Taking out a debt consolidation personal loan may improve your credit rating if you meet the monthly repayments on time.
It seems like the amount of debt that British people are in is always on the news at the moment. It’s no great surprise really because, when you factor inflation in, the amount that people are paid is actually less than it was before the financial crisis ten years ago. With this constant squeeze on the average person’s purse strings, more and more of us are using websites like LoanTube to compare personal loans just to meet the monthly bills.
If that sounds like you, you may benefit from finding out more about no guarantor loans which you can use to consolidate your debt. But just why might they be an attractive option for you?
Maximise your options: Compare and apply for loans below with LoanTube
Apply Filters
Loan Amount
£4000 -
£20000
Norwich Trust
Loan Term
1 -
10 years
4.8/5
Representative APR
31.90%
Minimum Age
21 Years
Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.
4.8/5
Norwich Trust
Loan Amount
£4000 -
£20000
Loan Term
1 -
10 years
Representative APR
31.90%
Minimum Age
21 Years
Minimum Income
£2000 per month
Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.
Loan Amount
£5000 -
£100000
Evolution Money Loans
Loan Term
1 -
20 years
4.5/5
Representative APR
28.96%
Minimum Age
18 years
Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00
4.5/5
Evolution Money Loans
Loan Amount
£5000 -
£100000
Loan Term
1 -
20 years
Representative APR
28.96%
Minimum Age
18 years
Minimum Income
Not mentioned
Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00
Loan Amount
£1000 -
£10000
1Plus1 Guarantor Loans
Loan Term
1 -
5 years
4.4/5
Representative APR
39.90%
Minimum Age
18 years
Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.
4.4/5
1Plus1 Guarantor Loans
Loan Amount
£1000 -
£10000
Loan Term
1 -
5 years
Representative APR
39.90%
Minimum Age
18 years
Minimum Income
Not mentioned
Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.
The average person’s debt profile
Most of us generally owe money to more than one company. We might have different credit cards, and we might have borrowed money from different loan companies at different times.
If that’s you, we understand that, sometimes, it’s hard to figure out how much you actually owe, how much you’re paying back every month, and when all of your debts will eventually be settled.
People use a debt consolidation loan to pay off all of their credit cards, and personal loans all at once. This means that you now only owe money to one company who takes one fixed payment from your account every month – but that’s not the only benefit.
Take advantage of potentially lower loan rates
Some of your credit cards may charge you 29% a year in interest. If you have a logbook loan (a loan taken out on your car) and some of them charge up to 450% a year in interest.
What if you could pay off all of those expensive debts in one go and you paid a much lower interest rate than you pay on your current arrangements? The amount of money this would free up in your bank account every month could be very large – so large that the affect on your finances is transformative and positive.
And it gets better. The lower rate of interest on your debt consolidation personal loan might also mean that you end up paying less to clear your debts overall once you’ve reached the end of your loan term.
You may pay your debts back faster with a debt consolidation loan
Credit cards are very useful when we need to purchase goods or services in a hurry when we don’t have the ready cash available. They’re easy – perhaps too easy. For many people, using their credit card becomes second nature to them whenever they’re buying anything and it’s not long before all of those little and occasional purchases build up into a large balance.
What makes it worse is that the credit card companies only require us to pay back a small amount of what we owe them every month. While, on the surface, that may sound really helpful for our monthly budgeting, it means that it can take a very long period of time to clear your balance.
Let’s say that you had a £5,000 debt on one of your credit cards at an interest rate of 19.9% per annum. You only have to pay 2% of your balance off each month subject to a minimum repayment of £5. According to MoneySavingExpert, it would take you 57 years and 1 month to clear your balance and it would cost you £14,513 in interest.
However, if you took out a debt consolidation loan and you used £5,000 of the money you receive to pay off your debt at 19.9% interest over five years, you’d pay £2,665 in interest over that time. £14,413 or £2,665 – we’re pretty certain we know which one you’d choose for yourself.
What you need to know about debt consolidation personal loans
While you won’t be charged for paying off your credit cards in full, you should check with any loan companies you have an account with about whether they charge early repayment penalties for settling your loan before the term of the loan ends. When calculating whether a debt consolidation loan will save you money, add these charges to your calculations to work out whether you’ll actually be saving money.
It is possible to reduce the amount of money you repay on your debt consolidation loan account every month by extending the term of your loan. However, please bear in mind that the longer you take a loan out for, the more interest you’ll pay. Depending on your personal circumstances, it might be that you end up paying more interest back via a debt consolidation loan taken out over a longer period than you would with your current credit arrangements.
Taking out a debt consolidation loan may improve your credit rating if you meet the monthly repayments on time and in full. There are debt consolidation loan providers who are happy to lend to people whose credit history is not perfect – please read on to find out more.
You can choose secured or unsecured debt consolidation loans. Debt consolidation loans secured via your home (not available at LoanTube) generally offer lower interest rates however your home is at risk if you fall behind on payments.
Loans for debt consolidation
LoanTube is a credit broker – we don’t lend you money ourselves. What we do to help you is that we work with a large panel of Financial Conduct Authority-approved no guarantor debt consolidation lenders.
Before you take out a debt consolidation loan, make sure that the repayments you are quoted are manageable each month, even after you’ve paid off all the debts you’re taking the loan out for. LoanTube does not charge a fee for our service at any time to borrowers and potential borrowers and you are under no obligation to accept any deal we may find you.
To start your application, please click here.
