Debt Consolidation Loans
Borrow with us and you could receive your loan in as little as 3 days.
Borrow up to £250,000
Flexible terms from 3-25 years
We consider all credit histories
Employed, self employed, pension and benefit income
We're a direct lender, so there are no hidden broker fees
Representative Example: A secured loan of £43,000 payable over 9 years on a fixed rate of 10.43% for the first 5 years, followed by a variable rate, currently 12.00%, would require 60 monthly payments of £651.19 followed by 48 monthly payments of £670.67. The total amount repayable would be £71,263.56, this includes interest, an arrangement fee of £1,999 and a processing fee of £499. The overall cost for comparison is 12.9% APRC representative.
How it works
Organising your finances can sometimes feel stressful, but we want to make it as easy as possible for you.
In just 3 simple steps you could have the money in your bank account. All you need to do is:
1: Enquire
Complete our quick and easy online enquiry form. Alternatively, you can speak to an advisor instantly by calling us or starting a live chat.
2: Your details
One of our qualified advisors will call you to discuss your enquiry and work out a monthly payment that meets your needs and circumstances.
3: We'll do the rest
We'll help you complete the paperwork and any other supporting documentation required.
What do our customers say?
You can relax knowing you’re working with a highly rated team. But don’t just take our word for it, visit our website and read our reviews – they speak for themselves.
What is a debt consolidation loan?
A debt consolidation loan is used to pay off one or multiple high interest debts and combine them into one loan.
Borrowers usually do this to make their debts easier to manage as it simplifies your repayments. Not only does it make it easier to manage, but it can also reduce the amount of interest you pay by having all of your debt in one place.
Borrowers can use their home as a security for a debt consolidation loan. Many borrowers take out a secured loan to consolidate their debt, as they tend to have a lower rate in comparison to an unsecured loan. This is because a secured loan uses your property as security and there is less risk.
What can a debt consolidation loan be used for?
A debt consolidation loan can be used to pay off various types of debt, including:
- Credit cards – these can be an expensive way to borrow in the long term due to the high APRs that credit cards can often have.
- Personal loans – these can be unsecured loans that you may have taken out in the past to buy a car, go on holiday or make home improvements.
- Overdraft – some borrowers pay off their overdraft due to high interest rates their bank is charging.
Why choose Central Trust?
35 years' experience
We are one of the UK's longest established specialist lenders trading since 1988 giving us over 35 years' experience providing secured loans, homeowner loans and second mortgages.
Simple application process
You can call our team directly on 0800 980 6273 (Mon-Fri:8:00am-7:00pm) or you can enquire online at any time using our quick and easy online form.
All credit considered
We understand that life happens and there's more to your story than your credit score or recent pay slip. So if you have a less than perfect credit score we could still help.
How does debt consolidation work?
Firstly you need to look at your current debts. Decide which debts you wish to consolidate and then calculate the total value of the loan you’ll need in order to consolidate them.
Your loan lender will then discuss your requirements and work out a monthly payment and loan term that meets your needs and circumstances. The adviser will also look at whether it is appropriate to secure a previously unsecured loan and look at the costs associated with increasing the period over which the debt is to be repaid.
When you have been approved for a loan, the lender will likely pay the creditors directly, so you won’t have to do it yourself. Your debt consolidation loan will then work like any other loan, you will have a monthly payment until you have made all your payments over the loan term, unless you decide to settle your loan early and pay it off.
Is debt consolidation a good idea?
There are different factors to consider before taking out a debt consolidation loan.
Ultimately, it depends on your financial situation and whether or not it is the right option for you. Below are some pros and cons to help you make the right choice.
Pros:
- Having just one loan will reduce the amount of repayments you have each month, especially if you have quite a few outstanding debts accruing interest.
- Debt consolidation loans tend to have lower APRs in comparison to other types of borrowing like pay day loans and credit cards.
- Consolidating your existing debts into one loan can make it easier to manage and keep track of, particularly if you have several debts spread across different organisations.
- As it’s easier to make one repayment every month, it means that in time you could boost your credit score.
Cons:
- If you decide to consolidate your debts with a secured loan and struggle to keep up with the repayments your home or vehicle could be repossessed.
- If you don’t make your monthly repayments on time, in full each month you will damage your credit score.
- It’s important to review your current debts, if you have multiple debts, consolidating them into one loan could mean you end up paying more, especially if the new rate is significantly higher.
Case studies
Home improvement loan
For an applicant with poor credit history.
Secured loan
For a self-employed client with limited trading history.
Debt consolidation loan
For an applicant with multiple lines of credit.
How much do debt consolidation loans cost?
Similar to other loans, the main costs of a debt consolidation loan are the fees and interest rate. However, the cost of a debt consolidation loan can also depend on a various factors, including:
- Loan amount – this will depend on how many debts you are planning on consolidating
- Total interest payable- this may be more than you are currently paying for the unsecured credit
- Loan term – your monthly repayment will depend on how long you intend to borrow the money for
- Other fees – such as arrangement fees (also known as lender fees) and broker fees
- Early repayment charges (ERC’S) – these may apply to your loan. This means if you wish to repay the money you’ve borrowed back earlier than planned, an early repayment charge may stand. The amount depends on the lender, so it’s important to bare this in mind then agreeing to your loan.
Ultimately, your loan term and the interest rate you are offered will determine how much your monthly payment will be.
Can I get a debt consolidation loan with bad credit?
If you have struggled with debt in the past, have a bad credit score or have previously been declined by lenders due to your credit history, it doesn’t mean that every lender will turn you down.
Whilst some lenders may not be able to assist people with bad credit, at Central Trust, we consider all credit histories, including defaults, CCJ’s, missed payments and those on debt management plans to offer debt consolidation loans with poor credit. These are however subject to our criteria and underwriting standards.
We consider all applications on an individual basis, so whatever your credit circumstances we will try our very best to help you.
Ready to enquire?
Talk to our qualified mortgage experts now
Friendly UK based advisors
Enquiring won't affect your credit rating
Fast turnaround times 7-10 days is possible
No phone menus - immediate contact from our advisors
We are a direct lender, so we'll work with you from start to finish
FAQ's
Your credit score won’t decrease after a soft search, however it could after a hard credit search is completed. However, a hard credit search only happens if you choose to proceed with the loan. It’s important to bear in mind that if your credit score does decrease is will only be temporary. If you consistently make your payments on time its likely your credit score will get better.
The main benefit of getting a debt consolidation loan is that there is only one repayment to make each month. Rather than having multiple debts to repay, a debt consolidation loan puts all of your existing debts into one payment, which makes budgeting easier to manage. Alongside this, having one repayment per month means that you are more likely to meet monthly payments on time therefore protecting your credit score.
On the other hand, if you miss frequent mortgage payments then you are at risk of being set back further and your credit score being affected.
Another drawback of a debt consolidation loan is that they can include additional fees and payments, so it is important to consider the potential additional expenditure that you may encounter when enquiring for a debt consolidation loan.
The type of documentation you’ll need differs depending on your situation. However most lenders will initially ask you about the following:
- Proof of income
- Property information
- Credit history
Possibly. A debt consolidation loan can be used to combine all your existing debts into one, this includes credit cards or unsecured loans. However, this is dependent on how much you’re looking to raise and how much equity you have.
This depends on the lender you apply with and what type of credit score they would be willing to accept. Unlike other lenders, we consider all credit histories. We understand that life happens and there’s more to your story than your credit score or your recent pay slip.