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Debt consolidation explained

Consolidating your debts is a way of merging lots of different debts into one loan to lower your monthly repayments.

It's only a good idea to consolidate your debts if:

  1. you end up paying less interest than you were paying before
  2. the overall amount you repay doesn’t increase
  3. and you can afford the repayments.

You have 2 options:

  • A secured loan is rarely the best option. They often charge a high interest rate, spread your payments over a long time and secure the loan against your home. You need to consider the downside of putting your home at risk.
  • A personal loan from a bank is unsecured so your home won’t be at risk. Calculate exactly what you owe to your lenders and borrow this amount.

Paul Lewis explains why it's important to manage debts

Paul Lewis, financial expert and presenter of BBC Radio 4's Moneybox, talks about why it’s important to plan to get rid of debt.

Further information


Our Information guides are short and easy to digest, giving a comprehensive overview of the relevant topic. Factsheets are longer with more detail, and are aimed at professionals.

You can download other guides in our series from publications

For more information: Call Age UK Advice: 0800 678 1174

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