Yes, while most debt consolidation loans are only available to homeowners, there are plenty that could save you money if you do not own a property.
A debt consolidation loan lets you pay off your existing debts by transferring them to one loan, with one monthly repayment.
You can use this comparison to find an online personal loan you can use to consolidate your debts.
Getting the right consolidation loan
To find the right loan for your needs, follow these steps:
- 1.
Work out how much you need to borrow: Add up all the debts that you would like to consolidate and include any extra charges you have to pay them off. This will be the amount you need to borrow.
- 2.
Decide how long you need to pay it back: The longer you take to pay your loan back the lower your monthly payments will be. However, if you borrow for longer you will pay more overall.
- 3.
Look for the lowest interest rate: This is the main cost of your loan, so you need to look for the lowest APR. This is the rate lenders advertise but it is not guaranteed as they only have to give it to 51% of borrowers.
How much can you consolidate?
You could consolidate up to £25,000 using an unsecured personal loan.
How long can you borrow for?
Most unsecured debt consolidation loans offer terms between one and five years.
If you need longer to pay back your loan a few lenders offer terms up to seven years, but this tends to only be for loans over £10,000.
You can use our loan repayment calculator to see how different terms could affect your monthly payments.
Getting the cheapest loan
To make consolidating your debts worthwhile you need to find a loan that offers a cheaper interest rate than you are currently paying.
You can use this comparison to compare interest rates before you get quotes from each lender.
Explore other options
A debt consolidation loan may not be the best way to tackle your debts. Some cheaper alternatives could be:
0% money transfer card: You can use these cards to move money into your bank account. You pay a small transfer fee and can then pay them back interest free for a set number of months. Here's how they work.
0% balance transfer card: If you have credit card debts, you could use a 0% balance transfer to move what you owe to a new card. You may have to pay a small fee and then you can pay it back interest free for a set time. Here's how they work.
Unsecured debt consolidation loan FAQs
Do I have to pay off all my debts with the loan?
No, you can choose which debts to pay off. However, if you keep any open you have to show you can afford to pay them back alongside any new loan.
Will the money be paid straight to my other lenders?
No, it is usually paid to you and then you need to pay off each of your debts separately.
Will I have to pass a credit check?
Yes, lenders will check your credit record when you apply for a loan. If you are worried about bad credit here is how to overcome it and find a loan.
What happens if I cannot make my repayments?
You may be charged a fee and your credit record will be damaged. Here is what to do if you cannot pay back your loan.
About our loans comparison
Who do we include in this comparison?
We include every unsecured loan you can get in the UK and peer to peer loans from our panel. They are all from lenders regulated by the Financial Conduct Authority. Here is more information about how our website works.
How do we make money from our comparison?
We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.