If you have multiple debts, you might want to consider a Santander debt consolidation loan.

Santander is the fourth largest bank in Europe with a strong presence in the UK and Spain. The roots of the bank go back as far as the mid-1800s, which have enabled it to become a successful financial institution. 

They offer a wide range of banking, saving and investment products. And they also offer Santander debt consolidation loans to help people tackle their debts. Learn more about these personal loans here.

What Is Debt Consolidation?

Debt consolidation is a process of consolidating multiple debts, usually loans and store cards, into a single debt. Not only does this streamline your debts, but it can help you access better repayment terms and make your debts more affordable (even if you have to pay back for longer!).

Debt consolidation is not always straightforward. We recommend learning more about debt consolidation before making any hasty decisions. 

What Is a Santander Debt Consolidation Loan?

A Santander debt consolidation loan is a personal loan that makes debt consolidation possible. You can apply for this loan at their bank, and if it is granted, you can use the money to pay your other debts, meaning you now have this one debt with Santander. 

You should know that the Santander debt consolidation loan isn’t really called by this name. As with most banks, they offer personal loans that can be used for an array of reasons. It just so happens that Santander promotes their personal loan for debt consolidation as well. 

Santander Debt Consolidation Loan Reviews

Currently on Trustpilot, Santander has some poor ratings. When we specifically searched for personal loan reviews, the feedback was not so impressive either. Most people took issue with being rejected for the loan, or the time it takes for Santander to process the loan (longer than they state it takes online). 

But it is not all bad news. Some people had positive experiences, like this reviewer:

“I have never had a current account with Santander, I took a personal loan out with them, they gave me an app to keep on track of my payments and easy ways to show how to track the payments etc, loan wise they were brilliant.”

[Trustpilot]

Who Can Apply for a Santander Debt Consolidation Loan?

The Santander debt consolidation loan is available for existing and new Santander customers. However, new customers will only be allowed to apply for a loan up to £20,000 whereas existing customers may be able to get more credit.

This shouldn’t be an issue because if you are using the loan for debt consolidation and need more than £15,000 you probably shouldn’t be using debt consolidation. 

Instead, an Individual Voluntary Arrangement (IVA) would likely be a better debt solution.

Will I Be Eligible for a Santander Personal Loan?

As with any loan application, you will be subject to a credit check which will decide if you can be granted the loan or not. As well as this check, there are other criteria you need to meet for a Santander debt consolidation loan, namely:

  • You must be at least 21 years old
  • You must live in the UK permanently
  • Your annual income must be at least £6,000
  • You must have a bank account that enables you to pay back via Direct Debit
  • You must not have been declared bankrupt, used an IVA or received a CCJ within the previous six years

Santander Debt Consolidation Interest Rates

The interest rates on Santander debt consolidation loans will differ depending on how much you need to consolidate your debts and personal circumstances. For borrowing between £7,500 to £15,000, you might be able to get rates as low as 3.0% APR (this is accurate at the time of writing).

There are reports online of many people being taken in by this low rate but then finding out they will have to pay much more:

“Applied for a personal loan as I already have an account with them. 3% is what drew me in but when I applied it turned to 24% APR.”

[Trustpilot]

Preferential Loan Rates at Santander

Some existing Santander customers are known as 123 World or Santander Select customers. These are people who own specific Santander products and do most of their financial transactions, receive income and pay bills via their Santander accounts. These customers may be able to get preferential rates. 

However, these preferential rates are only available when borrowing over £15,000. Thus, anyone using this personal loan for debt consolidation will probably not be in line to benefit. As mentioned earlier, an IVA will likely be a better option if you need this amount of money to pay your debts. 

How Long Can the Repayment Period Last?

The loan repayment period can be between one to five years. The length of time you want to make repayments will also affect the APR rate.

However, Santander does allow people who have their loans to make overpayments if desired, which could reduce the amount of time you need to repay. This would be beneficial if you consolidate your debts but then get a higher paying job or receive an inheritance. 

Is There a Santander Personal Loan Calculator?

Yes, Santander has a personal loan calculator on their website, which can be found here. But be aware that this calculator is not always accurate and the terms of your loan will depend on your personal circumstances.

How Can I Apply for the Santander Debt Consolidation Loan?

You can apply for the Santander debt consolidation loan online. If you submit your application in the morning, you usually receive a decision within minutes. If your application is submitted in the evening, you might not hear back until the following working day.

Sometimes applications are deferred, which means more documentation and information is needed to make a decision. This will delay your application but once you submit the requested information, you can usually expect an answer within two working days.

Does Money Nerd Recommend Santander Personal Loans?

A Santander debt consolidation loan can certainly work for some people, but it is always best to look around without applying everywhere. It is also crucial that you don’t focus too much on the 3% APR rate as this will only be achievable by few people. 

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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