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Consolidation Loan Misconceptions: “You need a good credit score to get a Consolidation Loan”

It is a common misconception that people with bad credit cannot be accepted for Debt Consolidation Loans. Find out more about consolidation loans for bad credit.
An image of a balance scale with bad credit on one side and good credit on the other.

We often hear people say that consolidation loans are only available to people who have good/decent credit at the time of application, however, this is a myth. There are companies in the UK that offer Consolidation Loans to people with all kinds of credit histories, good or bad.

What is a debt consolidation loan?

Before we can discuss how some loan companies offer consolidation loans to people with poor credit, we must first understand what a consolidation loan is…

Debt consolidation loans are designed to help you get rid of your debt by taking out one lump sum to pay off the companies you owe money to. From this, you may only have to then make one monthly payment to one creditor, rather than multiple payments to multiple creditors. By consolidating your existing debts, your monthly debt repayment total may reduce, and you may find it much easier to keep track of your money.

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Are debt consolidation loans available for people with bad credit?

Although it is true that trying to get any type of loan with poor credit may be difficult, it is important to note that it is not impossible. Therefore, even though maybe slightly more challenging for someone with poor credit to be approved for a consolidation loan, it can be done.

The reason some companies, such as ourselves, still consider people with poor credit for debt consolidation loans is that we believe it is unfair to judge someone based on their credit file alone. As a result, our team of experts chat to all our customers about their current financial situation. This allows us to confidently assess if someone is suitable for a consolidation loan.

We always ensure that our loans are affordable for our clients before we accept them for a loan.

To put it simply, yes there are consolidation loans available for people with bad credit. Here at Consolidation Express, we consider all credit histories for consolidation loans because other factors can help us to determine if a debt consolidation loan is the right debt solution for someone.

Consolidate My Debts
A woman pointing at a pound sign on a calendar.

Would a debt consolidation loan make my credit score worse?

Providing you keep up with your loan repayments and pay them on time a Consolidation Loan should not harm your credit score.

If you are looking for ways to improve your credit rating, we have some top tips for you here.

Consolidate Your Debts
An advisor pointing to a screen displaying Rep APR.

APRs from 5.8% to 89.9%

We are a broker, not a lender.

Unsecured Loan Representative 69.9% APR

Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.

Secured Representative 11.7% APR

If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.

Further reading

What are the Different Kinds of Unsecured Loans?

Understand what an unsecured loan is, and how best to use the different kinds of unsecured loans in 2023.

What are the Different Types of Secured Loans?

With so many different types of loans available, it can be difficult to know which is right for you. For more information on secured loans, read this expert article.

Persistent Debt – What Does it Mean for Your Credit?

Persistent debt can affect your credit rating for a significant time period. Read to find out more.