Free Debt Consolidation Loans Government Programs Investigated

Q: 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.

Free Debt Consolidation Loans Government Programs

Are you looking for a way to manage your debt better? Perhaps you’ve heard about government debt consolidation loans. In this piece, we’re going to explore the truth behind these loans and the help available from the UK government.

Each month, we guide over 170,000 people, just like you, through different debt solutions. We understand that it can be worrying when you can’t pay your debts, but don’t worry; you’re not alone. We’re here to give you the information you need.

In this article, we’ll discuss:

What government debt consolidation loans are and how they work.
The cost of a bad debt consolidation loan.
Other debt solutions offered by the UK government.
How to choose the right debt consolidation loan for you.
The future trends of debt consolidation loans.

We get it. Dealing with money problems can be tough, but remember, there are many ways to manage debt, and we’re here to guide you through them. Let’s start and learn more about government debt consolidation loans.

What are Government Debt Consolidation Loans?

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

The UK government does not formally offer debt consolidation programs. This may surprise people in a troublesome financial situation who’ve heard that the government does.

Government Debt Solutions

The UK government does, however, provide various other helpful debt solutions to people who lack both money and information.

Government-assisted debt relief programs include IVAs, bankruptcy programs, sequestration (Scotland), minimal assets process (MAP), DROs, protected trust deeds (Scotland), and debt management plans (DMP).

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

Credit counselling agencies and information-based services usually charge money for the information they give to their clients, whether a person or a company.

How to choose a debt consolidation loan

If you decide to get a debt consolidation loan, making an interest rate comparison is important. Choosing a loan with a lower interest rate than what you currently pay will help you save money while you repay your debt.

From my experience, you should also consider lender reputation, loan term length, eligibility requirements, and repayment terms.

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Can I get free debt consolidation loans?

Debt Consolidation Loans Government Programs

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

Debt consolidation loans are not part of government schemes but can help debtors manage their finances.

Here’s a valuable piece of financial advice: whenever you look for companies that can help you consolidate your debts or give you debt advice, always go for companies authorised by and following the Financial Conduct Authority (FCA) guidelines.

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 during your journey. They can help check your eligibility for debt consolidation loans.

» TAKE ACTION NOW: Compare deals from the UK’s leading lenders

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

In such a scenario, they may want personal loans that don’t affect their credit report too much, are easily payable via monthly payments, and are 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.

TSP personal loan – this loan comes with a 2.8% APR and a loan term of 1-5 years.

Leap personal loan – this loan comes with a 3% APR and a loan term of 1-5 years.

AA personal loan – this loan comes with a 3.1% APR and a loan term of 1-7 years.

Post Office personal loan – this loan comes with a 3.1% APR and a loan term of 1-7 years.

Hastings Direct personal loan – this loan comes with a 3.8% APR and a loan term of 1-5 years.

Zopa personal loan – this loan comes with an 8.7% APR and a loan term of 1-5 years.

Monevo personal loan – this loan comes with a 10.6% APR and a loan term of 1-5 years.

Accepty personal loan – this loan comes with an 18.4% APR and a loan term of 1-5 years.

Future trends of debt consolidation loans

In the UK, interest rates have risen due to high inflation. Lenders have raised their interest rate, also known as the bank rate or the base rate, to reduce inflation. For borrowers with a loan or a mortgage, the inflation impact on loan rates means their payments may increase too.

With the potential for a lower interest rate, it is natural for people to turn to debt consolidation loans to organise their debts and save money.

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.