Are debts starting to get on top of you? Is it a struggle to pay back what you owe on your store cards, credit cards, overdrafts or personal loans every month? Here at Ocean Finance, we know how hard it is to juggle all your outgoings – not only debt repayments, but those essential day-to-day costs, too. So, wouldn’t it be great if you could just merge all of those debts into one single payment?
The good news is – you can! Apply for a debt consolidation loan and we’ll help you find the way to bring together all your outstanding debts into one manageable amount that you’ll pay each month. Of course, it won’t mean your debts just vanish overnight. But, it’s a form of borrowing that can reduce what you pay back each month – and it can help you manage your finances better, too.
What can I use a debt consolidation loan for?
Debt consolidation loans are – as the name suggests – loans to pay off debt you have built up over a period of time. The idea is that you take out one single loan to pay off everything you owe to lenders. What you’re left with is one loan to pay back, one interest rate and one lender to pay it back to. It’s that simple. And, here at Ocean Finance, we like to make things simple.
Unsecured loans: 49.9% APR Representative (variable). Ocean Finance is a trading style of Intelligent Lending limited. We are a credit broker working with a panel of lenders to find you a personal loan.
Homeowner loans are secured against your property. We are a broker and we arrange secured loans from a panel of lenders. We receive commission upon completion. A fee of 10% of the net loan amount, set at a minimum of £995 and capped at a maximum of £3995 is payable upon completion and can be added to your loan.
What is the difference between secured loans and unsecured loans?
There are two types of debt consolidation loan: secured or unsecured. It’s worth thinking about how much you need to borrow (and for how long) when taking a loan to pay off debt, because this can vary depending on whether you ‘secure’ the loan or not.
With a secured debt consolidation loan, the amount of money you borrow will be ‘secured’ against the equity in your home. This does mean you have to be a homeowner to be accepted – and it’s why you might also hear them called homeowner loans. By taking out a loan against your home, you could borrow between £10,000 and £100,000 for anywhere up to 25 years. Don’t forget that your home could be at risk if you don’t stick to your repayments on a secured loan.
An unsecured debt consolidation loan, meanwhile, isn’t secured against anything. It’s an option for more people as a result, but means the lender hasn’t got that added reassurance you’ll pay back your debts on time – so they’ll check your credit history to see if you’re a reliable debt-payer. This means it could be more difficult to get accepted for the best debt consolidation loans if your credit record is a little worse for wear.
Are debt consolidation loans safe?
Debt consolidation loans are just as safe as any other form of borrowing – if you stick to your repayments each month, of course. If you’re confident you can stay on track until the loan is repaid, you shouldn’t run into any problems.
The level of risk to you as the borrower depends on if you take out a secured or unsecured loan. With a secured debt repayment loan, don’t lose sight of the fact that you can be putting your home at risk. Like any kind of borrowing, you could risk hurting your credit record if you don’t keep up with your repayments – so it’s really important to make sure the costs are easy-to-manage before you sign the dotted line.
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While debt consolidation loans are often a useful solution for homeowners exploring how best to consolidate debt, we’ll help anyone struggling with their debts to find a loan that works for them.
The average UK household had £7,854 of consumer debt in November 2018, according to the Money Charity. From credit cards to overdrafts, there are many people out there who could benefit from merging all their outstanding debts into one single payment.
A debt consolidation loan could be for you if:
- You want to reduce your monthly repayments
- You want to reduce how much interest you pay
- You want to simplify your debt management
One thing you may want to bear in mind is that, while your interest payments could reduce in the short term, you could still find yourself paying more back in total over a longer period. For some, this is perhaps a price you’re happy to pay to make your finances easier and cheaper to manage on a monthly basis.
Are there debt consolidation loans for poor credit?
Yes – it’s certainly possible that you’ll find loans to pay off debt with bad credit. We’re here to make sure that you can. Of course, not all lenders are willing to give you a loan if your credit history isn’t spotless – but that’s not the case for all lenders.
