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A debt consolidation loan allows you to combine several existing debts into one new loan, usually with a single monthly repayment.It can be used to repay borrowing such as credit cards, overdrafts, personal loans and other outstanding credit commitments.
Depending on your circumstances, debt consolidation may help you simplify your finances, reduce the interest rate on some of your borrowing or lower your monthly repayments.
However, lower monthly repayments don’t necessarily mean the loan will cost less overall. If you spread the debt over a longer term, you could pay more interest in total.
At Willows Finance, we help homeowners explore secured debt consolidation loans and understand the borrowing options available to them.
Debt consolidation works by taking out a new loan to repay some or all of your existing debts.
For example, you might have balances outstanding on two credit cards, an overdraft and a personal loan. Rather than continuing to make separate repayments to each provider, you could take out a consolidation loan to clear those balances and make repayments towards the new loan instead.
The new lender will assess how much you need to borrow, your financial circumstances and whether you can afford the repayments. Depending on the product and lender, the funds may be used to settle your existing creditors directly or released for you to make the repayments.
Before proceeding, it’s important to check the full cost of the new loan, including interest, fees and any charges for settling existing debts.
There are two main ways to consolidate debts: with an unsecured loan or a secured loan.
An unsecured debt consolidation loan doesn’t require you to offer your home or as security.
These loans are often structured as personal loans, with the amount available and the interest rate depending on your credit history, income and affordability.
Unsecured loans can be suitable for smaller amounts of borrowing, although loan sizes and repayment terms vary between lenders.
A secured debt consolidation loan uses your property as security for the borrowing.
For homeowners with sufficient equity, this can provide access to larger loan amounts or longer repayment terms than may be available through an unsecured personal loan.
Some secured loan lenders may also be able to consider applicants whose credit history doesn’t meet the criteria of mainstream unsecured lenders.
The interest rate offered will depend on factors including your credit profile, affordability, the property and the amount being borrowed.
Your home may be repossessed if you do not keep up repayments on a loan secured against it.
Secured consolidation should therefore be considered carefully, particularly when replacing credit card balances or other debts that were previously unsecured.
Before you submit an application for a debt consolidation loan it’s a good idea to weigh up the pros and cons to see if it suits your financial circumstances.
Pros
Ms Boothby
Monthly Reduction £732
Mr Farid
Monthly Reduction £622
Ms Nyoni
Monthly Reduction £738
Mr Simmonds
Monthly Reduction £629
Mr & Mrs Coombe
Monthly Reduction £636
Mr & Mrs Bowers
Monthly Reduction £543
Cons
Ms Boothby
£722
Monthly Reduction by consolidating with a loan
A debt consolidation loan may offer several benefits, depending on your existing borrowing and the terms of the new loan.
One monthly repayment: Combining several debts can make it easier to keep track of what you owe and when payments are due.
Potentially lower monthly payments: A different interest rate or longer repayment term may reduce your monthly outgoings.
A clearer repayment schedule: A fixed-term loan can give you a defined repayment period, provided you make the required payments.
Potential interest savings: If the new loan has a lower rate and the overall repayment costs are favourable, consolidation could reduce the amount of interest you pay.
Fewer separate credit commitments: Repaying existing accounts can simplify your finances, although it’s important not to build up new balances afterwards.
The potential benefits should always be weighed against the fees, repayment term and risks of the new borrowing.
Debt consolidation isn’t the right choice for everyone.
Before applying, consider the following risks and potential costs.
Your home could be at risk: With a secured consolidation loan, failure to maintain repayments could ultimately lead to repossession.
You could pay more interest overall: Extending the repayment term can increase the total amount paid, even when the monthly repayment is lower.
Fees and charges may apply: These can include loan fees and early repayment charges on existing borrowing or the new loan.
The interest rate may not be lower: Your rate will depend on the lender’s assessment of your circumstances.
You may be turning unsecured debt into secured debt: Credit card and personal loan balances that weren’t secured against your home could become part of borrowing secured against it.
Consolidation doesn’t prevent new debt: If you continue using cleared credit facilities, you could end up owing more than before.
It’s important to compare the total amount repayable and consider whether the new loan will improve your financial position over the full term.
Yes. Debt consolidation may reduce your monthly repayments, particularly if the new loan has a longer repayment term or a lower interest rate than your existing borrowing.
However, the amount you could save each month depends on the debts being repaid and the terms of the new loan.
For example, someone paying several high monthly repayments on credit cards and personal loans may be able to replace them with one lower monthly payment.
