Debt Consolidation Loans

All Debt Consolidation Loans FAQ's

What is a debt consolidation loan?

A Shawbrook debt consolidation loan is an unsecured personal loan that could be taken out to repay other debts and have one monthly payment. However, the terms may be different, and the overall cost could increase so read the terms carefully before entering into an agreement.

How does a debt consolidation loan work?

A debt consolidation loan works by taking out one single loan to repay other loans so that you only have one fixed monthly repayment. Depending on your situation, this could be a more cost-effective option, however, the terms may be different, and the overall cost could increase so read the terms carefully before entering into an agreement.

Can you get a debt consolidation loan with bad credit?

Although it is possible to get a loan if you have bad credit, it is unlikely that you will be accepted for a loan with Shawbrook Bank.

We take our responsibilities seriously. When you apply for a loan with us, we’ll look at your personal circumstances and will only lend to you if we are comfortable that you can afford the loan. When considering your suitability for a loan, we’ll use your credit history along with other information you provide to decide if we can lend to you. If you have a history of missing payments or a poor credit history, you’re unlikely to be offered a loan by Shawbrook Bank.

There are also other reasons why you may not be offered a loan, even if you have a good credit history. More information can be found in our guide about being turned down for a loan despite having good credit.

However, there are lenders who may still offer loans to those with bad credit. Beware of high fees and read your terms and conditions carefully. If you are offered a loan despite bad credit, make sure you’re able to comfortably afford the monthly repayments and check whether your new loan cost (the amount borrowed and the total interest you will repay) is not greater than your existing debt.

A debt consolidation loan can help you to merge some or all of your existing debts into one which can make managing your payments easier. If your credit score is worse than it was when you took out your previous credit, it may not be a suitable option for you. If you want to understand more about your credit score and why you might be classed as having ‘bad credit’, visit our guide on 7 reasons your credit score goes down.

If you are struggling with debt and would like support, we recommend speaking to StepChange. The debt charity helps over 650,000 people a year with debt-related problems and offers free, confidential, and expert advice and money guidance online or over the phone.

If you’re a Shawbrook customer and are having financial difficulties, visit our help page.

What loans and debts can be consolidated?

A range of different debts and loans can be consolidated. The use of a debt consolidation loan can differ from providers so contact your provider to understand more about their debt consolidation loans.

Who can apply for a debt consolidation loan?

We have some basic criteria which you’ll have to satisfy before we can consider your application. You must:

  • Be aged 25 to 75
  • Have been a UK resident for at least three years
  • Have an annual income of at least £15,000
  • Have a personal bank account in the UK

Do you charge any fees to setup a debt consolidation loan?

At Shawbrook, we do not charge any fees for setting up a debt consolidation loan.

Do I have to be a home owner to apply for a debt consolidation loan?

No, at Shawbrook you do not have to be a home owner to apply for a debt consolidation loan, but we have some basic criteria which you’ll have to satisfy before we can consider your application. You must:

  • Be aged 25 to 75
  • Have been a UK resident for at least three years
  • Have an annual income of at least £15,000
  • Have a personal bank account in the UK

How long can I take a debt consolidation loan over?

At Shawbrook, loan terms available are from 1 to 7 years.

What happens after I have a decision?

After we provide a quote you will have the choice whether or not to accept the terms offered. You will have 30 days to decide and once you accept the terms you will be sent your e-signature pack to review and sign your loan documents.

How soon will I get my money?

If your loan application is successful, funds will be transferred into your account within 3 working days after we have received your signed loan documents.

Why have I been declined?

If you get declined for a debt consolidation loan, there could be a number of reasons why you have been declined as each decision is based on your personal circumstances and by reference to a credit reference agency. The most common reasons for a decline decision are:

When will I have to make my first repayment?

The terms of your Shawbrook personal loan are set out in your credit agreement. Refer to this document to find out when you are due to make your first repayment.

Is there an early repayment charge?

Yes, there is an early repayment charge. The early repayment charge will include 28 days' notice and an additional 30 days interest that we are entitled to charge.

Who can I speak to if I have a question about my debt consolidation loan?

For enquiries regarding debt consolidation loans for existing customers, please call 0345 650 6290.