Our wide panel of trusted UK lenders gives you the best chance to find the best debt consolidation loans for poor credit. With each application, we look at your personal situation – not just your credit history – to help you get the finance you need to clear your debt.
For anyone with poor credit, your chances of getting a secured debt consolidation loan could be higher than you think. That’s because, if you’re a homeowner, you’ll be putting up your home as security – reducing the risk to the lender and making it more likely that you’ll be accepted.
Do I need a guarantor?
It depends on the lender. Some of our lenders will offer both guarantor and non-guarantor loans. If you don’t own your home and your credit history isn’t brilliant, having the option of a guarantor could help you get approved for an unsecured debt consolidation loan.
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Who are debt consolidation loans not for?
Even if keeping on top of your debt is becoming more and more of an issue, debt consolidation loans aren’t always going to be the solution. It is, at the end of the day, another form of debt you’re taking on – and this isn’t right for everyone. Taking out a debt consolidation loan might not be for you if:
- You can’t afford the new loan repayments
- The loan won’t clear all (or most) of your existing debts
- The total amount of interest outweighs your savings
- Your personal situation could soon change
- A different form of lending works out cheaper
If you owe money on a credit card, it could be worth looking at a balance transfer card with a low or 0% introductory offer. This means you could shift your debt onto the credit card and pay little or no interest on that debt for a set period.
A debt consolidation loan isn’t for anyone experiencing serious debt problems. It’s a good idea to talk to your lenders to see what they can do for you if that’s the case. Alternatively, speak to one of these organisations for independent advice:
It can be often stressful, exhausting and overwhelming if you’re juggling multiple debts every month. At Ocean Finance, we don’t think it has to be like that. With a debt consolidation loan, you could find things become much simpler when managing your money – and maybe free up some more money for you and your family in the process!
Advantages of a debt consolidation loan
- All your debts in one place; one payment, one lender, one interest rate
- A single interest rate could be cheaper than paying various interest rates
- Lower monthly payments when spreading the cost over a longer period
- Build your credit rating by making your repayments on time, every time
Disadvantages of a debt consolidation loan
One downside to debt consolidation loans is you could end up paying back more in total. You’ll be paying interest each month, and this can add up – especially if you stretch the loan over a longer period. You could save more on a month-by-month basis if your payment and/or interest rate is lower, but the overall amount you pay back could outweigh that.
Other potential disadvantages include:
- Other forms of borrowing could be better suited to your circumstances
- Some lenders might charge a fee if you want to repay your loan earlier
- Your home is at risk if you don’t stick to payments on a secured loan
Why is a loan better than a credit card for paying off debt?
If you want to consolidate your debts into one single payment, applying for a loan is much better than a credit card for several good reasons. A big plus point is that you can borrow a larger amount of money – particularly with a homeowner loan. The interest you pay on a debt consolidation loan could also work out cheaper than a credit card.
Then there’s the fact your repayments are fixed. With a credit card, it could be tempting to just pay off the minimum amount owed each month, which means it takes longer to clear your debt – if at all – and once a card payment has cleared, you can go out and spend it again. This re-borrowing isn’t possible with a loan, so you’re always moving towards being debt-free.
Need to borrow a smaller amount or just want to shift some credit card debt? It could be that a 0% balance transfer credit card, for example, is the answer. The chances are the best rates and limits, however, are usually saved for people with good credit.
Why could a debt consolidation loan reduce my interest?
It depends. If the interest rate on your debt consolidation loan is lower than those on existing debts you’re paying off, it can lower the amount of interest you pay each month. You could also make smaller payments each month, which could help you manage your budget better.
That said, this means it’s possible you’ll end up paying more interest payments in the long run, as your loan will likely be stretched over a longer period.
It’s worth making sure taking out a loan to pay off debt is the right fit for you before applying. Compare how much you’ll pay back overall with a loan with how much you’ll pay by sticking to the payments on each of your existing debts.
