4 min read

Debt consolidation - is it right for you?

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Whatever the reason you have debt, many of us struggle to know how to pay it back without it costing a fortune or taking too long.

There is no ‘one size fits all’ solution when it comes to debt so it’s important to review all of the options available so you can make the best choice for your situation.


I have existing debt, what are my options?

According to The Money Charity, the average Brit has £3,674 of unsecured debt. If you are one of those people, your debt may be costing you more than you realise. When was the last time you checked how much interest you’re paying on your credit card or your personal loan? The first step is to take a look at your current interest rates, as well as how much you owe. Once you know what that debt is costing you, you’ll find it easier to know where to start. 


How can I pay off my debts quicker?

If you find yourself in a position where you are saving money on some expenses, could you use that money to pay off more of your debts or make additional repayments? The sooner you can pay off your debt, the less you will pay in interest. Another option that could help you to pay off your debts quicker is to consolidate them into one lower-rate loan.


What is debt consolidation?

Debt consolidation is when you use a loan to pay off some or all of your other unsecured debts. Unsecured debts include credit cards, store cards, overdrafts, personal loans and payday loans, but excludes your mortgage. A debt consolidation loan can be used to pay off higher cost debt or multiple high cost debts at a lower rate.


Is debt consolidation right for me? 

Debt consolidation is not the best solution for everyone. When paying off debts, it’s important to look at the interest rates as well as the total repayment amounts. For example, the table below shows three different repayment options on a £4,000 loan.



Option 1

Option 2

Option 3

Amount borrowed




Interest rate



13.9% (example only - rate may vary)

Time to repay

32 years

10 months

2 years

8 months

2 years


Minimum repayment

£200 monthly

Salary Finance debt consolidation fixed monthly payment of £190.33

Total paid




Extra paid in interest





What it essentially means is, if you can access a lower rate you will repay your debt quicker, and it will cost you less. Debt consolidation could help you save significant amounts of money, but it’s important to consider: 

  • The rates & fees. Always look at the interest rate and ensure that it is lower than what you are currently paying. Also consider if there are any fees related to paying off your current loan or any associated with the consolidation loan you are looking at taking on.
  • The duration of the loan. If you access a lower rate - can you repay the loan quicker?
  • The amount you would need to pay each month. Make sure you consider this and you can afford the repayments.


Can Salary Finance help me?

If you have high cost debt and want to explore consolidating, Salary Finance may be able to help. At Salary Finance we take loan repayments straight from your salary.

To find out if a Salary Finance loan could help you consolidate your debt, visit:

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