The trade-off is that spreading the balance over a longer period can mean paying interest for more years.
At Willows Finance, we can help you compare the proposed monthly repayment with your existing commitments and understand the total borrowing costs.
You can also use our debt consolidation calculator to explore how different borrowing amounts and repayment terms might affect your monthly payments.
Here are few key questions worth asking before you apply for debt consolidation loan:
Before consolidating your debts, it’s important to consider whether the new repayments will be affordable throughout the loan term.
Lenders will assess your income, regular expenditure, existing credit commitments and overall financial circumstances.
For a secured loan, they will also consider your property’s value, available equity and other lending criteria.
A lower monthly payment may make your budget easier to manage, but you should also consider how the repayments would be affected by changes in your income or household expenses.
If you’re already struggling to maintain essential payments or borrowing commitments, it may be worth seeking free, independent debt advice before taking on a new loan secured against your home.
Potentially. Some specialist secured loan lenders can consider applications from homeowners with a less-than-perfect credit history.
The lender may assess factors such as missed payments, defaults, county court judgments (CCJs), current credit commitments and how recently any credit problems occurred.
Your income, affordability and available property equity will also be relevant.
Having adverse credit doesn’t automatically mean you’ll be declined, but it may affect the lenders available, the interest rate offered and the amount you can borrow.
If you’ve had credit difficulties, we can review your circumstances and identify lenders whose criteria may be suitable.
Applying for a debt consolidation loan can affect your credit file, depending on the type of credit search carried out.
A lender’s full application may involve a hard credit search, which can be recorded on your credit report. Taking out a new loan, closing or reducing existing balances and making repayments can also influence your credit history over time.Making repayments on time may help demonstrate responsible credit management, but debt consolidation doesn’t guarantee an improvement in your credit score.
At Willows Finance, you can request an initial quote without affecting your credit score.
Before proceeding, make sure you understand:
Which debts will be repaid
Whether any existing debts have early settlement charges
The monthly repayment on the new loan
The interest rate and whether it is fixed or variable
Any fees added to the borrowing
The length of the repayment term
The total amount repayable
Whether the new loan is secured against your home
Any early repayment charges on the new loan
If the main reason for consolidating is to reduce monthly outgoings, pay particular attention to the overall cost of borrowing.
Potentially. Some lenders may consider borrowing intended to repay an existing bridging loan, although this will depend on the property, the outstanding balance and the proposed finance arrangement.
Bridging loans are usually short-term facilities with an agreed repayment strategy, sometimes called an exit strategy.
If your bridging loan is approaching its repayment date, it’s important to establish whether a longer-term secured loan, remortgage or another finance product could be suitable.
The lender will need to consider the property being used as security, any existing charges, affordability and the amount required to settle the bridging loan.
Not every conventional debt consolidation product will be suitable for this purpose.
If you’re looking to repay a bridging loan, tell us the outstanding balance, repayment date and property details so we can help establish which finance options may be available.
Flexible Loan Uses – Borrow for commercial expansion, equipment upgrades, or financial restructuring.
Access funds upfront while keeping monthly payments low with an interest-only secured loan.
No Need to Remortgage: Keep your existing mortgage and secured terms .
We work with lenders that consider applications from individuals who are currently in a debt management plan
Secure a loan against non-traditional properties, including PRC, and steel-framed.
Access lenders who accept benefits like PIP, Carer’s Allowance, and Universal Credit.
Getting a quote won’t affect your credit score
We’re extremely proud to be rated ‘Excellent’ for our service standards. We’ve helped thousands of customers across the UK over the last 15 years to find the right finance for their needs – no matter how complicated the circumstances. And we look forward to helping you.
Finding the right finance doesn’t have to be complicated – so, we’ve made the process clear and simple. Whether you’re applying for a Secured Loan, Mortgage or Bridging Finance, we’ll compare the market for the best options that meet your criteria and provide you with a fast no-obligation quote.
The initial enquiry takes under 2 minutes to request an in-principle loan or mortgage quote.
We compare lenders to provide your best options in minutes with no affect to your credit score.
Happy with your quote – we make completing the process simple and easy for the lender to approve.
We’re here to help every step of the way and ensure you get your money quickly.
Debt consolidation can help simplify repayments and may reduce monthly outgoings, but it’s important to understand the costs and risks before making a decision.
At Willows Finance, we work with secured loan lenders offering different borrowing amounts, repayment terms and eligibility criteria.
