Secured Loans · Debt Consolidation
Debt Consolidation
Loans UK 2026
Compare live debt consolidation loan rates from 12 UK specialist lenders — from 6.34% APRC. Roll credit cards, personal loans, and car finance into a single secured loan: one payment, one lender, typically a significantly lower interest rate than unsecured alternatives.
What is a debt consolidation loan?
A debt consolidation loan combines multiple debts — credit cards, personal loans, store cards, car finance, overdrafts — into a single new loan with one monthly payment and one interest rate.
A secured debt consolidation loan uses the equity in your home as security. Because the lender has that security, they can offer much lower interest rates than unsecured personal loans or credit cards — often 7–12% compared to 20–30% on credit cards.
This makes a secured consolidation loan particularly effective if you have significant high-interest credit card or personal loan debt and sufficient equity in your property.
Typical example
Estimated monthly saving
£335/mo
Illustrative example only. Your actual saving will depend on your circumstances and the rate you qualify for.
How it works
Use our free debt consolidation calculator — no credit check, no obligation.
Add your debts
Enter each debt — balance and current monthly payment. Credit cards, loans, car finance, overdrafts.
See your saving
We calculate what a single secured loan would cost and show your estimated monthly saving instantly.
Compare lenders
Your debt total loads into the rate table. Compare rates from our specialist UK lender panel side by side.
Apply in 60 seconds
Click Apply and an FCA-authorised adviser calls you to confirm your rate. No hard credit check at this stage.
Pros and cons
Benefits
Lower interest rate
Secured loans typically charge 6–12% vs 20–30% on credit cards — significantly reducing the interest you pay.
One monthly payment
Replace 4, 5 or more minimum payments with a single, predictable direct debit.
Fixed end date
Unlike revolving credit, a secured loan has a clear term — you know exactly when you will be debt-free.
Improves cash flow
Lower monthly outgoings free up income for savings, emergencies, or other priorities.
Risks to consider
Your home is at risk
Unsecured debts become secured against your property. Miss payments and the lender can repossess your home.
May cost more overall
A longer term means more total interest paid, even at a lower rate. Run the numbers before committing.
Fees apply
Arrangement fees (typically £495–£1,995) and valuation fees are common. These are disclosed upfront.
Doesn't fix the habit
Consolidating won't help if you run up the credit cards again. Consider closing accounts after consolidating.
Who qualifies?
To get a secured debt consolidation loan you must be a UK homeowner aged 18 or over with sufficient equity in your property. Most lenders require:
£5,000
Minimum loan
£1M by referral
Maximum loan
Up to 100%
Max combined LTV
Clean to adverse
Credit profile
Lenders consider your income, employment status, credit history, property value, and existing mortgage balance. Even with CCJs or defaults, specialist lenders on our panel — including Pepper Money and Masthaven — may still be able to help.
Debt consolidation loans explained
How much could you save by consolidating?
The savings from debt consolidation depend on the gap between your current interest rates and the secured loan rate you qualify for. Most UK credit cards charge between 20% and 30% APR, while personal loans range from 6% to 15% depending on credit score. Overdrafts can cost up to 40% EAR.
A secured debt consolidation loan typically charges between 6% and 12% APR — significantly less than most unsecured debt. On £26,000 of credit card debt at an average of 22% APR, switching to a secured loan at 8% over 10 years could reduce your monthly outgoings from around £650 to approximately £315 — a saving of over £335 per month.
However, it is critical to consider the total cost, not just the monthly payment. A longer repayment term means you may pay more interest overall, even at a lower rate. Always compare the total amount repayable across different term lengths before committing. The MoneyHelper debt consolidation guide provides useful independent guidance on this.
Types of debt you can consolidate
A secured debt consolidation loan can be used to pay off most forms of unsecured borrowing, including:
Credit cards
Including store cards and charge cards. Often the most expensive debt to carry.
Personal loans
Unsecured bank or online lender loans with fixed monthly payments.
Car finance
HP, PCP, or personal contract hire agreements with remaining balances.
Overdrafts
Arranged and unarranged overdrafts, which can carry rates up to 40% EAR.
Payday loans
High-cost short-term borrowing — consolidating can dramatically reduce costs.
Buy now, pay later
Outstanding BNPL balances that are accruing interest or approaching deadlines.
You cannot consolidate your existing first charge mortgage into a secured loan. However, you may be able to remortgage if that is your goal. A secured consolidation loan sits alongside your existing mortgage as a second charge.
Secured vs unsecured debt consolidation
Both secured and unsecured loans can be used for debt consolidation, but they serve different needs:
| Factor | Secured loan | Unsecured loan |
|---|---|---|
| Typical APR | 6% – 12% | 6% – 30%+ |
| Max borrowing | Up to £500,000 | Up to £25,000 |
| Bad credit? | Widely available | Difficult / expensive |
| Property needed? | Yes — homeowner | No |
| Risk | Home at risk if you default | No property risk |
| Approval speed | 2–4 weeks | 1–3 days |
A secured consolidation loan is typically the better choice if you are a homeowner with significant unsecured debt (over £10,000), especially if your credit score limits your unsecured borrowing options. For smaller amounts with clean credit, an unsecured personal loan may be simpler and quicker.
Important considerations before consolidating
Debt consolidation can be a powerful tool for regaining control of your finances, but it is not a magic solution. Before proceeding, consider the following:
- You are converting unsecured debt into debt secured against your home. If you cannot keep up repayments, your home may be repossessed.