Will consolidation loans get me out of debt quicker?
This all depends on the length of your debt consolidation loan. Fancy a longer repayment period? You’ll probably pay less each month, but you’ll be making more payments in the long run. It’s a trade off you need to think about. If you can afford the same (or higher) monthly repayments, being debt-free may come true sooner rather than later – depending on your interest rates, of course.
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To get out of debt with a loan, you should aim to borrow enough to clear what you still owe on credit cards, store cards and any other loans. That’s what a debt consolidation loan is all about. Once approved, the loan will pay off all of your existing debts, combining them into one new loan – then you’ll repay that one lender, potentially at a reduced rate.
The idea is that, as a result, you’re no longer paying multiple lenders at different interest rates. Instead, you’re rolling that debt into one single payment to one lender with one single interest rate – which can work out cheaper. At Ocean Finance, our job is to set you on that path to becoming debt-free.
How much can I borrow with a debt consolidation loan?
No matter how much debt you want to consolidate, we’ll help get you the loan that covers the costs. With an unsecured debt consolidation loan, you can borrow between £100 and £10,000. Or, you could borrow between £10,000 and £100,000 with a secured debt consolidation loan.
Bear in mind that you can only apply for a secured loan if you’re a homeowner. And while you can borrow more than the total of what you owe, it’s likely to take longer to pay off your debt.
How will a debt consolidation loan affect my credit score?
Getting a quote from Ocean Finance won’t affect your credit score, which means you can see if you’re likely to be approved without it appearing on your credit file.
If you apply for lots of loans at the same time, you could risk damaging your credit score and could reduce your chances of getting the finance you need. That’s why we’ll tell you if you’re likely to get a ‘yes’ before you apply – so your credit score won’t take an unnecessary tumble.
Once we’ve matched you to the right lender and you’re happy with the quote, we’ll get in touch with you to make sure the loan is completely right for you. Making a full application will mean the lender will run a hard search on your credit history – this can knock your credit score on a short-term basis, but you can soon build your credit score by sticking to your payments. Late or missed payments can drag your credit score down, however.
How do I get a debt consolidation loan?
To apply for a debt consolidation loan, the first step is to use our simple eligibility checker – be it for an unsecured personal loan or a secured homeowner loan. Simply tell us:
- The amount you want to borrow
- The amount of time you want the loan to last for
- What you’re planning to use the loan for – in this case, debt consolidation
- A few bits of information about you (and your property, if necessary)
We’ll then search our panel of lenders and come back to you in just 60 seconds to tell you what loan offer we’ve found for you.
How do I deal with any issues paying back my loan?
If you have an issue paying back your debt consolidation loan, don’t ignore it and hope that it’ll go away. Talk to your lender because there could be something they can do for you – from giving you extra time to make a payment or agreeing to a short-term payment holiday.
Your lender is there to make sure you’re on the same page, even if life has taken an unexpected turn. If you think sticking to your payments is going to be a longer-term concern, your lender could still help find a way forward.
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To get the debt consolidation loan that works for you, it makes sense to talk to the experts. At Ocean Finance, we’ve helped 250,000+ customers find the finance they need. The hundreds of five star reviews we’ve received show just how happy our customers are, too!
What sets us apart is the fact that we don’t do a ‘typical’ loan. All our offers are based on individual needs, matching debt consolidation loans to fit your personal circumstances – even if you’ve struggled to find finance elsewhere thanks to a less-than-perfect credit history.
Here are some more brilliant reasons to choose Ocean Finance for your debt consolidation loan:
- More than 25 years’ experience
- You can take or leave the quote we get you
- Find out if you’ll be accepted before you apply
- Large panel of trusted UK-based lenders
- No matter what your credit score, we’ll try to find you a loan
- Real loan rates based on your personal details
We’re proud of the great service we provide – and you can be sure that’s what you’ll get, too.
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