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Compare Our 6 Best Debt Consolidation Loans For Bad Credit

Compare consolidation loans for bad credit that could cut your monthly repayments down to just one even if you have a poor credit history.

  • Compare loans from dozens of providers
  • Consolidate debt into a single monthly payment
  • Apply in minutes
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1

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Answer a few quick questions. This will not impact your credit score.

2

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3

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See the interest rate you’re eligible for before you apply

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Debt consolidation loans for bad credit deals

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4 results found, sorted by lowest representative apr. How we order our comparisons.
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Monevo Personal Loan
Loan amount
£1,000 to £35,000
Representative APR
10.6% APR (£15,000 to £19,999)
Loan term
1 year to 5 years
Monevo is a credit broker and not a lender.
Representative Example: The representative rate is 10.6% APR (fixed) so if you borrow £15,000 over 5 years at a rate of 10.6% p.a (fixed) you will repay £319.57 per month and £19,174.37 in total.
Eligibility
UK Resident
Guarantor Requiredfalse
Maximum AgeUnlimited
Minimum Age18 years
Minimum Income£7,000
Credit Rating Acceptedpoor
Everydayloans Personal Loan
Loan amount
£1,000 to £15,000
Representative APR
99.9% APR (£1,000 to £15,000)
Loan term
2 years to 5 years
No effect on your credit rating on initial application. No fees or charges. T&Cs apply.
Representative Example: The Representative APR is 99.9% APR (variable) so if you borrow £3,000 over 2 years at a rate of 71.3% p.a (variable) you will repay £238 per month & £5,706 in total.
Eligibility
UK Resident
Guarantor Requiredfalse
Minimum Age21 years
Minimum Income£15,000
Credit Rating Acceptedpoor

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Your personalised bad credit loan results are powered by Monevo. They make sure you only see real interest rates. Not just estimates like some lenders show you.

What is debt consolidation?

A debt consolidation loan lets you pay off existing debts by paying them off with a single loan. With all your debts paid off, you only have to make one monthly payment to repay the debt consolidation loan instead of several payments to different lenders.

Can you get debt consolidation loans for bad credit?

The good news is that with consolidation loans, bad credit isn’t always a deal breaker. Some lenders are still willing to offer you a bad credit consolidation loan, even if you’ve had financial problems in the past.

But having bad credit usually means you’ll have to pay higher interest rates and it may also limit how much you are able to borrow.

What kinds of debt consolidation loans are available

Secured debt consolidation loans

With secured debt consolidation your loan is secured to any equity you have in your home or another property. These loans are thus only available to those who own a property.

The advantage of a secured loan is that you're more likely to be offered a lower interest rate on your loan and you are typically able to borrow a much larger amount.

The downside is that if you're unable to keep up with repayments or default, you could lose your home

Unsecured debt consolidation loans

You don't need to be a homeowner to be eligible for an unsecured debt consolidation loan. Your eligibility is based mainly on your credit history and your ability to pay back the loan.

These may be more difficult to be approved for, especially with bad credit. However, that doesn't mean that you can't get unsecured debt consolidation loans with bad credit. You may have to pay a higher interest rate, and be limited to a smaller loan.

How to find the best bad credit loan for debt consolidation

1

Work out how much you owe

Before you look for a bad credit consolidation loan, you need to check if there are any fees if you pay back your existing debts early. You’ll also need to work out the total of your existing debts. Bad credit consolidation loans can usually combine your debts from loans, overdrafts and credit cards.

2

Work out how much you can afford to pay each month

If you’re looking at debt consolidation loans for bad credit, you should draw up a budget to see how much you can afford to repay every month. It’s even more important to do this if you have bad credit, because you need to avoid further damage to your credit record.

3

Compare rates for loans that fit your criteria

When you start looking for consolidation loans for bad credit, you should try to find the lowest rate possible. Ideally, you’ll want to borrow over the shortest time you can while keeping your monthly payments affordable. You can use this comparison to search for bad credit debt consolidation loans from regulated lenders.

Can you get a bad credit debt consolidation loan without a guarantor?

You don’t always need a guarantor for consolidation loans for bad credit.

But if you’re struggling to find a bad credit consolidation loan, you could think about finding a guarantor. Your guarantor would be a family member, relative or friend, who is financially secure and would be responsible for making your repayments if you couldn’t.

Having a guarantor makes lenders more likely to accept your application for a debt consolidation loan as it reduces their risk.

What to consider when consolidating debt ...

Will it save you money?

It depends. Loans to pay off debt are a good idea if the payments are affordable, the loan has a lower interest rate, and it won’t take you much longer to pay off your debts.

With a debt consolidation loan, bad credit won’t always affect your eligibility. So it can be a good way to help you manage your money if the loan meets the criteria mentioned above.

However, it doesn't always mean that you'll save money in the long run. In many cases, the lower monthly payments are achieved by spreading the debt over a longer period, which means you pay more interest overall.

Will it affect your credit report?

Having a debt consolidation loan on your credit report isn't necessarily bad. It's likely better than having several credit cards and other debt. If a bank or provider does a hard credit check and sees that you've consolidated your debts with a loan, they'll understand your reasons for it.

What it'll show is that you were approved for a loan, and if you're keeping up with repayments it'll help you improve your credit score going forward. Consolidating debt shows that you've been proactive about taking steps to manage your finances and reduce your debt.

What are the pros and cons of debt consolidation loans for bad credit?

  • Simplify repayments into a single payment
  • Can reduce the amount of interest you pay
  • Monthly payments may be more affordable
  • Can take longer to pay off debt
  • You may pay more in interest overall
  • You may have to pay additional fees

"Debt consolidation can be a useful way to pay off debt, but only in the right circumstances. While debt consolidation can lower monthly payments, that's often achieved by spreading the loan over a longer period, which means you'll pay more in interest overall."

What alternatives are there to consolidation loans for bad credit?

Consolidation loans for bad credit are sometimes a good option. But there are alternatives if a bad credit consolidation loan won’t work for you or if you can’t get accepted for one.

0% balance transfer credit card

You could think about getting a 0% balance transfer credit card. You could still consolidate your debts, and it’d give you around 6-12 months interest-free.

Second charge mortgage

Although this would put the equity in your home at risk, if you’re a homeowner this another alternative to a debt consolidation loan.

If you're struggling with debt ...

If you feel your debts are becoming unmanageable, talk to your lenders as early as possible. You might be able to negotiate lower payments over a longer period of time.

There are also various debt charities such as StepChange, National Debtline and Citizen's Advice. that you can speak to for support¹. They might be able to help you devise a debt management plan.

Debt consolidation loans for bad credit FAQs

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Why compare debt consolidation loans for bad credit with money.co.uk?

By comparing loans, you could save money on your interest payments. Our award-winning loan comparison service makes sure you get our best interest rates. Our aim is to provide you with the most up-to-date information, as well as useful tools and calculators so to help you make life's most important decisions and take control of your money.

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¹ StepChange, National Debtline and Citizen's Advice are some of the UK's leading debt charities where you can get free expert debt advice to help you get out of debt.

Last updated: 9 September, 2021