Debt Consolidation
Find out whether consolidating your UK debts into a single personal loan saves you money. Enter your existing credit cards, loans and store cards alongside a consolidation offer — see the total interest comparison, monthly payment change and an honest verdict on whether it's worth it.
Consolidation loan offer
Consolidation breakdown
Total cost — principal vs interest
What to bear in mind
The "current path" assumes you only ever pay the minimum on each debt and those minimums stay constant. In reality, minimums on revolving debts (credit cards, overdrafts) shrink as the balance falls, which changes the payoff timeline. The consolidation path assumes a fixed-rate loan with equal monthly payments — if the rate is variable or if you miss payments, the actual cost will differ. Arrangement fees are included in total cost but shown separately. Always check whether early-repayment charges apply to existing debts before consolidating.
When does debt consolidation actually save money?
Debt consolidation can work in your favour — but only under specific conditions. The logic is simple: take several high-rate debts, replace them with a single lower-rate loan, and pay less interest overall. In practice, the outcome depends on three variables: the rate you're offered, the term you choose, and what you were actually paying before.
The rate has to be genuinely lower
The weighted average interest rate across your existing debts is the benchmark. If your consolidation loan rate is higher than that average — even slightly — consolidation costs more, not less. This catches people out when they consolidate a mix of 0%-balance-transfer cards (rate: 0%) and high-rate store cards: the average is lower than it looks. The calculator above shows your weighted average APR so you can compare directly.
Longer terms cost more, even at lower rates
A 7-year loan at 6% will cost more in total interest than a 3-year loan at 9% if the balance is the same. Extending the term reduces the monthly payment — which can feel like relief — but it means interest accrues for longer. If affordability is your primary driver, a longer term may still make sense, but go in knowing the tradeoff. The right answer depends on your cashflow, not just the APR.
What happens to the cards after you consolidate?
The most common pitfall: consolidating credit card debt into a personal loan, then gradually rebuilding the card balances again. You now have the loan repayment plus new card debt — worse than before. Consolidation only works if you close or drastically limit the consolidated accounts afterwards. Consider reducing credit limits on the cleared cards if you plan to keep them open for emergencies.
When consolidation makes the most sense
Consolidation tends to give the clearest benefit when you have several high-rate revolving debts (credit cards, store cards, overdrafts) and you can secure a fixed-rate personal loan at a meaningfully lower rate. The benefit is amplified when the consolidation also simplifies your finances: one payment, one lender, one end date. For people juggling five minimum payments with five different due dates, the psychological clarity of a single loan has real value beyond the numbers.
Free alternatives worth considering first
Before taking out a new loan, check whether you could move balances to a 0% purchase or balance transfer card — if eligible, the interest saving is complete rather than partial. Likewise, some lenders will negotiate a payment plan or temporary rate reduction directly. Free debt advice from StepChange or National Debtline is available online or by phone and worth using if you're unsure which route fits your situation.
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