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'Loan to Consolidate Debt with Bad Credit'

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Secured 'Loans for Bad Credit Debt Consolidation'

Loans secured against your property are also often commonly referred to as 'second mortgages', 'home equity loans' or just simply 'secured loans' in the UK.

The nature of a secured 'loan for bad credit debt consolidation' is that as it is legally secured to assets that you may own ie; usually your residential property or other substantial assets you may own.

Maybe you have had previous or current bad credit due to family circumstances, the pandemic 2020's, a previous redundancy or poor health? As such, you now have a bad credit history of some unpaid regular bills & missed payments?

So, what are secured loans for bad credit for debt consolidation ? As mentioned, they are loans secured against uk property legally you own or a '2nd charge secured loan' because the lenders will have second charge priority behind the main (or first charge) primary mortgage.

Then like your main mortgage provider, your secured loan lender can also effectively legally recover your property, in order to recover their loans plus any legal costs incurred.

By using your own home as security or collateral, you are now reducing the risks that any UK secured loan provider may not be able to recover what they are owed, in the event that you should defaults on your repayments.

As a result of this, certain specialist lenders are still willing to provide viable secured 'loans to consolidate debt for bad credit' to some people, even if you have an average, bad, adverse or very poor credit history profile.

Secured 'bad credit loans to consolidate debt' are therefore useful to some people in situations where they are uncertain what to do next.

This now means you would have 2 mortgages on your property. As such, we will examine in this review how does a secured loan work for homeowners? The pros & cons associated with taking one out. Then, some other alternative options to maybe consider than any new 'bad credit loans debt consolidation' deal. Please contact us >

Considering a Secured Loan for Bad Credit to Consolidate Debt?

Maybe you need to substantially reduce your monthly outgoings by consolidating all your debts into just one monthly payment?

For example, in 2025 you have 6 credit cards & various loans costing you over £1,000pm+ to repay, and now your income & outgoings have been affected by the cost of living crisis?

However, your current bad credit history is also hindering your access to funds for the best loans to consolidate debt.

With a secured 'loan for debt consolidation bad credit', you may be able to borrow the money you now need to reorganize your goals and objectives.

A secured loan is often used as a way to raise further money against the equity within your own domestic property to help consolidate your debts.

This maybe perhaps when it is not possible (or preferable) to increase the main first mortgage via a remortgage or further advance?

If looking to consolidate debt loans with bad credit broker deal, you may be able to borrow larger sum of money over a longer repayment term, than perhaps other types of unsecured finance.

Note: if you are considering consolidating existing debts & credit cards, be aware of the financial impact if you also extend the term of your 'loan for consolidation of debt'. Whilst your payments may now be alot lower (which can therefore also help to manage your bills & outgoings) this will also increase the total amounts you repay.

Many secured loan bad credit lenders uk terms in the 2020's may also offer risk rated interest rates, than say un-secured loans & for larger amounts.

The reason behind this is because as mentioned above those secured loans for consolidation with bad credit providers potentially have a lower financial risk exposure ie; they always have recourse to seize back your property - should you be unable to meet all the regular loan repayments.

Note: Making regular repayments upon time to any secured loans for bad credit to consolidate debt via your lender is crucial to maintaining your credit status in the longer term. Please contact us >

What does Bad Credit status mean?

Although we may say we have a bad credit score, it is usually not a category that uk secured loan providers use. So typically people's credit is rated as Excellent, Good, Fair, Poor and Very Poor.

So, you can say you have a bad credit status rating if you have a 'Poor' credit score eg. missed various payments over last few years. Or 'Very Poor' eg; missed 6 payments consecutively & in arrears currently.

It may vary a little between agencies you may look at as to which credit agency they use, but all the loan providers are able to access any or all of your credit history figures anyway.

The main thing to focus on is that if you have or had a bad credit history rating - then secured loan providers & brokers are subjective and will be able to clearly see that and adjust their offerings to you accordingly.

You will find yourself in the higher risk lending categories if you have had a history of missed payments or you have a large amount of debt to consolidate. This is the most obvious cause, but there are others.

If you are in a joint partnership with someone who has a poor or very poor credit rating, this can then bring your own credit score down.

You could also have a bad credit status by having little or no credit history at all ie; the lenders have no evidence of you borrowing money or paying it back, so may assume the worst in this case scenario.

Your credit history score is a number that is used by finance providers to assess how likely you are to pay back money loaned to you. These scores may fall into a number of categories.