Our advisers can review the debts you’re considering consolidating, your available property equity and your financial circumstances to help identify suitable options.
We can also explain how the proposed repayments and total loan costs compare with your existing borrowing.
Request a free, no-obligation quote or call 01656 766 158 to discuss secured debt consolidation with one of our experienced advisers.
Getting an initial quote won’t affect your credit score.
Your home may be repossessed if you do not keep up repayments on a loan secured against it.
If you have a question – we’d be happy to talk to you – simply call us…
(Mon-Fri 9am-8pm, Sat 10am-1pm)
Our Rating
At Willows Finance we ensure your personal information is kept secure and confidential.
PRIVACY OF YOUR INFORMATION
At Willows Finance Ltd, we appreciate that your privacy is extremely important to you. With this in mind, we have put in place a number of measures to ensure that any personal details we obtain from you as a result of visiting this website is processed and maintained in accordance with accepted principles of good information handling and also in accordance with the Data Protection Act 1988.
This statement provides you with details of the type of information we may hold about you, how we obtain and use information and how we protect your privacy.
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Authorised and regulated by the Financial Conduct Authority
Firm Reference Number: 670052
Company Number: 06678545 (Registered in England and Wales)
This document explains the services we provide, the range of lenders and products we consider, how mortgage advice may be provided, and how Willows Finance may be paid. Please read it carefully before proceeding with an application.
If you need clarification about any part of this document, please contact us on 01656 766158.
Willows Finance arranges first and second charge mortgage products. Depending on the circumstances of the application, these may include:
We also arrange both regulated and unregulated bridging finance.
Not every product will be suitable or available to every customer. The products considered will depend on your circumstances, borrowing requirements, purpose of the borrowing, property, intended use of the property and the relevant lender criteria.
Depending on your circumstances, Willows Finance may:
If you are looking to increase borrowing secured on a property which already has a regulated mortgage, there may be different ways of raising the additional funds. Depending on your circumstances, these may include:
Where applicable, we will make you aware of these alternatives before proceeding. The options we are able to assess or advise on will depend on the service being provided and the lenders available to us.
The regulatory status of a mortgage or bridging loan depends on the circumstances of the transaction, including the property, how it is or will be occupied, the purpose of the borrowing and the customer’s circumstances.
Our business includes:
We will identify the regulatory status applicable to your application and explain the service and protections that apply. The protections available to you can differ depending on the type of mortgage or loan.
The range of lenders and products we consider depends on the type of finance you require.
We offer a comprehensive range of second charge mortgages from across the relevant market using a representative panel of lenders. We review our panel regularly to ensure that it remains sufficiently broad and representative. We do not consider products that are only available by applying directly to a lender.
We only offer first charge mortgages from a limited panel of 13 lenders. We consider the first charge mortgage products made available to us by Kensington Mortgages, The Mortgage Works, Aldermore, United Trust Bank (UTB), Together, Masthaven, West One, Norton, Bluestone, Vida, Pepper Money, Mansfield Building Society and Nationwide Building Society.
We do not offer every first charge mortgage available from across the market.
We consider products from a range of lenders available to Willows Finance for the relevant transaction.
Consumer Buy-to-Let and unregulated Buy-to-Let applications are considered within the relevant first charge, second charge or bridging route, depending on the structure of the transaction.
We do not provide a whole-of-market service and do not claim to consider every mortgage or secured finance product available in the UK. Our assessment is based on the lenders and products available through our lender and distribution arrangements.
Where the applicable regulatory rules require us to identify the lenders whose products we offer, the relevant lender list will be provided to you in a durable medium as part of the initial disclosure for your application. A lender list is also available on request where applicable.
The service provided will depend on the lender, product and application route identified for your circumstances.
Where Willows Finance provides the mortgage advice, we provide an advised mortgage broking service. We will obtain information about your needs and circumstances, assess the lending options available within the scope of our service and, where appropriate, make a mortgage recommendation.
We will make it clear where Willows Finance provides the mortgage advice and recommendation.
We may also provide a packaging service. This is a non-advised administrative service under which we may collect information and supporting documents, complete administrative checks, liaise with the relevant parties and submit or progress an application.
When we provide a packaging service, we do not assess the suitability of the mortgage, provide mortgage advice or make a personal recommendation. Any regulated mortgage advice or recommendation will be provided by the appropriately authorised intermediary responsible for advising you.
