Debt Consolidation Loans for Bad Credit
Got bad or poor credit? Not a problem
With a debt consolidation loan, you can take multiple debts and consolidate them under one affordable monthly payment. This can effectively pay your lenders immediately and just leaves you just one company to repay making your money situation much easier to manage.
We believe your financial history shouldn’t get in the way of your application. This means, even if you have bad or poor credit, we’ll still consider you for a loan.
Apply Now
In this article, we'll cover:
- What is a debt consolidation loan?
- How much can I borrow?
- How does a debt consolidation loan work?
- The difference between unsecured and secured debt consolidation loans
- Why should I apply for debt consolidation with bad credit?
- How can a debt consolidation loan help me?
- Will a consolidation loan affect my credit score?
- Will I need a credit check to get a debt consolidation loan?
- What debts can I resolve with a consolidation loan?
- Why we help people with bad credit get debt consolidation loans
- Debt consolidation loans for bad credit FAQs
Why Choose Us?
One affordable payment
Focus on only one monthly payment.
Bad credit?
No problem. We consider all credit scores - even bad ones!
Expert advice
We are experts in debt solutions.
No upfront fees
No hidden upfront fees to worry about.
Tailored for you
Real rates tailored just for you.
What is a debt consolidation loan?
Through debt consolidation you borrow an amount of money equal to or exceeding the total value of your existing debts. These funds are then used to repay your creditors while leaving you with one monthly payment instead of several.
This moves your debt onto one lender. This means you only have one interest rate, one single monthly payment, and one account to manage. For this reason, the main appeal behind a debt consolidation loan is often management – restoring control and improving your financial situation, helping to make your life easier.
How much can I borrow?
With a debt consolidation loan, you can borrow anywhere between £5,000 and £75,000.
Apply Now
Representative Example: Borrowing £7,500 over 60 months, repaying £167.57 per month, total repayable £10,054.20.
Total cost of credit £2,554.20.
Interest rate 12.9% (variable).
The lenders on our panel offer loans for 12-120 months, with rates from 4.4% APR to 49.9% APR.
How does a debt consolidation loan work?
Debt consolidation loans work by allowing you to borrow enough money to pay off multiple loans. You just pay back one lender, that means one monthly repayment only.
When you apply for debt consolidation, one of our advisors will identify whether this solution is right for you. Assuming you have a sustainable source of income to make loan repayments and you’re a UK resident, you may qualify. Then comes the choice between a secured or unsecured loan.
What's the difference between unsecured debt consolidation loans and secured debt consolidation loans?
An unsecured debt consolidation loan is the type of loan you're probably most familiar with. It is not secured against an asset so you won't risk losing your possessions, but it could have a higher interest rate.
A secured debt consolidation loan is a secured loan, meaning it's fixed against a property or other asset. This means if you miss your debt consolidation loan repayments, they could ask you to sell your home or other asset so you can meet the monthly repayments.
Why should I apply for debt consolidation with bad credit?
Debt consolidation can still be an option for you even if you have poor or bad credit. All scores are considered and you’ve got nothing to lose by getting in touch. All you have to do is use our quick application form, tell us a little bit about yourself, and you could have the funds you need paid straight into your account.
How can a debt consolidation loan help me?
If you’ve got multiple creditors each asking for money, you’re aware of just how stressful this can be. Managing these and ensuring each gets paid on time, is not only time-consuming – it can sometimes be impossible.
This is where debt consolidation comes in. Instead of juggling bills to your creditors, you can pay them all off and hopefully never have to worry about these firms again. As well as this, a debt consolidation loan can leave you better off – in the long run as well as monthly. Take a look at the example below:
Example debts
Total owed
Monthly payments
Personal loans
£20,000
£867
Credit cards
£7,412
£245
Payday loans
£252
£23
Store cards
£289
£26
Total
£27,953
£1,161
£28,000
£932 – that’s more than £200 extra in your bank account per month!
In essence, a debt consolidation loan helps you by allowing you to:
- Make only one payment per month;
- Focus on one interest rate;
- Simplify communications by only having one lender;
- Have fewer payments going to lenders.
It is worth noting however, that debt consolidation loans do also come with a downside which can include:
- Increasing the length of time it takes to repay your debt;
- It could end up costing your more depending on the APR rate offered;
- If you’re not careful and continue spending on any existing score/credit cards, you could end up making your situation worse.
Will a consolidation loan affect my credit score?
Debt consolidation loans, like any kind of personal loan, will affect your credit score.
However, if you're meeting your monthly payments:
- on time
- and in full
you should see an improvement in your credit score, in the long run.
Will I need a credit check to get a debt consolidation loan?
You'll always be required to have a hard credit check when submitting a loan application, even if it's a debt consolidation loan. However, consolidation loan companies will be understanding if you have a bad credit history. Most people look into debt consolidation loans because they're missing their current monthly payments, which means they're likely to have a bad credit score.
So don't be put off by a company checking your credit report, they're just being a responsible lender, and are still likely to consider you.