- A longer term reduces monthly payments but increases total interest. Run the numbers over multiple terms before deciding.
- Consolidating doesn't fix spending habits. If you continue using credit cards after consolidating, you could end up in a worse position. Consider closing accounts after paying them off.
- Arrangement fees (typically £495–£1,995) and valuation fees apply with most lenders. These are disclosed upfront and included in the APRC.
- Seek independent advice if you are unsure. The Money Advice Service (now MoneyHelper) and Citizens Advice offer free, impartial guidance on debt management options.
Best UK lenders for debt consolidation in 2026
The right lender depends on your credit profile, LTV, and loan size. These are the specialist UK lenders most active on debt consolidation cases — current panel rates and criteria summarised below. See our June 2026 market snapshot for the full panel rate table.
Selina Finance
Lowest rate (6.34% APRC)
Clean credit, sub-65% LTV
Read profile →
Pepper Money
Best clean + minor adverse blend
Up to 85% LTV from 6.99% APR
Read profile →
United Trust Bank
Bank counterparty, larger loans
Clean credit prime up to £500k
Read profile →
Norton Finance
Human-led adverse credit
Minor-to-moderate adverse
Read profile →
Together
Broad criteria, non-standard property
Discharged bankruptcy considered
Read profile →
Evolution Money
Highest LTV (95%) for adverse
Significant adverse credit
Read profile →
Common questions
What is a debt consolidation loan?
A debt consolidation loan combines multiple debts — credit cards, personal loans, store cards, car finance — into a single new loan with one monthly payment. A secured version uses your property as security, which typically unlocks lower rates than unsecured alternatives.
What APR can I expect on a debt consolidation loan in 2026?
UK debt consolidation loan rates in June 2026 range from 6.34% APRC (Selina Finance, clean credit at sub-50% LTV) to around 12.90% variable for borrowers with adverse credit at higher LTVs. Median panel rates sit around 7.91% for clean credit and 8.85% for minor adverse credit. By comparison, unsecured debt consolidation loans typically range from 8% to 30%+ APR depending on credit profile. The Bank of England base rate was held at 3.75% at the April 2026 MPC meeting, with the next decision on 18 June 2026.
How much can I save by consolidating?
Savings depend on your current rates versus the secured loan rate you qualify for. Credit card debt at 20–30% APR consolidated into a secured loan at 7–10% can reduce monthly outgoings significantly. Use our calculator on the homepage to see your personal saving.
How do I qualify for a debt consolidation loan?
Most UK debt consolidation loan lenders require: (1) UK residential property ownership with sufficient equity (typically combined LTV under 80-85%); (2) verifiable income that covers the new monthly payment alongside other commitments; (3) a credit profile that fits the lender's tier — clean credit unlocks the lowest rates, but specialist lenders accept CCJs, defaults, and discharged bankruptcy. Under FCA regulations, all lenders must complete an affordability assessment regardless of credit history.
How much can I borrow for debt consolidation?
UK secured debt consolidation loans typically range from £5,000 to £500,000. The exact amount depends on your property equity, combined LTV cap (75-85% across the panel), affordability assessment, and the lender's product range. On a £300,000 property with a £150,000 mortgage, you could potentially borrow up to £105,000 at 85% combined LTV — though most lenders will lend the lower of that figure or what affordability supports.
Are debt consolidation loans regulated by the FCA?
Yes — UK debt consolidation loans secured against residential property are regulated by the Financial Conduct Authority. Both the broker and the lender must hold FCA authorisation. Charles Frank Finance Limited operates under FCA FRN 624668. The FCA's March 2026 review of the second charge sector emphasised affordability and suitability scrutiny on consolidation cases — underwriters are now asking probing questions about whether borrowing genuinely resolves the underlying issue.
Should I consolidate debt with a secured loan or remortgage?
It depends on your current first charge mortgage. If you have a cheap legacy fix (sub-3% from 2021 or earlier) — which applies to roughly 1.8 million UK homeowners whose fixes expire in 2026 — a secured loan typically beats remortgaging because it preserves the existing first charge. Average new 5-year fixes were around 5.7% in May 2026 vs sub-2.5% on the legacy fixes; a separate second charge at 6-8% on the new borrowing keeps your existing rate intact.
Is consolidating debt with a secured loan a good idea?
It can be. You typically pay less interest and simplify multiple payments into one. But you are converting unsecured debt into debt secured against your home — if you miss payments, your home may be at risk. Consider whether you need free debt advice from StepChange, Citizens Advice, or National Debtline before committing, particularly if the underlying issue hasn't been addressed.
Can I consolidate debt with bad credit?
Yes. Lenders including Pepper Money, Together, Norton Finance, and Evolution Money specialise in applicants with CCJs, defaults, missed payments, IVAs, or discharged bankruptcy. Rates will be higher than clean credit — typically 8-13% — but secured loans are often available where unsecured options have been declined entirely.
What debts can I consolidate?
Credit cards, personal loans, store cards, overdrafts, car finance, and payday loans. You cannot consolidate an existing mortgage into a second charge loan — though remortgaging may be an option.
How much equity do I need?
Most lenders cap combined LTV at 80–85%. On a £300,000 property with a £150,000 mortgage, you may be able to borrow up to £105,000 (85% LTV) for debt consolidation. Some lenders extend to 90-95% combined LTV at higher rates for clean credit or adverse credit cases respectively.
See how much you could save
Add your debts to our free calculator and compare secured consolidation rates from UK lenders in minutes. No credit check. No obligation.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS.