What exactly are they, and might they be the right choice for you?

Consolidation Loans are one of our most popular lending products here at The Co-op Credit Union. If you have outstanding debts with other lenders, a consolidation loan with us could potentially both save you money on your existing repayments and help you clear your debt quicker.
Sounds good? Consolidation Loans can certainly be a helpful way to get back on track with borrowing. But it’s important that you understand the full picture before deciding if applying for a Consolidation Loan is right for you. Let’s take a closer look…
What is a consolidation loan?
Put simply, a Consolidation Loan is a way to combine multiple debts, such as credit cards, into one single loan with a single interest rate.
How could it help me?
A Consolidation Loan could help by potentially reducing your monthly debt payments and while getting debts repaid over a quicker time frame– as long as the interest rate (APR) is lower than the individual loans you are looking to clear.
A Consolidation Loan can also help by making your repayment schedule and monthly budgeting far simpler. There will be only one regular loan payment to manage instead of multiple payments going out on different dates each month.
Additionally, consolidating debts and getting into a regular repayment schedule could potentially help improve your credit score by actually bringing down your debts over time and demonstrating your ability to manage debt.
Is there anything to watch out for when taking out a Consolidation Loan?
Yes – it’s really important to make sure that you’re not simply adding to your debts when you take out a consolidation loan. You do need to be serious about stopping using the other lines of credit that are being paid off.
Also, you should ensure the interest rate (APR) on the Consolidation Loan is lower than your other borrowing otherwise you will be paying more for your new loan. And you should check you can afford the new monthly repayments.
Also, make sure you’re aware of any costs involved. Unlike some lenders, here at The Co-op Credit Union there are no fees or hidden costs with any of our loans so you can always be sure that you are getting a fair deal.
How long is a typical Consolidation Loan term with The Co-op Credit Union?
The term of our Consolidation Loan can be set to create a suitable monthly repayment that you can comfortably afford – up to a maximum of 5 years depending on the total outstanding debt. Crucially for our members, this is usually at a far lower interest rate than they are paying on their existing arrangements, so more of the repayment goes towards clearing the debt.
Unfortunately, we often see members who only pay the minimum repayments to their credit cards each month, which never reduces the actual debt and keeps the monthly payments going indefinitely, unlike the consolidation loan, which ensures the debt is repaid over a suitable time frame.
Are there any other benefits?
The right Consolidation Loan can not only get you on the path to becoming debt-free, but it can also have a huge impact on your mental health and wellbeing by reducing money worries and helping you get back in control of your finances. Our members often tell us what a difference their Consolidation Loan has made to them – see just a few examples below.
Am I likely to be accepted?
All loan applications are subject to our usual affordability and credit checks. As a credit union we do everything we can to support our members and do our best to say “yes” to as many applications as we can. However, we are also committed only to lending where it is affordable and responsible to do so.
Ready to apply? Apply now with our online application.

Real Stories
Take a look at some of our real member examples below to see how our Consolidation Loans are putting more money back in members’ pockets each month and making a difference in their lives.
Mrs T. had a £15k consolidation loan – she was paying £507.00/month on her old debts, which we reduced to £337.00/ month with a Co-op Credit Union Consolidation Loan. The previous APR was between 39.9% and 28.9% elsewhere, which was reduced to 16.8% with us.
She told us that she was able to afford a car with the monthly savings and that the loan took her from a scary place where she was out of her depth with credit card debt, and couldn’t access credit elsewhere, enabling her to get her life back on track. The Consolidation Loan not only saved her a considerable amount of money but helped her rebuild her poor credit score, ultimately allowing her to access a mortgage and become a homeowner.
Mr B – we were able to reduce his monthly repayments by £300 pcm – he was paying £550.00 per month on his old debts, which we reduced to £250.00 per month with our Consolidation Loan. The APR before was 29.8% which reduced to 16.8% with us.
Mr M – we were able to reduce his monthly repayments by £300 per month. He was paying £600.00/month which was reduced to £300.00 – APR was 29.8% before, and is now 16.8% with us.
Mr I – savings of £700 pcm – he was paying £1,050.00/month which reduced to £345.00/month The previous APR was 34.9% and is now reduced to 16.8%.
Mrs A – savings of £435 pcm. She was paying £975.00/month which was reduced to £435.00 with us. The APR before was between 37.9% and 34.9% and is now 16.8%.
The ability to make just one repayment direct to her credit union and to save £150.00 each month was life-changing in the member’s own words – ‘
“Thank you for your help and for enabling me to change my financial life around. Seeing how I can become debt free in 5 years has most certainly given me a brighter future. Thank you”