It also shows as a potential borrower whether you are likely to make payments regularly & without delay. If you have missed any payments (for whatever reason) in the past you are more likely to get a bad credit rating. Please contact us >

Consolidate Debt Loan Bad Credit Status

There are several main credit agencies that assess scores eg; Equifax & Experian. Each credit agency has its own particular way of working out a credit score for you. You can use these various websites anytime to find out your credit status, often via a soft search.

These credit scores place you into a band that lenders can look at when they are considering whether to offer you any 'bad credit debt consolidation loans uk' finance.

However, all of these credit ratings mean broadly the same thing ie; they have a credit scale that goes from say poor to very poor, with your individual credit score falling into one of these bands.

You are given a credit points score based on your finance history, whether it is a loan, mortgage, credit card or other finance style.

Your current financial commitments are taken into account, for example monthly loan payments, mobile or broadband contracts payments. They also look at how many credit cards you have and even how you manage your bank account.

Other factors are considered as well, including how long you have lived at your uk current address and whether or not you are employed or self employed.

Also, whether you are registered to vote or if you have any county court judgments against you, for failing to pay fines or debts.

Our UK finance brokers have helped people in the past who thought it maybe difficult securing a loan for bad credit to consolidate debt - even those who have been previously bankrupt. Please contact us >

Can you get Consolidation Bad Credit Loans?

We are often asked as brokers, can you get secured bad credit loans for consolidation?

Usually, your ability to use your equity in your property will depend (apart from your actual home values), on you being able to show a track record at paying off your mortgage & regular bills.

However, if you do have bad credit, then we may still be able to help you get a deal.

For secured debt consolidation bad credit loans, lenders must also still comply with FCA responsible lending & financing rules (that also cover your main first charge home mortgage).

This means therefore for secured loan providers & brokers, they should still carry out the same affordability checks or various loan to income limits, which are all regularly reviewed by the FCA regulators.

A few years ago this meant any debt consolidation loans with bad credit must also stress test your ability to meet both current and future payments. However despite much debate, these rules for were set to change.

• Using your Home for a secured loan also means you will now have several 1st & 2nd charge loans on your property at anytime
• Any means for most Lenders they will take all your existing monthly repayments into account, for their affordability calculations
• Your ability to get 'debt consolidation loans uk bad credit' depends on (amongst other things) your likelihood to be able to meet both 1st & 2nd charge payments

Can I get a 'debt consolidation loan uk bad credit'? Unsure & need broker help then, Please contact us about 'debt consolidation loans uk for bad credit' enquiry >

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How to get a 'Consolidation Loan Bad Credit UK' deal?

Many people in the UK due to the pandemic & cost of living crisis 2020's have had their financial lives turned upside down.

One minute things may have been okay financially ...& the next minute your finance credit history may have taken a turn for the worst?

You maybe one of those people & are now concerned 'how to consolidate debts with bad credit'?

Having bad credit when it comes to borrowing money is never perfect, as many mainstream high street finance providers like those careful borrowers. Those who make their payments on time.

When a mortgage finance lender says someone has a bad credit ratings, it’s means they may have had credit report display issues. For example; missed or late payments, CCJs, defaults, bankruptcy or debt relief orders. 

However, if you have had several financial blips in the past, there are a few things you may look into help your chances for getting a new loan.

If investigating initially yourself the best bad credit consolidation loans - you should consider firstly check these 5 things...

1. Compare Credit Reports between the agencies
2. Your Credit history reports may differ from one agency to the next
3. It may be possible to find you could get secjured consolidation loans for very bad credit
4. Check yourself how bad is your bad credit? Or maybe it is not as bad as you first thought?
5. Access for example your Experian or Equifax credit reports

How much 'Debt Consolidation Loan for Bad Credit UK'?

How much can I borrow via my home for debt consolidation with bad credit? This will initially depend on the amount of equity value that you have built up in your property.

This equity value is the percentage % of your property owned outright by you = the value of the property less any initial mortgage finances you already owe on it.

For example, if your house is worth £335,000 and your main mortgage owing is £245,000 - then you have £90,000 potential equity.

Any further new secured 'debt consolidation loan for bad credit uk' will be measured by this above £90,000 equity example, you have in your home as security.

In the 2020's, with fluctuating UK property prices and asking can I get debt consolidation loan with bad credit is made harder as some lenders become more risk averse.

The amount of people are allowed to borrow are usually from £3,000 upwards often to over £1 million+. This may vary for secured consolidation of debts loans with bad credit.

