Getting a loan to repay Debt with a bad credit score?

[romey1616]

Hi everyone, we Have fallen behind with a few payments over the past year. It probably all adds up to around £3.5K debt & it’s continuously increasing due to interest and late payment fees.
I’ve been thinking about getting a £4000 debt repayment loan, pay everything completely off and pay my loan off monthly.
I feel this would be suitable as, my debt would be in one place, I’d have a set term (years) to pay it over. I’d be on a set interest rate so I’d know how much I’m paying.
however due to bad credit score, I don’t know who is a credible lender? Can anyone give any recommendations?

Maybe look into credit unions near you? Best to phone a debt advice service first though

You're getting into debt to repay debt, which is not really a good idea. What if you fall behind with the payments on this one?

Would it not be better to talk to someone like Stepchange to manage your debts and get interest frozen? Taking on debt to pay off another rarely solves the problem.

It doesn't address why someone's in debt and not managing to pay it off, either. The danger is that even more debt gets run up.

OP, please do contact a free debt advice service. Citizens Advice will be able to point you in the right direction - I strongly recommend you do this as your first port of call. Either Citizens Advice themselves or another financial body recommended by them that offers free help, support and guidance, will discuss with you and go through the best options for your specific circumstances. Good luck x

If you have a poor credit history any loan you get will be at least as expensive as your current debt and is rarely the solution.

You need to thoroughly review your budget so you can see on paper whether you can actually afford to pay your debt off as it could be just a matter of reducing some costs and prioritising debt repayments over spending on non essentials for a while.

Or it could be that you need a more formal solution. Have a look at Moneysavingexpert.com and do everything that is relevant.

https://www.moneysavingexpert.com/loans/debt-help-plan/

In the first instance, I would suggest you try to go into a branch of the bank you hold your current account with (especially if you have had that account for some years) and ask to see someone about a debt consolidation loan, and talk to someone in person. As your bank can see your entire banking history, they're (probably) more likely to issue it to you than a.n.other.

I would just add that you should ask them to check whether you might be eligible by doing a soft credit check, they can check whether they can lend you the money without hitting the 'apply' button, which will then sit on your credit rating. If their soft credit check comes back with a 'yes', go for it.

I had to do it with NatWest a couple of times over the years and it was really simple. A bit intimidating when they faff around looking all serious with paperwork and you feel like a gigantic idiot for being bad with money, but banks would honestly prefer people get a consolidation loan than run away with a bunch of debt that's out of control.

Idk what my credit rating was back then, though. They weren't really a thing that was publicly available/talked about.