Qualify for lower monthly payments with a debt consolidation loan
It is surprising how above £66,000(roughly) debt is owed by each household in the UK.
Are debts controlling your life? It is bothering when multiple repayments are draining your income every month. Combine them into a simplified payment structure with a debt consolidation loan in the UK.
Regaining control over your finances requires an effective strategy, such as debt consolidation. With Safemoneyloan, you can work out a rate that’s lower than what you are paying on existing debts. This is a reputable online lending platform where you can expect to get loans at competitive rates.
No need to keep track of multiple payments, due dates and interest rates. Avoid unnecessary stress by merging all your ongoing debt payments into one single loan.
What are debt consolidation loans?
A debt consolidation loan allows borrowers to combine several debts into a single loan. You will need to focus on managing a single monthly payment in place of multiple ones. There will be fixed interest rates and defined terms of repayment.
You can use this loan for debt consolidation to pay off existing liabilities, such as store cards, credit cards, personal loans, or overdrafts.
Let us take an example:
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Scenario before debt consolidation
This is an example of a person with £3000 in credit card debt at 22% interest, £2000 in a personal loan at 15% interest, £1000 in store card debt at 30% interest, and £1000 in overdrafts at 35% interest (i.e., fees). Therefore, the total balance is £7,000, which comes down to a £300 monthly payment, and the monthly interest is £135/month (approx.). -
Scenario after debt consolidation
That person can take out £7,000 to consolidate debts at a 12% interest rate. This arrangement will provide access to £210 monthly payments. The interest, i.e., payable monthly after consolidation, will be £70. You can save £65 every month by consolidating debts.
How debt consolidation loan works in the UK?
There is an easy access of debt consolidation loan online. First, check your eligibility to proceed confidently with the application.
Who qualifies for loans intended for debt consolidation? You are eligible if:
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You are a UK resident with over 18 years of age
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You have a stable income source as employed, self-employed or unemployed
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You hold an active UK bank account
After eligibility checks are completed, you can apply for a debt consolidation loan without any hesitation.
- 1. Apply online: Fill out the online application form with personal details as enquired.
- 2. Wait for processing: Once we receive your application, we will run a few checks.
- 3. Pre-approval decision: Loan rates and terms will be customised and shared with you.
- 4. Agree and sign: If you accept the offer, you can sign the loan agreement after carefully reviewing it.
- 5. Disbursement of funds: We will transfer the loan money into your bank account once we receive your acceptance.
Can I get a debt consolidation loan with bad credit?
Yes, you can get debt consolidation loans for bad credit in the UK. Although you will come across limited opportunities to borrow with low credit scores, Safemoneyloan is here to help you pre-qualify for loans. We will have no problem getting loan requests from individuals with defaults, missed payments, etc.
While the rate of interest might remain on a higher side because of poor credit, it is going to be lower than what you have been paying for individual debts. Low interest rates with a debt consolidation loan when you have low credit scores are highly unlikely. However, you can work on these steps to get competitive rates from us.
- Reduce your debt-to-income ratio
- Show a consistent source of income
- Increase your earnings (if needed)
- Choose a realistic loan amount
- Show recent positive financial behaviour
What are the pros and cons of debt consolidation loans?
To be able to make sure that you are getting the best debt consolidation loans, you must assess their advantages and disadvantages. It is useful to understand how you can benefit and when you should stay alert.
Pros of getting loans for debt consolidation
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From multiple payments to one payment
This can be a huge relief when you can club several outstanding payments into a single loan. -
Minimise monthly payments
When you have the privilege to merge various unpaid dues, your monthly outgoings can decrease. -
No role of a guarantor
Get a debt consolidation loan with no guarantor condition by establishing your affordability at the time of applying. -
Specified repayment structure
There will be clarity about the amount you will have to repay and the tenure you will get. It helps in easy budgeting. -
Risk of missing payments is low
Monthly payments will be smaller portions of the actual repayment amount. Arranging a small amount should not be difficult. -
Credit score improvement
Timely repayment of a debt consolidation loan with low credit scores can help improve your credit history.
Cons of getting a loan for debt consolidation
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No reduction in total debt
The amount you still owe will remain the same. However, the payments will be restructured for your convenience. -
Late repayment will be expensive
If you fail to repay loans on time, late fees will accumulate. Be financially disciplined to stay on time while making payments. -
Impact on credit scores
Late payments on a debt consolidation loan with poor credit will further blemish your credit scores. Plan for repayment in advance.
