Yes! You can get a debt consolidation loan with bad credit in the UK. But it’s not always straightforward, and the terms might not be as favourable as they are for borrowers with strong credit.
If you’re juggling multiple debts and struggling to keep up, consolidating can still be a smart move. This guide explains your options, what lenders look for, and how to boost your chances - even if your credit score isn’t perfect.
What is considered a Bad Credit Score in the UK?
There’s no single score used across all lenders, but here’s a general rule of thumb:
"Bad Credit" per Credit Agency
- Experian
- Below 721
- Equifax
- Below 439
- TransUnion
- Below 566
If your score is in these lower ranges, lenders may see you as higher risk — which can impact the interest rate, loan amount, or approval chances.
Why Lenders Are cautious
When you apply for a consolidation loan with bad credit in the UK, lenders worry that:
- You’ve missed payments in the past
- You may be carrying high levels of unsecured debt
- You’re at greater risk of defaulting
As a result, they may either decline your application, offer a higher interest rate, or require additional security (like a guarantor).
That said, not all lenders take the same approach - and some specialise in helping people with poor credit.
Your options for a Consolidation Loan with bad credit
1. Guarantor Loans
If you have a trusted friend or family member with good credit, they can act as a guarantor. This gives the lender more confidence and can help you:
- Access better rates
- Borrow a higher amount
- Build credit by repaying on time
But be aware: if you miss payments, your guarantor becomes responsible.
2. Secured Loans
A secured debt consolidation loan uses an asset (typically your home) as collateral. Because the lender has a fallback if you default, they may:
- Approve you more easily
- Offer a lower interest rate
However, this comes with serious risk: you could lose your home if you can’t repay.
3. Credit Unions
Local credit unions are often more flexible than banks. They may:
- Consider your individual circumstances
- Offer smaller loans with fair rates
- Not rely solely on your credit score
They’re a great option for community-based, ethical borrowing.
📖 Related reading: Debt Consolidation Loans UK: What They Are and How They Work
Tips to improve your chances of approval
- Check your credit report for errors and dispute anything incorrect
- Reduce your existing credit utilisation (try to stay below 30%)
- Register on the electoral roll for identity verification
- Avoid multiple applications in a short period as they can hurt your score
- Consider starting small and building your repayment history
Even small steps can help you access more affordable debt solutions over time.
📎 Use our free calculator to explore how Incredible can help you pay off your cards, regardless of your credit score.
Risks to Be Aware Of
When seeking poor credit debt help, be cautious of:
- High interest rates as some bad credit loans come with APRs over 40%
- Unregulated lenders offering "quick fixes" with hidden fees
- Overextending yourself: only borrow what you can afford to repay
- Securing debt against your home without a backup plan
Make sure to compare options and fully understand the terms before committing.
📖 Related reading: How to Consolidate Your Credit Card Debt in the UK (Step-by-Step Guide)
Final Thoughts
Getting a consolidation loan with bad credit in the UK isn’t impossible - but it requires care, research, and sometimes, compromise. Whether through a guarantor, secured loan, or credit union, there are ways to take control of your debt and move forward.
