Debt consolidation means combining several debts into one single monthly repayment.
Debt consolidation can be a way to help better manage your monthly budget and reduce the number of creditors you need to pay at one time.
You may choose to apply for a debt consolidation loan, or you may consider a debt solution like a Trust Deed, IVA or DRO to manage your debts.
This hub features all of our articles about debt consolidation.
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Debt Management Plans (DMPs)
A Debt Management Plan (DMP) is an informal debt solution available in England, Scotland, Wales, and Northern Ireland. It involves making one monthly payment to a debt management provider, who then distributes the money to your creditors. Your payments are based on what you can afford after you’ve covered your essential living costs, and will last for as long as it takes you to repay the included debts in full.
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Individual Voluntary Arrangements (IVAs)
An Individual Voluntary Arrangement (IVA) is a formal debt solution available in England, Wales, and Northern Ireland. It allows you to repay your debts through manageable monthly instalments over a set period (typically five years). Once approved, interest and charges on included debts are usually frozen, and creditors generally cannot take legal action against you or contact you to request payment. Any remaining debts included in the IVA will typically be written off once you’ve successfully completed the arrangement.
Thinking about consolidating?
Our advisors will explain the pros and cons of each option, including any risks, costs, and impact on your credit file, so you can choose the solution that’s right for you.
