Debt consolidation loans

Debt consolidation is a way to combine some or all of your debts into one single monthly payment.

It means you could make one payment per month, rather than several. This can make it easier to keep track of all your payments.

With Shawbrook, this involves you taking out an unsecured loan which you use to pay off existing debts.

However, the terms may be different, and the overall cost could increase so read the terms carefully before entering into an agreement.

Other types of debt consolidation include a second charge mortgage or a balance transfer. A balance transfer refers to moving debt from one account or credit card to another.

Debt consolidation can cause a temporary dip in your credit score but can improve your rating over time.

This is because being accepted for a loan will require what’s known as a ‘hard search’ – a type of credit check that will leave a record on your file which can lower your credit score and can be seen by other lenders.

But over time, debt consolidation loans may help to improve your credit score. That’s because having one monthly repayment can make it easier for you to pay on time, every time.

Receiving a quote for a debt consolidation loan from Shawbrook Bank won’t affect your credit score as the record, known as a ‘soft search’, isn’t visible to anybody but you. You will only impact your credit score if you apply for the loan.

Find out about the difference between a hard and soft search. 

A range of different debts and loans can be consolidated. The use of a debt consolidation loan can differ from providers so contact your provider to understand more about their debt consolidation loans.

We have some basic criteria which you’ll have to satisfy before we can consider your application:

• Aged 21 to 75
• Have been a UK resident for at least three years
• Have an annual income of at least £15,000
• Have a personal bank account in the UK

Of course — you have the right to pay a personal loan back early or make an additional monthly repayment under the Consumer Credit Act. But it’s important to know that this may be subject to an early repayment charge.

To discuss your options with a member of our team, please contact us. If you have taken out a loan with us on or after 13th December 2021, you can also log in to your customer portal to contact us: https://myloan.shawbrook.co.uk/.

If you get approved for a loan from Shawbrook, you'll need to sign a loan agreement. For most new loan accounts, this will be a Fixed Sum Loan Agreement, which means it allows you to borrow a fixed amount over a fixed term at a fixed rate of interest.

The agreement sets out the terms and conditions which relate to your loan, so it's really important to read and and ask us any questions if there is anything you don’t understand before signing the agreement. You'll also get a document called Written Adequate Explanations that will highlight the key features of your agreement and help you understand the agreement in a bit more detail.

If you want to see what these documents look like, you can click the links below. Just keep in mind that the actual documents you receive might look different based on your type of loan and when you applied. If you already have a loan with Shawbrook but can't find your agreement, just reach out to us and we can send you another copy.

• View an example of our Fixed Sum Loan Agreement
• View an example of our Written Adequate Explanation

The loan agreement you'll get after you apply will have all the details that are unique to your loan. The examples above are just to give you an idea of what these documents might look like.