What is a Debt Consolidation Loan?

Consolidation is a process in which a big personal loan is taken out that is equal in amount to what you owe. 

To get an amount of money equal to what you owe, but at a cheaper cost than the current loan, you do this. This does offer several benefits.

If individuals require assistance with their monthly repayment, they may go to these programmes.

When it comes to debt management, there are few programs that can be as effective as a debt consolidation loan. When you combine your debt into a single loan with regular repayments, it’s likely that it’ll become much easier for you to eventually go debt free.

What Are Free Debt Consolidation Organizations?

Free consolidation companies are those that offer consolidation services with no setting up fee. They don’t charge a cost for setting up your consolidation loan. However, they may ask for other forms of payment for their services, such as an increased interest rate.

If you’re struggling with debt and consolidation companies seem too expensive to you, my advice is that you find a free consolidation company that is registered in England and is authorised and regulated by the financial conduct authority (FCA).

The best thing about finding a free consolidation company that is registered in England and is authorised and regulated by the financial conduct authority (FCA) is the amount of free resources they can give you.

These free organizations offer workbooks, management sheets, financial guides, budgeting worksheets, and loan calculators.

These free resources go a long way in helping people who don’t have enough money to spare for information on repayments, expensive financial guides, and other useful information.

Some free consolidation organizations even offer counseling courses for people who need lots of information on matters such as repayments, their repayment offers, knowledge about loans, and guidance about insolvency solutions such as bankruptcy and IVAs.

These organizations come with a variety of different charges, conditions, rates, and other variations.

Some organizations charge more for what they provide you than others. You can check a particular consolidation organizations’ website to get a better idea of how they can help you.

Why Should I Go For a Free Debt Consolidation Company?

Free Debt Consolidation Companies

A free consolidation organization offers several benefits over a regular organization.


For one, you’ll have to spend a lot on the setting-up fee for the money they give you. When it’s a free company, you won’t have to worry about giant initial costs that can wear you down and hurt your financial situation.

Also, free organizations offer a variety of perks and benefits that you won’t get otherwise. You’ll get access to exclusive guides, content, files, courses, programs, and other perks for free. You won’t have to pay for the service, as you would with a regular organization.

For one, lots of people can’t afford to pay extravagant charges for consolidation. They won’t have to drill a huge hole in their pockets while looking to manage their financial matters.

Finding one or two organizations, looking up a website or two can really help them in a financial fix.

Inexpensive Consolidation Programs in the UK

I’ve found the UK’s cheapest debt consolidation programs, with the least possible APR. Let me share that with you.

  1. TSP – this comes with a 2.8% APR and a term of 1-5 years.
  1. Leap – this comes with a 3% APR and a term of 1-5 years.
  1. AA personal loan – this comes with a 3.1% APR and a term of 1-7 years.
  1. Post Office personal – this comes with a 3.1% APR and a term of 1-7 years.
  1. Hastings Direct personal  – this comes with a 3.8% APR and a term of 1-5 years.
  1. Zopa personal – this comes with a 8.7% APR and a term of 1-5 years.
  1. Monevo personal  – this comes with a 10.6% APR and a term of 1-5 years.
  1. Accepty personal  – this comes with a 18.4% APR and a term of 1-5 years.

Get in contact with one of these organizations. They’ll help you manage your finances.

FAQs

Can I get free debt consolidation with a poor credit rating?

It’s going to be rather difficult.

However, it’s not impossible. There are organizations that are tailored towards helping people with huge debts who have a poor credit file.

These organizations do come with extensive criteria lists and conditions though, for one. It’s not easy to get debt help from them unless you prove that you’re reliable and you’re likely to remain reliable while getting your debt help.

Can I get unsecured debt consolidation loans?

It’s definitely possible for you to get an unsecured amount. Do be aware that getting these loans can be significantly harder than getting a secured one,  when it comes to debt management.

For one, an unsecured loan is one you’ll usually get at a higher interest rate than a secured loan because you’re not putting up any asset of yours as collateral towards the loan.

Unsecured loans are harder to get than secured ones if your credit file is shabby and needs improvement.

Are free consolidation organizations completely free?

Sometimes.

You’ll find several companies that are willing to set you up without asking for any charges or costs.

However, they do ask for a representative APR, which can vary from minimal to excessive, so be careful about that.

When should I not go for free consolidation?

There are two cases in which I would warn you not to consolidate your debts.  The first is when consolidation is just not going to do the trick.

Consider a financial restructuring scheme or insolvency if you can’t pay back the loans, even with debt consolidation.

The second is when you have a mortgage or a loan that you believe you can pay back in less than a year’s time. If that is indeed the case, you’re better off avoiding the burdens, charges, and fees that come with consolidation.

Where can I get free advice?

If you’re looking for free help on your finances, your options, and repayments, you should look for free help agencies and visit their website. 

You’ll find a lot of free options on the internet and in real life, where they’ll be willing to sit down with you and talk about your money and your repayments.

Wrapping it Up

Consolidation is not always an easy process to go through.

This guide talked about free consolidation organizations, when you should go to them, and when they’re right for you.

I hope this guide helped you make a better, more informed choice. Check out the blog on my website for more help.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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