Debt Consolidation Loans
Combining multiple debts for easier management. Find out what debt consolidation loans you’re eligible for without impacting your credit score.
Credit card debt building up? Extended your overdraft one too many times? Here at Asda Money, we know that life can get expensive. We can help you find debt consolidation loans between £1,000 - £25,000 to pay off your existing debts, turning them into one easier-to-manage payment and potentially reducing the interest you pay.
Search our panel of trusted UK lenders to find the right loan at the right rate for you. You can check if you’re eligible for a loan without impacting your credit score and get an online decision in minutes.
If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
Why choose Asda Personal Loans?
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A loan offer that’s right for you and your circumstances
What is a debt consolidation loan?
You can use a debt consolidation loan to pay off multiple existing debts, resulting in you only having one monthly repayment. It makes managing your debts simpler and helps you to keep track of your general monthly outgoings.
Secured vs. unsecured debt consolidation loans
Most debt consolidation loans are ‘unsecured’, meaning lenders approve applications based on your credit history. However, some are ‘secured’ against an asset, the most common being a house. If you choose a secured debt consolidation loan, you need to consider that the bank, building society or lender could seize your asset from you if you fail to make repayments.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
At Asda Money, we only provide access to unsecured debt consolidation loans.
How do our debt consolidation loans work?
At Asda Money, we provide access to personal loans that you can use for debt consolidation. They are always unsecured loans and are made available through a carefully selected panel of trusted lenders.. With just one initial eligibility check, you’ll see all the available debt consolidation loans that match your requirements. We perform a soft search on your credit history, which won’t affect your ability to gain future credit.
Whilst we don’t offer a specialist debt consolidation product, the loans you see from our lender panel will be the ones that most closely match your requirements. It’s then up to you to compare all the available loans to find the one that works for you.
What are the benefits of debt consolidation loans?
- Streamlined finances: With all your debts combined into one loan, you only have one monthly repayment and interest rate to keep track of.
- Improved budgeting: A debt consolidation loan combines existing debts into one, making monthly repayments lower and easier to manage. This should reduce the risk of making late repayments or going into unarranged overdrafts.
- Improved credit rating: If a debt consolidation loan helps you keep track of your repayments, this may improve your credit rating. Paying all your debts off on time will prove to future lenders that you’re a responsible borrower.
- Reduced monthly repayments: A debt consolidation loan reduce your outgoings each month. This is because your new loan could have a lower interest rate than your current combined rate of the previous debts.
- Reduce the time to pay it off: With lower repayments, you may be able to pay extra each month. You’ll then reduce your loan more quickly.
What should I be aware of before I consolidate my debt?
Don’t borrow more than you need: When applying for a debt consolidation loan, be careful not to request more than you need. You’ll still need to repay the loan in the future, so it’s advisable to ask for the minimum you need to cover your other loans.
- You could increase your overall borrowing: Although a debt consolidation loan may save you money each month, the term may be longer. Be aware that you may be extending the debt term and increasing the total amount you repay when consolidating existing borrowing.
- The risk of missing monthly payments: Make sure you can afford the monthly repayment on your debt consolidation loan. If you miss any payments, it can negatively impact your credit score.
- Be careful not to increase spending: Borrowing on a debt consolidation loan and paying off credit cards may make it feel like you have more money available. It’s tempting to start using your credit cards again and increasing your overall debt.
- It doesn’t address underlying financial problems: Borrowing more money to pay off debts doesn’t tackle how you got into debt into the first place. If you don’t look at your financial and spending habits, it’s easy for debt to build up.
Difference between debt consolidation and debt management
These terms sound similar but refer to different things. ‘Debt consolidation’ means taking out credit through a loan to pay off your existing debts. ‘Debt management’ is when you work with a debt management plan provider to negotiate affordable payments with the companies you owe money to.
What can I use a debt consolidation loan for?
You can use debt consolidation loans to pay off existing debts and consolidate them into one easier-to-manage loan. Many people use them to pay off credit cards, personal loans, store cards or overdrafts.
Your interest rate or APR may be much higher on credit cards, store cards or through an overdraft than it would be with a debt consolidation loan. It may make sense to pay these debts off and secure a lower interest rate with one loan.
Debt consolidation with bad credit
You may have a poor credit score if you have existing debts and have previously struggled with repayments. This could affect your chances of getting a debt consolidation loan now. Some specialist lenders may offer you a loan, but the interest rate will likely be high.
Asda Money does not offer secured debt consolidation loans, but other lenders may. With a secured loan, the lender uses your assets (such as your home) as ‘security’. Remember, with this type of loan, you risk losing your assets or home if you default on your payments.
Top Personal Loans FAQs:
- Why choose a Personal Loan through Asda?
Customers could access great rates from carefully selected trusted lenders, so you can sit back and let us do the leg work. What’s more, when you search for a personal loan, you’ll only have a soft search on your credit history, which means you can check your eligibility without harming your credit score.
Once your loan is approved, you could receive your funds the same day.
- How does it work?
Asda is in partnership with Aro which is a trading style of Freedom Finance Limited, who are a leading credit broker to offer our customers a different solution to borrowing money and finding a loan. We work alongside Aro so we can provide our customers with the right offer from a panel of handpicked trusted lenders.
With one eligibility check, you can search a panel of carefully selected lenders and provide you with a loan tailored to your needs. Once you have been approved you receive your funds which could be as quick as the same day.
So sit back, relax and let us do the hard work.
- Who are your lenders?
We have carefully selected a number of trusted lenders to be on a panel. You can search the panel to provide you with the very best offer you are eligible for. Find out more about each of our lenders here.
If you have any questions on our lenders, please call our Customer Service Team on 0333 555 0560 and a colleague will be happy to help.
- How much can I borrow?
Lenders offer loans from £1,000 up to £25,000 with repayment periods ranging from 1 to 7 years.
- Will applying affect my credit rating?
No. One of the best things about our service is you get access to a panel of trusted lenders with no credit footprint left on your credit file. When you apply with us, a soft search is completed which doesn’t harm your credit score.
However, if you do proceed with an offer from your search with us, the lender will complete a hard search once you have accepted your offer. This will show on your credit file.
About our trusted provider, Aro
Asda Personal Loans is in partnership with Aro which is a trading style of Freedom Finance Limited, who are a leading credit broker, to offer our customers a different solution to borrowing money and finding a loan. They were awarded Best Consumer Credit Broker in the 2020 Consumer Credit Awards – voted for by customers.
We work alongside Aro so we can provide our customers with their very best loan offer from a panel of handpicked trusted lenders.
With an eligibility check, a panel of carefully selected lenders can provide you with a loan tailored to your needs. It’s also a safe way to find a loan without negatively affecting your credit rating.
ASDA Money is a trading name of Asda Financial Services Ltd who are an Introducer Appointed Representative of Aro which is a trading style of Freedom Finance Limited (company number 06297533) of Atlantic House, Atlas Business Park, Simonsway, Manchester, M22 5PR. Aro acts as a credit broker and not as a lender and is authorised and regulated by the Financial Conduct Authority (FRN 662079).
Please note: If you take out a loan we will receive commission. This will be a fixed amount or a percentage of the amount you borrow depending on which lender you choose.
Terms and conditions apply. UK residents, aged 18 and over. If you take out a loan or credit card, Aro receive payment from the lender. Aro receive different amounts from different lenders and the payment received will be either a fixed amount or a percentage of the amount you borrow. We will not charge you a fee for our services. If you take out a loan, ASDA Money receive commission from Aro and it will be either a fixed amount or a percentage of the amount you borrow, depending on which lender you choose.