Unsecured Vs secured debt consolidation loans
Getting an unsecured debt consolidation loan in the UK might feel safer because it doesn't involve assets, unlike its secured counterpart. Here are the other major differences for you to understand.
| Unsecured loans | Secured loans |
|---|---|
| Interest rates might range from 10% to 45% APR | Interest rates might range from 5% to 15% APR |
| No risk on assets while borrowing | Late repayments may lead to loss of assets |
| Processing is faster, even leading to same-day funding | Processing takes time because of major assessments |
| Minimal documentation will be required | Extensive paperwork will be part of the lending process |
| Getting an unsecured debt consolidation loan with bad credit is slightly tough | Poor credit scores are not concerning because of asset involvement |
Is it possible to get the cheapest debt consolidation loan?
No, we do not promise such things. However, we want you to use the debt consolidation loan calculator to determine how much interest you will pay on a given loan amount over a specified period.
Here is a simple, user-friendly table to get an idea of how costing works with these loans by keeping the repayment term constant, i.e., for 5 years.
| Loan amount | Typical APR | Monthly payments | Total interest | Meaning |
|---|---|---|---|---|
| £2000 | 18% to 35% | £55 to £75 | £500 to £1000 | Rates can be better |
| £5000 | 12% to 25% | £140 to £170 | £1700 to £3200 | More competitive rates |
| £7000 | 10% to 20% | £180 to £210 | £2500 to £4500 | Ideal debt consolidation window |
| £10,000 | 6% to 15% | £240 to £290 | £3000 to 5500 | Best rates with strong credit scores |
Instead of looking for a debt consolidation loan at low interest rates, choose an affordable amount and get a fair rate.
What alternative loans are available to consolidate debts?
If this financing option does not seem to be the right fit, you can explore the other loan options to handle multiple debt problems.
- Personal loans: You can use them for a wide variety of purposes that include debt consolidation as well.
- Secured loans: Opting for a larger amount to consolidate debts is easier when assets are involved.
- Short-term loans: You can get an emergency loan for urgent and smaller debt payments.
- Instalment loans: They come with a structured repayment setup like consolidation loans.
Why borrow directly from Safemoneyloan?
When you decide to get a debt consolidation loan from a direct lender, you choose speed, clarity and control. The different ways we can help you to have a smooth borrowing experience are:
- Tailored loan solutions: We personalise loan terms and rates after assessing your application carefully.
- More transparent process: Our fees and charges will be clearer to you, thanks to a well-documented fee structure.
- Speedy communication: You do not have to wait longer to communicate your issues or confusions to us.
- Effective customer support: We are ready to help you at every step, from application to approval.
- No middleman: The borrowing process will not get stretched as we will directly process your application.
FAQS
How much can I borrow for debt consolidation?
Loan amounts will range from £1,000 to £10,000. You can borrow any amount within this range based on your income, credit scores, debts, and financial commitments.
Will a debt consolidation loan affect my credit score?
Pre-qualification will not impact your credit scores. This is because initial checks are typically soft searches designed to assess your affordability. The main purpose is to evaluate your ability to repay loans on time.
How long does a loan for debt consolidation take to get approved?
Processing does not take longer as the initial checks are less time-consuming. Within a short span, you can get a response from us in the form of a customised loan deal. In some cases, decisions are also made within 24 hours.
What is the minimum credit score for a consolidation loan in the UK?
There is no fixed minimum credit score range to obtain access to these loans. If your credit scores are 700+, your chances of getting approved at better rates will be improved.
Can I get a joint loan for debt consolidation?
Yes, you can borrow money jointly to consolidate debts. You need to apply with a co-borrower, preferably someone who shares a common goal. Both incomes will be combined and assessed, and both will be equally responsible for repaying loans.
Are there guaranteed approval debt consolidation loans?
No, guaranteed approval cannot be provided, as some assessments will be mandatory, and you cannot skip them. We cannot offer loans without confirming if you can repay loans within a specified timeframe.
Do I need a guarantor for consolidation loans?
If you have to apply for very bad credit loans to consolidate debts, you will be required to produce a guarantor. Such requirements arise when you cannot make sure about repaying loans within the given tenure.