Our packaging service is not a regulated advisory service. However, the mortgage itself and any arranging activity connected with it may still be regulated and subject to the applicable regulatory requirements. We will explain the nature and regulatory status of the service we are providing before you proceed.
For some applications, particularly certain second charge mortgage applications, our sourcing exercise may identify a route where the subsequent mortgage advice is provided by another regulated mortgage intermediary.
In these cases, the Willows Finance service may include:
After the introduction, the receiving intermediary may take over the detailed application, advice and recommendation process. We will make it clear where this type of referral arrangement applies.
Where our sourcing process identifies Evolution Money Limited as an appropriate route and we introduce your application to Evolution Money, Willows Finance will not provide the regulated mortgage advice or make the final mortgage recommendation in relation to the Evolution mortgage.
Following the introduction, Evolution Money Limited will take over the detailed application and advisory process. Evolution Money will assess your needs and circumstances and will be responsible for any regulated mortgage advice and recommendation it provides in relation to the Evolution mortgage.
Willows Finance remains responsible for the service it provides before and in connection with the referral, including its initial assessment, sourcing and introduction activity.
If you are experiencing financial difficulty, or if you are considering borrowing to consolidate existing debts, free and impartial debt advice is available from MoneyHelper and other free debt-advice organisation.
MoneyHelper: www.moneyhelper.org.uk
You should consider obtaining free debt advice if you are unsure whether further borrowing or debt consolidation is right for you.
We process your personal information in accordance with our Privacy Policy. Where we introduce you to a lender or another intermediary, that organisation will process your information in accordance with its own privacy information.
Willows Finance Privacy Policy: willowsfinance.co.uk/privacy-cookie-policy/
The way Willows Finance is paid depends on the lender, product and application route. We may receive a fee paid by you, commission paid by a lender or another third party, or a combination of these. We will explain the basis on which we will be remunerated in connection with your application.
Where Willows Finance off an advised service our fees are split into two parts. A fee for the advice you receive and a fee for the processing of the application to completion. Both of these fees can be added to the loan rather than paid upfront or you have the option of paying them in advance. We do not arrange loans below £10,000.
For the advice the fee is as follows;
For a first charge mortgage, our advice fee is 5% of the amount borrowed, subject to a minimum fee of £625 and a maximum fee of £1,250.
For a second charge mortgage, our advice fee is 5% of the amount borrowed, subject to a minimum fee of £625 and a maximum fee of £1,750.
For a first charge mortgage, our processing fee is 5% of the amount borrowed, subject to a minimum fee of £625 and a maximum fee of £1,250.
For a second charge mortgage, our processing fee is 5% of the amount borrowed, subject to a minimum fee of £625 and a maximum fee of £1,750.
| Service | First charge | Second charge |
|---|---|---|
| Advice fee | 5%, min £625, max £1,250 | 5%, min £625, max £1,750 |
| Processing fee | 5%, min £625, max £1,250 | 5%, min £625, max £1,750 |
On borrowing of £10,000 5% would be £500, but the minimum fee for advice and processing means that we would charge £625 for each to £1250 in total.
On borrowing £20,000 the total fees would be £2,000
On borrowing £50,000 the maximum fee means that we would charge a total of £2500 for a 1st charge mortgage and £3500 for a 2nd charge mortgage.
If your mortgage or loan completes following an introduction made by Willows Finance, we will receive commission from the lender or another third party in the distribution chain unless we tell you otherwise. Different lenders may pay different amounts and may use different commission models.
Commission models may include:
The availability or amount of commission does not determine which lender we consider appropriate for your circumstances. Where applicable, we will tell you that commission will be received.
For an MCD regulated mortgage (a mortgage within the Mortgage Credit Directive rules), where the exact amount of commission is not known at the time of the initial disclosure, we will tell you that the actual amount will be disclosed later in the ESIS. Where applicable and on request, we will also provide information about how commission levels vary between lenders offering the mortgage being considered.
Where we introduce you to Evolution Money, the commercial arrangement is different from a broker fee charged directly by Willows Finance.
Under the current Evolution arrangement, Evolution Lending charges a Product Fee equal to 10% of the net loan advance, subject to a maximum of £5,000. If the mortgage completes, Evolution pays the corresponding amount to Willows Finance as commission/remuneration for the sourcing, distribution and introduction service.
The amount of the product fee and the amount of remuneration payable to Willows Finance will be disclosed to you in the relevant mortgage documentation before completion.
