Debt Consolidation
If you are struggling with multiple debts and finding it hard to keep track of payments, it is completely understandable to feel anxious and overwhelmed. Many people searching for debt consolidation are dealing with credit cards, loans, overdrafts, or council tax arrears, often alongside letters, phone calls, or enforcement pressure.
This guide explains what debt consolidation is, how it works in the UK, and when it may or may not be suitable in 2026. UK Debt Support supports people across the UK by helping them explore debt options calmly and clearly, based on a full assessment of their circumstances.
Debt Consolidation
- Written by UK Debt Support Editorial Team
- Last Updated: 26 January 2026
Summary
Debt consolidation is a way of combining several debts into one monthly payment. This article explains how debt consolidation works, the risks to be aware of, and when it may be appropriate in the UK in 2026
What Is Debt Consolidation?
Debt consolidation is a way of simplifying your finances by combining several debts into one credit agreement. Instead of managing multiple repayments and due dates, you make a single monthly payment.
It can be a helpful option if your debts are manageable but spread across different lenders charging high interest. When used responsibly and with a clear plan to repay what you owe, it can make budgeting easier and less stressful.
However, debt consolidation does not reduce the amount you owe. It only changes how you repay it. While one payment can feel easier to manage, spreading the debt over a longer period may cost more in the long run.
Key points to understand:
You still owe the full balance
Interest can increase the total repaid
Missing payments can make the situation worse
UK Debt Support can explain your options and help you assess whether debt consolidation is suitable for you.
How Does Debt Consolidation Work in the UK?
Debt consolidation usually involves one new loan or credit agreement that clears multiple unsecured debts. You then make a single monthly payment to the new lender.
Research referenced by the House of Commons Library highlights that consolidation can sometimes increase overall debt if affordability is not carefully assessed.
Debt consolidation may involve:
A personal loan
A balance transfer credit card
Secured borrowing for homeowners
UK Debt Support can talk this through with you and explain the risks and alternatives.
Is Debt Consolidation a Good Idea If You Are Behind on Payments?
Debt consolidation can be risky if you are already behind on payments or facing enforcement action. Many lenders require a good credit history, which can be difficult if arrears have built up.
The National Audit Office has highlighted the importance of sustainable and affordable debt solutions. Consolidation that stretches payments over longer periods may increase the overall cost.
If you are under pressure from creditors or bailiffs, UK Debt Support can help reduce enforcement pressure by explaining safer alternatives.
Can Debt Consolidation Stop Bailiffs?
Debt consolidation does not automatically stop bailiffs or enforcement action. If a debt has already reached court or enforcement stage, taking out a new loan does not provide legal protection.
Enforcement processes are overseen by HM Courts and Tribunals Service, which means legal status matters. Formal debt solutions offer protection that consolidation does not.
UK Debt Support can explain your options clearly and help you understand where legal protection may be needed.
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Alternatives to Debt Consolidation
Debt consolidation is not the only way to deal with multiple debts. In many situations, alternative solutions may be more appropriate and less risky.
These may include:
Bankruptcy in some circumstances
The Ministry of Justice explains how formal debt solutions can reduce enforcement pressure. UK Debt Support can help you explore these options after a full assessment.
Conclusion
Debt consolidation can make repayments feel simpler, but it does not reduce debt and may increase costs over time. For people already behind on payments or facing enforcement action, it can carry real risks.
UK Debt Support helps people through a full assessment of debt options, including debt consolidation, debt management plans, and insolvency solutions such as DROs, IVAs, or bankruptcy where appropriate. Guidance is provided only after an initial fact find, and insolvency guidance is given in reasonable contemplation of an insolvency appointment. The focus is always on reducing stress and enforcement pressure.
Key Takeaways
Debt consolidation combines multiple debts into one payment
It does not reduce the amount you owe
It does not stop bailiffs or enforcement action
It may be difficult to access with poor credit
Debt consolidation is not suitable for everyone
UK Debt Support can help assess whether debt consolidation or another option is right for you
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Does debt consolidation reduce the amount I owe?
Not always. If you use a consolidation loan, your total debt doesn’t go down, it’s simply moved into one account with one lender. Formal solutions like an IVA or a Debt Relief Order may reduce the amount you pay back, but this depends on your circumstances and creditor approval.
If you are unsure which path is best, we are a team who can explain the difference and help you decide in confidence.
Is debt consolidation the same as an IVA?
No, they are different. Debt consolidation is the process of combining debts into one repayment. An IVA is a formal debt solution that may write off a portion of your debt after you make affordable monthly payments.
We can help you understand whether consolidation or an IVA is better suited to your situation.
Will debt consolidation affect my credit score?
Yes. Taking out a consolidation loan usually involves a hard credit check, which can temporarily lower your credit score. Missing payments will harm your score further. On the other hand, keeping up regular repayments can improve your score over time.
If you want to avoid further credit score damage, our team can guide you towards solutions that protect you better.
Can I consolidate all types of debt?
No. Only certain types of unsecured debts can usually be consolidated, such as credit cards, personal loans, overdrafts, or utility arrears. Secured debts like mortgages or hire purchase agreements cannot normally be included.
If you have a mix of debts and you’re not sure which ones qualify, we can check for you quickly and clearly.
What happens if I cannot keep up with debt consolidation payments?
If you fall behind, creditors can still take action and your credit score may suffer. That’s why it’s important to be sure consolidation is affordable before you start. In some cases, formal debt solutions like IVAs or DROs might provide stronger protection.
If you’re worried about affordability, we are a team who can assess your situation and explain all the options available.
Does debt consolidation reduce what I owe?
No. Debt consolidation combines debts but does not write them off. UK Debt Expert can explain options that may better suit your situation.
Will debt consolidation affect my credit rating?
Yes. Applying for new credit and repayment history can affect your credit file. UK Debt Expert can talk this through with you calmly.
Can I get debt consolidation with bad credit?
It can be difficult, and available options may be expensive or risky. UK Debt Expert can explain safer alternatives.
Is debt consolidation better than a debt management plan?
It depends on your circumstances. A debt management plan does not involve new borrowing. UK Debt Expert can help you compare options.
Can debt consolidation stop bailiffs?
No. It does not offer legal protection from enforcement action. UK Debt Expert can help reduce enforcement pressure by explaining protected solutions.
Is debt consolidation a form of insolvency?
No. Debt consolidation is not insolvency. UK Debt Expert can explain when formal insolvency options may be more appropriate.
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