Are you having trouble with debt management and don’t know what to do or how to find debt relief?

If so, debt consolidation may be a useful opportunity for you to explore. This guide will take you through the entire process, talk about free government consolidation programs, and how they can help you deal with your debt problems.

With that in mind, let’s get right into it.

What are Government Debt Consolidation Loans?

Contrary to popular belief, advertisements and brochures that talk about “debt consolidation government programs” are simply false and misleading.

The fact of the matter is that the UK government does not formally offer debt consolidation programs, which may come as a surprise to people in a troublesome financial situation who’ve heard that the government does.

The UK government does, however, provide a variety of other useful debt solutions to people who lack both money and information. 

Government debt help programs usually involve IVAs, bankruptcy programs, Sequestration (Scotland), Minimal assets process (MAP), DROs, Protected trust deeds (Scotland), and Debt payment programmes (DPP).

If you’re someone who doesn’t know where to go to get government help, you can find useful information from a variety of counselors and  debt help services.

These counselors and information- based services are available readily, though they usually charge money for the information they give to their clients, be it a person or a company.

However, the term “free government debt consolidation programs” is still relevant. I’m going to discuss if and how you can get free debt consolidation loans in the UK.

Can I Get Free Debt Consolidation Loans?

Free Debt Consolidation Government Programs

Yes, that is certainly possible. You can get free debt consolidation loans.

Here’s a valuable piece of debt advice: whenever you look for companies that can help you consolidate your debts or give you debt advice, always go for companies that are authorised and regulated by the financial conduct authority, the FCA.

Moreover, if you’re looking to find free debt consolidation in England and Wales, it’ll help if you employ a money advice service to help you in your journey.

Free debt consolidation is something a lot of people would be tempted by if they know they don’t have the income to afford both monthly payments and the charges that come with personal loans for consolidation.

In such a scenario, they may want to get free personal loans that don’t affect their credit report too much, are easily payable via monthly payments, and they can make sure that they’re affordable.

So the short answer is yes. You can get a free new loan for debt on your credit cards, overdrafts, or other loans that you owe. 

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

Frequently Asked Questions (FAQs)

How Can I Find a Government Relief Program?

You should search for government relief programs on the internet.

Look up government websites and figure out if you’re eligible for a loan, a grant, or an insolvency procedure.

Your creditors will be an important part of the process, particularly for insolvency solutions, so make sure your creditors are updated on what’s happening.

Can the government help me get out of debt?

Yes, the government can help you deal with your debts and your creditors.

The best way the government can help you is if you’re eligible for a grant, for a utilities grant, or for some form of payment program. Other than that, the government’s main programs for debt management are insolvency solutions like bankruptcy, IVAs, and DROs.

Is debt consolidation right for me?

It depends.

As general information, remember that consolidation is supposed to make management easier for you in many ways. If it doesn’t, and if your credit score is going down as a result, it’s not right for you.

If you’re someone who is having difficulty managing their debt, such as student loans or debt on a credit card, consolidation should come as debt relief to you. 

Will debt consolidation affect my credit score?

Yeah, your credit record will be affected by consolidation. 

Usually, it takes the credit rating down, temporarily. But you should not have to think too much about it. 

For one, a “hard search” is carried out on your credit record as you apply for a credit loan. Second, your credit rating will most likely go down if you have a consolidation loan that you can’t afford and you miss regular payments on it.

On the contrary, it can also help your credit file improve. If you’re honest to your creditors about your monthly payments, your credit rating may go up. 

So here’s an important piece of debt advice: always make your monthly payment on time, whether it’s a debt management plan, an IVA, or debt consolidation.

When should I get debt help from the government?

You should apply to a government debt help scheme, such as an individual voluntary arrangement when you know that you won’t get by without it.

If an information solution, such as a debt management plan, isn’t working for you, I suggest that it is time to step your game up and try to engage a legally binding debt solution.

Do check if you qualify for a variety of government assistance, such as grants, handouts, and other benefits. Alternatively, you should seek a formal debt solution, such as a debt relief order or bankruptcy.

Wrapping Up

This guide talked about debt management, debt solutions, formal debt help schemes offered by the government, such as bankruptcy or individual voluntary arrangement. 

Regardless of whether you get consolidation on secured or unsecured debts, getting it for free can do wonders.

If you need any more debt advice, feel free to reach out.

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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