Debt Consolidation
Debt Consolidation
Summary
Debt consolidation is a way of combining multiple debts into one manageable payment. Instead of juggling different creditors, you bring your debts together to make repayment simpler and easier to track. This can be done through options such as an IVA, a Debt Management Plan, or a consolidation loan. While it doesn’t always reduce the total amount you owe, it can reduce stress and give you a clearer path to becoming debt free. At Advice Centre Group, we are a team who can review your debts in confidence and guide you to the right solution for your circumstances.
What is Debt Consolidation?
Debt consolidation is about bringing your debts together so you only have to manage them in one place. Instead of juggling multiple creditors, different payment dates, and rising charges, you can combine eligible debts into a single solution that feels easier to control.
This approach is often helpful if you owe money to several lenders and find it hard to keep on top of everything. By consolidating, you reduce the stress of dealing with lots of creditors at once and start focusing on one manageable payment.
At Advice Centre Group, we are a team who can talk you through your debt consolidation options in confidence and explain which solution best suits your situation.
How Can I Consolidate My Debts?
There are several ways to consolidate debts, but not every type of debt can be treated in the same way. That’s why it’s important to understand the options and choose what works for your circumstances. Some of the main consolidation routes include:
Individual Voluntary Arrangement (IVA)
An IVA allows you to combine certain unsecured debts into one affordable monthly payment, usually over five or six years. At the end, remaining eligible debts are written off.
Debt Management Plan (DMP)
With a DMP, you make a single monthly payment to a third-party provider who distributes it to your creditors. Interest may still apply, but it can ease the pressure of dealing with multiple creditors yourself.
Debt Relief Order (DRO)
A DRO gives you breathing space if you have low income, little spare money, and debts under a certain limit. It freezes your debts for 12 months, and if your situation doesn’t improve, they can then be written off.
Bankruptcy
If you have very little ability to repay what you owe, bankruptcy may be an option. It usually lasts one year, and eligible debts are written off. Some assets may be sold to contribute toward your debts.
We have supported 12,125+ individuals on their journey towards financial well-being.
Consolidation Loans
Another way to consolidate debt is with a consolidation loan. This involves borrowing money from a new lender to pay off several existing debts such as credit cards or loans. By doing so, you close down or reduce balances on old accounts and focus on repaying the new loan instead.
It’s important to understand:
A consolidation loan does not reduce the overall amount you owe, it just moves it to a single lender.
Regular repayments must be kept up, or you could fall into further financial difficulty.
The lender will usually carry out a “hard” credit check, which may temporarily lower your credit score. Making payments on time can help improve your score again over time.
Things to Keep in Mind
Debt consolidation can make life simpler, but it isn’t always the right choice. You’ll need to:
Work out your exact debts and creditors
Consider whether you can realistically afford the new repayment plan
Think about whether a formal debt solution, like an IVA or DRO, might give you longer-term relief
Speak To Our Debt Help Specialists Today:
By submitting the above contact form you agree to be contacted by The Advice Centre regarding your enquiry. Your data will not be passed onto third parties without your consent.
Credit Checks and Understanding Your Debts
Before you consolidate, it’s worth writing down exactly what you owe and who you owe it to. If you’re unsure, don’t worry. Our team at Advice Centre Group can help you check your situation by carrying out a soft credit search.
Unlike a hard search, a soft credit check does not leave a mark on your file only you can see it. This quick check gives us a clear picture of your outstanding debts and helps us find the debt solution you’re most likely to qualify for.
We work with the UK’s main credit reference agencies:
Take the Next Step
Debt consolidation is not a one-size-fits-all fix. For some people it’s the perfect way to simplify repayments, for others a different debt solution works better.
At Advice Centre Group, we are a team who will review your debts in confidence and guide you toward the most suitable option whether that’s an IVA, DRO, DMP, or another solution.
Frequently Asked Questions
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.
Learn more about managing your debt:
Dont Take Our Word For It, See What Our Clients Say About Us
Why Choose The Advice Centre
- We Understand
Being in debt is hard, talking about it is even harder, Our team are here to listen to you to help you find the best solution possible for you.
- We Listen To You
We have helped over 5000 clients with all kinds of different circumstances, We know how important it is to you to ensure that you get the right help for exactly what you need. We Understand you and your situation and every solution is tailored to you specifically
- We Work Together
We work with you to help you become debt free, our dedicated team are there to support and help you throughout the whole journey, let our team do the work for you, you have taken the hardest step already so let the Advice Centre do the rest
Call us – 0161 660 6270
Email us – Enquiries@advicecentregroup.co.uk
You can visit the Money Helper website to find out more about managing your money and to get free advice, they are an independent service set up to help people manage their money
Advice Centre Group Ltd registered in England and Wales (14322979). Registered office: Second Floor A, Cheadle Place, Cheadle, Cheshire, England, SK8 2JX.
Adam Southard is authorised as a Licensed Insolvency Practitioner in the United Kingdom by the Insolvency Practitioners Association, We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meet the criteria for one of our insolvency solutions, therefore, all advice regarding Individual Voluntary Arrangements (IVA) is given in reasonable contemplation of an insolvency appointment.
Adam Southard is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Office Holder No. 11930
Insolvency Practitioner Directory- Insolvency Practitioner Details (bis.gov.uk)
What you need to know about Individual Voluntary Arrangements
(Insolvency Service)
We provide solutions to individuals throughout the UK, We Will help recommend solutions available to your circumstances in which you can then make an informed decision about which solution you qualify for is best for you and your circumstances.