Example: on a £10,000 net advance, a 10% Product Fee would be £1,000. The actual Product Fee and the amount of commission payable to Willows Finance will be set out in the relevant Evolution mortgage documentation before completion.
If you choose to add a Product Fee or other fee to your mortgage, interest will be charged on that amount while it remains outstanding, increasing the total amount you repay.
Where a Willows Finance fee is payable only on completion, it will not become payable if the mortgage does not complete. Any fee payable before completion, third-party costs and the circumstances in which a fee is refundable or non-refundable will be explained where applicable.
Fees which have become payable following completion are generally non-refundable unless the relevant contractual terms, applicable law or regulatory redress require otherwise.
Before you become bound by a regulated mortgage, you will receive the relevant mortgage illustration or European Standardised Information Sheet (ESIS) and the lender’s offer documentation as applicable.
These documents contain important information about the proposed mortgage, which may include:
Please read these documents carefully. If anything is unclear or does not reflect your understanding, contact the firm responsible for the advice or recommendation before proceeding.
You may tell us that you no longer wish to proceed with an application before completion. Whether any third-party cost is payable or refundable will depend on its own terms.
For an MCD regulated mortgage (a mortgage within the Mortgage Credit Directive rules), the lender will provide a binding offer with a reflection period of at least seven days. You may normally accept the offer during that reflection period if you decide to proceed.
Once a mortgage has completed, there is generally no right simply to cancel or withdraw from the mortgage. You may have a right to repay the mortgage early in accordance with its terms, and an early repayment charge may apply.
Always check the early repayment section of the ESIS and mortgage offer before completion if early repayment or regular overpayments are important to you.
If you miss or make late payments, the lender may apply charges, and your credit record may be affected. Continued failure to maintain payments may result in enforcement action and ultimately repossession of the property used as security.
If you are experiencing financial difficulty, contact your lender as soon as possible and consider obtaining free independent debt advice.
Consolidating existing debts into a mortgage can reduce monthly payments but may increase the total amount of interest you pay if the borrowing is repaid over a longer period.
Debts which are currently unsecured may become secured against your home. Extending the repayment period may mean that you pay considerably more overall even where the monthly payment is lower.
Interest rates on variable-rate mortgages can increase, which may increase monthly repayments and the total amount repaid.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT.
If you are dissatisfied with any aspect of the service provided by Willows Finance, please contact us:
Willows Finance Limited
Brocastle, Bridgend, CF35 5AS
Telephone: 01656 766158
Email: [email protected]
We will investigate your complaint in accordance with our complaints procedure. If you remain dissatisfied with our final response, or in other circumstances where you are eligible to do so, you may be able to refer your complaint to the Financial Ombudsman Service.
Financial Ombudsman Service: www.financial-ombudsman.org.uk
Where another regulated intermediary has provided the mortgage advice or recommendation, complaints about that firm’s advice should normally also be raised with that firm. You can still complain to Willows Finance about the service provided by Willows Finance.
The Financial Ombudsman Service can generally consider complaints about regulated or otherwise covered activities, including certain activities that are ancillary to them. It may not be able to consider a complaint that relates solely to an unregulated product or service and has no connection with a regulated or otherwise covered activity. Whether a complaint falls within its jurisdiction will be determined by the Financial Ombudsman Service based on the individual circumstances.
Willows Finance Limited is covered by the Financial Services Compensation Scheme for eligible regulated activities. If an authorised firm is unable to meet an eligible claim, compensation may be available from the FSCS.
For protected home finance mediation, the current compensation limit is 100% of an eligible claim up to £85,000 per eligible claimant, per firm. Eligibility depends on the circumstances of the claim and the applicable FSCS rules.
FSCS protection does not generally apply to a claim arising solely from an unregulated product or service, including any packaging service that falls outside regulated home-finance mediation. Whether a claim is eligible will depend on its individual circumstances and the applicable FSCS rules.
Further information: www.fscs.org.uk
Once we have received sufficient information about your circumstances and requirements, we will carry out the relevant initial assessment and sourcing process and explain which application route applies to you.
Where Willows Finance provides the mortgage advice, we will continue through our advised mortgage process and explain any recommendations made.
Where your application is referred to another regulated intermediary, such as Evolution Money, we will explain that the receiving intermediary will take over the subsequent application and advisory process where applicable.
Please review all mortgage illustrations, ESIS documents, fee and commission disclosures, offer documents and other terms carefully before deciding whether to proceed. If anything is unclear, ask before committing to the mortgage.
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