacing your mortgage with a larger one and using the extra funds to pay off debts. Mortgage refinancing may offer a lower rate but extends the debt over your full mortgage term, potentially 25 or more years, and your mortgage's early repayment charges may also apply. A secured loan keeps your mortgage separate and typically has a shorter term.
This depends on your current interest rates, the consolidation rate available to you, and the term you choose. Consolidation almost always reduces your monthly payments, but it doesn't always reduce the total interest paid over time. A proper comparison means working out what your current debts would cost if you maintained them versus the total cost of the consolidation loan, which an advisor can help you compare as part of the quotation process.
Debts in arrears can often be consolidated, though lenders will want to understand why the arrears occurred and whether the consolidated payments are affordable. Active collection proceedings or accounts with debt collection agencies may complicate matters. In some cases, addressing the arrears directly before consolidating makes the application more straightforward.
Brokers authorised by the Financial Conduct Authority must comply with data protection regulations and secure handling of your financial information. Reputable brokers use encrypted systems for data transfer and don't share your information with third parties beyond what's necessary for your application. You can verify a broker's authorisation on the Financial Conduct Authority register.
What our clients say
Shortly after I spoke with Anna, she was also very helpful and made it effortless and a nice experience.
Had a really good experience regarding arranging a secured loan. They introduced me to a great advisor. Thanks for the help.
For once a loan transaction without stress and complications. Very impressed and highly recommended.
Thrilled to share my exceptional experience with Money Saving Advisors. The website made it incredibly simple and easy to connect with an advisor. They helped me find the best deal on my remortgage and secured a very competitive interest rate!
Great advice and money saved on mortgage.
I have previously declined a loan of the value I needed from various brokers, but this website found me a reputable broker with surprisingly decent rates.
Secured Loans
Compare rates from a wide range of lenders. Our expert advisors will find the right secured loan for your circumstances.
