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Derin Clark

Derin Clark

Online Reporter
Published: 10/10/2019

With the average debt levels in the UK rising by 6% since 2016, many consumers are struggling to pay back money owed on credit cards and other debt. With only three months left until the end of 2019 and the current economic uncertainty looking to continue until the end of the year, borrowers with debts could look at getting a head start on organising their finances before 2020 by consolidating their debts now.

At the moment, personal loan rates have remained fairly stable, however, with the current economic climate personal loan rates could increase. We saw this happen in the credit card market where the average APR was at its highest level since Moneyfacts started keeping records 13 years ago. As such, consumers should consider acting sooner rather than later in case personal loan rates start to rise as well.

Should you consolidate your debts?

Consolidating debts is a useful way of managing debts with multiple lenders, as it allows the borrower to transfer all debts into one loan so that they are just paying one payment to a single lender each month. Normally, a personal loan can be taken out to consolidate debts and ideally will offer a lower APR than being paid across the multiple debts, however the actual APR a consumer will be able to get will usually depend on their credit rating. For more information on credit ratings, read our guide on how to improve your credit score.

Personal loan rates

Provider Representative APR Loan amount Loan period
John Lewis Financial Services, Personal Loan 2.9% £12,500 24 months
M&S Bank, Personal Loan 2.9% £12,500 24 months
Sainsbury’s Bank, Standard Nectar Cardholder Loan 2.9% £12,500 24 months
Tesco Bank, Telephone Personal Loan 2.9% £12,500 24 months
Tesco Bank, Online Personal Loan 2.9% £12,500 24 months

At the moment competition within the personal loan chart remains strong, with all the top five loans available to new customers offering a 2.9% representative APR. In addition to this, all these loans are also available to borrowers wanting to consolidate debts. John Lewis Financial Services, M&S Bank, Sainsbury’s Bank and Tesco Bank are all offering the top rate in the chart on a loan of £12,500 over a 24-month period. Consumers who are cautious about applying for a loan in case a rejection impacts their credit score can apply for one through our pre-approved personal loans page.

When taking out a personal loan to consolidate debts, it is important that borrowers do not get into further debts by continuing to borrow. Instead, it is advisable to create a payment plan that ensures the debt is paid off within a predetermined timeframe.

Struggling to pay debts

Consumers who are struggling to pay back debts should seek advice to help them manage and pay off their debts. Those experiencing difficulties can contact StepChange on 0800 138 1111 or Citizen Advice on 03444 111 444 for advice.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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