Debt consolidation loans
A debt consolidation loan could help you combine your borrowing, making it easier to manage and keep track of.
Log in to get a quoteImportant information: How much we lend and the rate available are dependent on our assessment of your circumstances. You must be age 18 or over and a UK resident. To apply using online banking, you must have had a Lloyds, Halifax or Bank of Scotland current account for at least 1 month.
Debt consolidation loan calculator
Work out how much your debt consolidation loan repayments could be, based on an illustrative APR. The interest rate we offer could vary, subject to our assessment of your circumstances.
Representative example
You could borrow £10000 over 48 months with 48 monthly repayments of £240.21. Total amount repayable will be £11530.08. Representative 7.4% APR, annual interest rate (fixed) 7.16%.
This representative APRRepresentative APRThe representative APR is the rate that at least 51% of people are expected to receive when taking out a loan within the stated amount and term range. applies to loans of £7,500 to £25,000 over 1 to 5 years. Other terms and loan amounts may apply at different rates. The maximum APR is 29.9% APR.
Who can apply for a debt consolidation loan?
To apply for a debt consolidation loan using online banking, you need to:
- be aged 18 years or older
- be a UK resident (except for the Channel Islands and the Isle of Man)
- have had a Lloyds, Halifax or Bank of Scotland current account for at least 1 month
- be in paid employment or have a regular income, and not be a full-time student
- have a good credit score, with no history of bad credit, such as County Court Judgements (CCJs) or bankruptcy.
Get a quote for a debt consolidation loan
Tell us how much you’ll need to consolidate your debts, and over how long. Getting a quote won’t affect your credit score.
If you’re happy with your quote, you can complete your debt consolidation loan application and get a decision online. If approved, you could receive the money the same day.
Let’s look at the details
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When you apply for a debt consolidation loan, the lender will complete a hard credit check. This could potentially affect your credit score whether you’re approved or not.
If approved, a new loan increases your total debt and decreases the average age of your accounts. This could lead to a temporary dip in your credit score, but it should start to recover if you:
- manage your loan repayments carefully and on time
- focus on reducing your debts and limiting new borrowing.
If you’re declined, it could cause a short-term dip in your credit score, so it’s wise to wait and work to improve your score before you try again. Making multiple credit applications in a short time can compound any negative effect on your score.
If you’re a Lloyds customer, you can get a personal loan quote online which won’t affect your credit score. If you’re able to apply, we’ll tell you how likely you are to be approved before you complete a full loan application involving a hard credit check.
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Debt consolidation loans can be either secured or unsecured.
Secured debt consolidation loans – this is where your borrowing is secured against an asset, like your home or a car. If you can’t repay the loan, the lender can recover money from that asset.
Unsecured loans – as the name suggests, your borrowing isn’t secured against an asset. At Lloyds, we only offer unsecured personal loans.
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If you’re worried about debt, the following help and advice pages could help.
Money worries
Learn more about credit scores
Get help with budgeting
Learn about persistent debt -
Only you can decide which borrowing option might suit your needs best. A debt consolidation loan may not always offer the lowest interest rate, but there are advantages you might like to consider.
- A fixed interest rate and term, making it easy to understand your borrowing costs and track your progress towards paying off the loan.
- Simplifying your debts into 1 monthly payment – making it easier to plan and budget for your repayments.
- The ability to borrow more for other needs, helping you to manage unexpected costs. Just be aware, the amount you can borrow is subject to status.
You might like to explore other borrowing options to help you consolidate debt.
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When it comes to buying a home, debt consolidation could have both positive and negative effects. It can lower your credit score:
- when you apply for new credit, whether you’re accepted or not
- if you’re approved for new credit – increasing your total debt and lowering the average age of your accounts.
But your score should start to recover if you:
- continue to make repayments on time
- focus on repaying your debts and limit further borrowing
- avoid making further credit applications in the short term.
Consolidating your existing borrowing could be a positive step towards applying for a mortgage in future, potentially helping you to:
- reduce your credit utilisation over time
- reduce your debt-to-income ratio, improving mortgage affordability
- simplify your outgoings, limiting the risk accidentally missing payments.
Timing is important. Between consolidating your debts and applying for a mortgage, keep a close eye on and work to improve your credit score.
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