Debt consolidation (non mortgage)

If you have a number of loans, maybe including credit card debt, you may find that it is cheaper to pay them off completely by taking out one loan with a lower interest rate, such as a good value personal loan or consolidating other debts into your mortgage. This is called debt consolidation.

However, you may find it difficult to get a personal loan or mortgage top-up in order to pay off other debts as lenders may not want to lend you money for this purpose. If you are having problems paying back your debts, read our debt action plan.

If you can switch to a lower rate loan, you will pay less interest as long as you keep the term of the loan short. You will not save as much money if your new loan stretches over a longer term, and a debt-consolidation loan could actually cost you more than your original loans if the term is too long.