What is a debt consolidation loan?
If you’ve taken out multiple loans, you might be struggling to balance them all at once. It only takes one bad month to fall behind with payments, and it can take a lot longer to climb out of financial trouble.
In this situation, a Moneywise consolidation loan might be the solution you’ve been searching for. A debt consolidation loan enables you to combine all of your debts into one manageable payment plan, reducing the administrative stress of dealing with multiple different payment schedules.
Opting for a debt consolidation loan could also save you money on interest payments and improve your credit rating. If this sounds like it would be helpful to your situation, simply apply for a Moneywise loan that matches the amount you owe to other lenders. We’ll do the rest.
How does a debt consolidation loan work?
Step 1: Identify the total value of your existing debts across other lenders
Step 2: We’ll loan the money to pay off your lenders, so your debt is passed to us.
Step 3: You pay off your existing debts in one manageable monthly payment.
Step 4: You pay off the remainder of your loan.
Is a debt consolidation loan right for you?
Whether or not a debt consolidation loan is right for you will depend on your personal and financial circumstances. Whilst a debt consolidation loan won’t reduce your overall debt, it can be helpful by simplifying your debt.
If you owe multiple lenders, debt consolidation can make your life easier by combining your debts into one payment schedule. Before taking out a debt consolidation loan, always check whether your existing lenders charge early repayment fees – by consolidating your debts, you could incur fees resulting in increased charges for you.
How to apply for a debt consolidation loan
- Click the button below to apply
- Fill in your details as accurately as possible
- Submit the form
- One of the Moneywise team will be in touch as soon as possible to confirm whether you have been successful
At Moneywise, your previous loan history with us will determine the amount that you’ll be able to borrow. Members who have previously taken out a loan with us and repaid it in line with our agreed repayment dates and amounts will be able to borrow larger figures.
To apply you must:
- Be aged over 18
- Agree to Moneywise Credit Union rules
More information on our permitted borrowing amounts and APR%s for starter loans, flexi loans and loyalty loans can be found here.
Debt Consolidation Loan Calculator
Frequently asked questions
Here at Moneywise, our team considers multiple factors before approving loan applications.
A. Is it affordable?
The first thing we consider is – is it affordable? We want to make sure that if we’re taking repayments for a loan, you’ll be able to keep up with this loan and your other commitments.
B. Is it realistic?
Next, we’ll consider if the loan repayment schemes are realistic. We do this by checking if you’re up to date with your rent or mortgage. We also look whether or not you’re making repayments for utilities and council tax. If these payments are up to date, we’ll see if you have enough disposable income to cover these – plus our loan repayment on top.
If your bank statements show low balances, for example, we will assess the situation further. This helps us understand if all your spending is necessary. If you’re spending lots of money on takeaways for example, we may suggest a change in spending habits to ensure you’re able to make repayments.
C. Is your credit check acceptable?
If we’re happy that the loan is affordable and realistic, we may also need to run a credit check on some of our loan products. We’ll check the credit report to see if there are any active CCJs. If so, are they recent and are you repaying them?
We’ll continue to look over your current and previous credit accounts. This will make sure that each statement is up to date and you’re making regular repayments.
Interest rates vary! Most loans are set at a 3% interest rate (42.60% APR). This is for new and existing members, and family loans will always be set at this rate. We offer payroll members loans with a 2% interest rate. We might also offer lower interest rates due to length of membership, the amount of savings you hold with us and if we’ve offered a secured loan.
If you’re worried about repaying your loan on time, contact our team as soon as possible.
It depends on your situation. If this is a short-term issue where one or two payments are going to be missed, we may be able to cover these from savings already held with us. If not, an agreement can be made with our credit control department to either temporarily reduce payments, or for the payments to be made at a later date.
In cases where this is a long-term issue, you’d be able to discuss your best options with our credit control department. The team will help you come to an agreement about how to pay going forward.
If your application is successful, our team will help you set up the details and repayments of your account. You’ll also be provided with information on how to access your savings, keep track of your loan balance and, if you request it, offers and advice on topping up.
If your application is unsuccessful, we’ll provide you with information on setting up a savings account. Our team will also offer guidance on any other financial assistance we are aware of that may be available at the time. Finally, we also provide details of other support services, such as the Citizens Advice Bureau, that may be able to help you.
There are multiple reasons why your application may have been declined:
- if you currently have an active individual voluntary arrangement (IVA), debt relief order (DRO) or are bankrupt
- if it is not affordable for you to make the repayments (see above)
- if you have recently missed repayments on an existing loan with us
- if there is a decline in your credit report
To find out more, contact a member of our team and we’ll explain your circumstances.
Yes. Whether you’re in full-time employment or in receipt of benefits, anyone is eligible to apply for a Moneywise loan if you meet our requirements, including living or working in the North East.