Note: All deals are subject to the lenders individual criteria & valuation. These could be done via a full property valuation, online assessment or a drive by valuation.

Often the higher equity you have in your home, then the better your chances are of being accepted even with bad credit & with appropriate interest rates.

However, around 75% of the equity in your property in the 2020's is a fair average for lending ie; as mentioned with some uk home values falling.

So in other words, you can usually borrow less via secured loans, than via your main home mortgage.

What are the best bad credit 'consolidation of debts loan' will also vary between lenders. Unsure then, Please contact us about your Secured 'Consolidate Debt Loan Bad Credit' enquiry >

To proceed with any best secured 'loan for consolidation of debt' deal our whole of market brokers will need to know...

• Purpose of your Secured Loan ie; Debt Consolidation
• Amounts Borrowed & Term
• Personal Financial details
• Bad Credit History files
• Income & Outgoings
• Employment status | Employed or Self Employed
• Property Loan to Equity (LTV)

Plus to get secured loans for consolidation of debts loan with bad credit they will also require proof of

• Property ownership eg; recent mortgage statements
• Identity eg; passport or driving licence
• Income eg; bank statements, wage slips or tax returns

Consolidation of Debts Loan vs Remortgage?

Due to the cost of living crisis, rising UK interest rates in the 2020's or the pandemic, more people are looking online into whether to consider a consolidation of debts loans vs remortgage.

Naturally, this situation will be harder with a bad credit history. It is best to fully understand some of the key differences re your options & before you make such a large financial decision.

A remortgage is when you switch & move your existing current uk mortgage across to another lender or other product.

However, this is harder if you have bad credit and it will mean you having to re-negotiate or replace your main mortgage on your property with another.

Remortgaging is often not free & for some people it can come at a cost. When you remortgage, you could have to pay early exit redemption fees & then possibly a new remortgage setup admin charges.

Thereafter, the new remortgage provider will also likely charge their own legal & survey costs, so it is important to calculate whether these savings can make it worthwhile switching.

Note: Some mainstream mortgage providers, may only remortgage or lend to their existing customers. These deals also may not necessarily offer the cheapest interest rates against the market but perhaps you don't want to shop around?

Should you not wish to remortgage, as you believe it is not in your interests, then you could be better off using a specialist secured lender to get a 'bad credit loans to consolidate debt', particularly if your situation is slightly more complex eg; bad credit since taken out your original mortgage. Please contact us >

Further Loan Advance vs 'Consolidate Debts Loan' with Bad Credit

A mortgage further loan advance is very similar to getting a secured loan ie; you take out further secured loan borrowing & that is in additional to your main mortgage.

You maybe able to combine a further advance to borrow additional money and then product transfer switch across to a new rate on existing borrowing in one single application, if it makes financial sense.

Some lenders will not permit Further Loan advances within 6 months of completion of the original home mortgage.

Note: If your existing mortgage is in arrears anyway or you have had bad credit, then perhaps your lenders may also not accept a further advance application?

Further advances are also often not accepted on shared equity property schemes. If the further advance is above say 80% LTV, often a property revaluation may be required with associated revaluation fees.

Unlike for a new secured loan, you will be probably dealing with your existing lender. However, let us now examine some of the reasons why people would look into either options.

Note; not all main stream mortgage providers also may offer bad credit secured consolidation of debts loan for homeowners - as it is a niche marketplace. You may not have heard of some of these loan providers, as we have access to the whole of market.

So our finance brokers can check how much you can borrow against your home for 'loans to consolidate debt'. They are familiar with the market can save you both the time, stress & cost of wasted paperwork. Please contact us about home owner bad credit 'Loans to Consolidate' enquiry >

Top 10 Reasons for Consolidation Bad Credit Loans?

So given these above options, let us now look at various Top 10 reasons why secured 'bad credit loans to consolidate debt' could be another option (rather than just remortgaging).

1. Bad Credit status occurred since you originally took main domestic mortgage
2. Need to consolidate debts existing un-secured credit that a remortgage lender may not allow
3. Main mortgage is set up on interest-only & you do not want to re-mortgage over to repayment
4. Unable to get an un-secured personal loan due to your bad credit status, amount required or term
5. Wish to now borrow beyond your normal retirement ages & they will not allow that
6. Need a longer loan term for 10 years+ period to make regular payments more affordable
7. Locked into a long term main mortgage low fixed rate deal & this makes no sense to cancel
8. High early exit penalty fees are applied by your main mortgage lender
9. Main mortgage lender won't allow you to borrow anymore based on income multiple or business accounts
10. Trapped with mortgage lender & now unable to switch as you don't pass their current strict affordability tests

Note: These above examples will all depend on your circumstances & so are not to be considered personal advice. Note: secured loans for bad credit to consolidate debt interest rates maybe higher than on your main mortgage.