However, our online application won't hurt your credit score.
What debts can I resolve with a consolidation loan?
With a debt consolidation loan, generally speaking, all unsecured debts can be consolidated. This includes:
For more information, take a look at our guide ‘What debts can be consolidated?’.
Why we help people with bad credit get debt consolidation loans
If you have a poor credit history, it can feel like the financial world is closed to you. However, with a debt consolidation loan, you can start to repay your creditors while making positive steps towards ultimately improving your score. Even people with very poor credit can still be helped by a debt consolidation loan.
Whether you have bad credit or not, we could still help you on your search for debt consolidation loans bad credit and will always strive to find you the best deal possible.
Apply Now
An Expert Opinion on Debt Consolidation Loans for Bad Credit
"Debt consolidation loans can be a helpful solution for those with bad credit who are struggling to manage multiple debts. However, it's important to note that obtaining a debt consolidation loan with bad credit may be more difficult and may come with higher interest rates than if you have good credit.
Before taking out a debt consolidation loan, it's important to make sure that the APR and repayment terms you are offered are a better option for you in comparison to your current situation.
Overall, debt consolidation loans can be a helpful tool for managing debt, but it's important to make sure you fully understand the terms and conditions of the loan and can afford the monthly repayments before proceeding."
— Andrew Hagger, Financial Consultant at Consolidation Express.
Debt consolidation loans for bad credit FAQs
Taking out debt consolidation loans for bad credit can be a good way to improve your credit report. There are plenty of loan places for bad credit available to support people in improving their rating, to increase their chances of getting credit in the future. However, your rating will usually initially worsen as you’re taking out a new line of credit. Eventually though, your credit score should improve as you make regular payments on time. Furthermore, as your credit utilisation ratio decreases and the number of creditors shrinks, you should also start to see improvements in your credit rating.
It is important to monitor your credit score when searching for the cheapest debt consolidation loan that’s available to you. This is because your credit score affects the interest you will pay. In some cases, you may be offered a high interest rate on your debt consolidation loan which will increase your overall repayment total.
If you want to find out more information, we’ve written a useful guide on the matter – 'How does debt consolidation affect credit scores?'.
We understand that if you have a history of poor credit, you might get a bit nervous about making an application for a debt consolidation loan. It’s worth noting that once you apply for debt consolidation, your credit score will eventually be checked.
All ratings are considered for loans with Consolidation Express, even poor credit scores.
Although you cannot secure a debt consolidation loan with no credit check, having a poor history may not cause your application to fail. In fact, you have nothing to lose by applying for a debt consolidation loan.
We’re a broker, not a lender, so the price of a loan is dependent on your provider. However, because we want to make sure you’re getting a fair deal – and that debt consolidation is the best option for you – we’ll be clear about the costs involved.
There is no limit on how many debts you can consolidate into one loan. But you can only consolidate unsecured loans. Unfortunately this means you can't consolidate debts such as a mortgage.
You won't have to pay off all your debts with a consolidation loan. Some loans won't be included such as secured loans, like mortgages or car loans. However, it makes the most sense for you to include all your existing debts if you can. This is to reduce the number of different monthly payments you're making to creditors and ultimately, reduce your monthly outgoings.
Free debt consolidation loans are a myth. All consolidation loan providers will add some kind of interest or charges to the loan.
No guarantor needed – but you can have one if you like.
Although some loan providers will insist you have a guarantor if you have bad credit, this is not essential with us. If you don’t want a guarantor, then we will still strive to find you debt consolidation without one. However, if you want the added security of a guarantor with your consolidation loan, this isn’t a problem either.
Regardless of your choice, we’ll find you the best debt consolidation offers we can. You can find more information on our guarantor policy available here.
Although life would be easier if this was a straightforward question, it unfortunately isn’t. As there is no universal rating system in the UK, it’s a little difficult to answer what a bad credit rating really is. For example, credit agencies Experian and Equifax both use different criteria to assess a person’s history.
In the case of Experian, the firm rates credit scores out of 999. Anything between 0 and 720 is generally regarded as being ‘poor’ or ‘very poor’. Equifax, on the other hand, rates scores out of 700 and will detail ratings under 379 as being poor or lower.
Therefore, to assess whether you have a bad credit score, you should contact one of these organisations and see what rating they give you. If you fall into one of the above categories, then this number may prevent you from obtaining certain financial products or low interest rates.
APR stands for annual percentage rate. It is the official term used to help you understand the interest rate and the total cost of borrowing. All lenders must disclose their APR before providing a financial product. In our case, the lenders we work with offer loans between 12 and 120 months, with rates from 4.4% APR to 49.9% APR.
The details of your repayments will be available in the policy documents provided by your consolidation loan provider. If you can’t find these, please contact the organisation.
You could get the money you need within 24 hours. However, the exact time scales depend on your consolidation loan provider.
Once you have the money you need, you use the funds to close accounts with your creditors one by one. We’ve covered this in more detail in our guide ‘How to consolidate debt’.