A consolidation loan will not be right in every situation, and there may be better alternatives, particularly if you are already facing significant difficulties with problem debt. If you are unsure, you should always seek independent advice before taking on further borrowing.

According to the Money Advice Service, consolidating debts only makes sense if:

  • money saved on interest isn’t wiped out by fees and charges
  • you can afford to keep up payments until the loan is repaid
  • you use it as an opportunity to cut your spending and get back on track
  • you end up paying less interest than you were paying before and the total amount payable is less (it could be more if you repay over a longer period).

You can read the full guidance here