Remember, if you are looking to raise finance, always consider firstly either re-approaching your existing lender or ask them about an un-secured personal loan as alternative finance options.

If this doesn't work for you, then our brokers would be happy to help instead for your secured loan. Please contact us about secured 'bad credit debt consolidation loans uk' >

Can you Refinance Loans for Consolidation with Bad Credit?

Yes, it is possible to refinance your secured 'loans to consolidate' deal to another. For example, if your credit has now improved since you took out the loan & you have found any better finance rates or deals.

However, you may find it harder than say remortgaging your main mortgage, due to the UK lenders additional debt consolidate loan risk.

But provided you have made regular secured loans & other bill payments, your credit profile is now better, and your income & outgoings show your finances are well managed, then it is worth reviewing.

Conversely, if your main mortgage terms are now worth remortgaging eg; a good fixed rate deal has ended, you could now review & combine both the main mortgage & any 'consolidation of debt loans' secured deal.

What happens if you wish to move home?

If you want to sell your house, you will need to pay off any secured loan finance, as well as your main mortgage.

Sometimes, your lender may allow you transfer your existing secured loan for debt consolidate deal across to a new property.

Pros & Cons of a Secured Loan to Consolidate Debt with Bad Credit

* Pros

• Access the value in your home to help raise funds to consolidate debts
• Raise funds on a secured basis - if unable to do so unsecured
• Lower interest rates on larger sums borrowed than personal loan

* Cons

• Your home is now at risk if you cannot make the secured loan repayments
• Consolidate but then take on further debts than you can afford payments on
• You borrow more than you need and so reduce homes' loan to value

Note: Money Saving Expert Martin Lewis on Secured Loans is not really a big fan...but does appreciate that they do have their place for some people if it saves you money.

Martin Lewis says they should be considered only as a last resort .....maybe only loans to consolidate debts & if it means overall you are hopefully paying less on your outgoings.

As secured loan brokers we would say that remember, you are not clearing your debts, just re-organizing them all - to hopefully ensure that they are then fully cleared in the future.

Life Insurance on Consolidation of Debts Loans

Whilst looking to get any 'loans to consolidate debts', it is easy to also forget (especially if this a joint 'debt consolidation loans' deal) that you should also consider insuring that loan.

You probably may have some protection in place on your main mortgage. Alternatively, perhaps this was cancelled in the past due to bad credit finance issues?

However, if things have now improved financially, people often then forget about reconsidering more protection insurance for all your consolidated debts.

For example, it could also be any new secured 'debt consolidation loans' term is now longer or maybe now set up in joint names, so maybe your existing mortgage protection insurance cover policy is now inappropriate?

Do you need 'Debt Consolidation Loans' Insurance?

This is a valid query...If 2 people are taking out any a new joint bad credit consolidation loan uk based (whether married or in a couple) and those 2 people are also named on the joint debts consolidate loan deed?

Then your lender can potentially go after either one of you, for the full repayment of that joint loan if there are any issues.

This means if one of you is critically ill or sadly died, then the other person could be left with the full loan repayment. If this happens to your main family breadwinner, then the situation could be even worse.

The surviving partner could now be legally pursued by the lender for your future ongoing loan repayments. At your worst time, the situation could get even worse

Considering taking out 'debt consolidation loans uk' or remortgaging & now wondering...Do you need Insurance protection?

Then, please consider these reasons for Your 3 x Maybe....

• YOUR HOME ‘Maybe’ your biggest asset
• YOUR HOME DEBT CONSOLIDATION LOAN ‘Maybe’ now one of your biggest debts
• YOUR HOME ‘Maybe’ repossessed if you do not keep up repayments on your secured 'debts consolidation loan'

Family Life Cover & 'Consolidation Loans' Insurance?

When looking at protection insurance for your secured consolidate debt loans with bad credit, also look at the wider picture of what may happen if the worst sadly happens. People often forget about this bigger picture & so just concentrate solely on covering just their secured bad credit consolidation loan uk protection insurance cover.

Although that particular life policy has potentially protected the home you own & maybe now paid out, you may still need to have ongoing income to pay all your regular bills.

If not, and say the main breadwinners had sadly died, would you now have to sell up & move after all ?

• Your consolidate debts loan payments are only just part of your regular monthly outgoings
• Other ongoing usual expenses include Gas, Electric, Food, Travel, Credit cards, Mobile, Utilities etc;
• Regular monthly bills will not stop coming in if sadly someone dies
• Likewise you would also still have to cover funeral costs and maybe repay other outgoings
• Consider both Life Cover for 'loan for consolidation of debt' & Family Life Insurance if you have dependants (young or old)

Best Loans to Consolidate Debt = Decreasing Term Policy?

• Decreasing Protection insurance cover is meant to help insure 'repayment style' consolidation loans
• Secured loans to consolidate debt usually reduce over their term if you keep up your repayments
• A decreasing term insurance policy will also therefore reduce over its term or time period
• The plan payments however stay the same throughout the average cost life insurance plan term
• Insurers decreasing term rates are flexible for loans for bad credit to consolidate debt apr terms
• Cover is ‘underwritten’ so Insurers ask you medical lifestyle questions before offering a deal

Why is Critical Illness* more expensive?

• Critical Illness* covers a larger number of risks than life cover [could be 50/100+ benefits]
• People often like the option of including critical illness cover with their consolidation of debt loans protection insurance
• Statistically you are far more likely to be making a claim on critical illness, if included than just life cover
• For example, 50% of people will be diagnosed with a form of cancer in their lifetime [Cancer Research UK]
• It pays out on survival & recovery via specified benefit types eg; cancer, heart disease, stroke, multiple sclerosis etc;
• Note:Terminal illness benefit is often included 'free' as part of a Life Insurance cover
• Terminal Illness however on an insurance policy means you have sadly less than 12 months to live ie; won't survive
• Do not confuse these 2 loan protection benefits if looking to get secured loans to consolidate debt for bad credit

What's Loan Payment Protection Insurance?

• Designed to cover your consolidate debt loan bad credit payments against accident, sickness & hospitalisation
• A short term cover plan & usually paid for upto 12 months. May also cover unemployment & some bills but not lifecover
• Some new Insurers may not offer unemployment part of policy due to the pandemic
• Loan Protection Payment is similar to PPI. However, the codes for this product sale have tightened
• Various risks, pre-existing issues or employment problems may well have initial exclusions after policy starts
• Not medically underwritten [unlike PHI Income Protection] meaning cover is offered with no medical tests or GP reports

'Bad Credit Debt Consolidation Loans UK' & Income Protection?

• Designed to pay out Income Tax Free longer term to help your regular payments & ongoing bills
• Usually PHI has an initial waiting or deferred / waiting period from 1/4/8/13/26/52 weeks 
• Plans upon a claim can usually run the term of the home secured loan or upto age 70
• Medical evidence is usually required for underwritten PHI insurance before any terms offered
• Insurers calculator for home equity loans may be based on loan amount borrowed only
• Or a maximum of say upto 70% of your pre-tax gross annual earnings

'Consolidate Debt Loan with Bad Credit' Conclusion

Having read this consolidate debt loan bad credit review and have decided you need a secured consolidate debt loan with bad credit may be your only financial solution in 2025? You have considered their various pros & cons we raised.

So, whether you wish to go direct, having read this guidance & not shop around for what are the best consolidate debt loan bad credit uk deals? Or instead, prefer to speak to a professional broker about this. You pay’s your money & takes your choice. 

As secured loan brokers, our Finance Brokerage are FCA regulated, so are well placed to help you out.

Whatever your credit status, bad or good…please contact us for help re your ideal financial solutions. Note, since the pandemic many financial advice services have now changed. 

Face to face is where advice is delivered by a qualified broker, who may travel to a customer’s home or other location of choice. There, they will discuss your needs & answer any questions.

Telephone advice is where the advice is provided primarily over the telephone or on zoom by a qualified brokers who deal with all types of secured consolidate debt loans bad credit. This is then supported by an appropriate call centre for the purpose, with call recording, data storage and appropriate monitoring procedures in place.

Looking for sound advice & chatting with a suitably qualified FCA regulated broker about a bad credit loan secured deal?

Please contact us about your loan debt consolidation bad credit enquiry >

Article: ‘Loans for Bad Credit Secured’ Martyn Spencer Financial Adviser (2025)

Consolidate Debt Loan Bad Credit | Secured Loan UK