Government Debt Consolidation Loans

What Is Government Debt Consolidation?

While a number of loan providers advertise government debt consolidation, the simple fact is that these do not exist. This term is often used to claim that their consolidation services are free or official, but it may be the case that the providers still charge a fee. There is currently no such thing as a government-backed debt consolidation loan and the UK government does not promote these schemes. If you see any adverts for debt consolidation from the UK government, they should be approached with caution. They are misleading and misinformative, so further research into the lenders should be carried out before you consider applying. However, while there are no government grants for debt consolidation, there are a variety of debt solutions that have been developed by the authorities.

What Types Of Government Debt Schemes Are Available?

There are a range of debt solutions available that are backed by the government, including:

• Debt Relief Orders – this is an insolvency solution that can help people with relatively low levels of debt. An order will freeze all qualifying debt repayments for 12 months, and creditors will be unable to continue applying interest, charges or fees against the remaining amount owed.
• Bankruptcy – this is a term that many people are familiar with and refers to an insolvency solution that can give debtors a fresh start. By declaring bankruptcy, many kinds of debts can be written off, but it is also a legal status that usually lasts for a 12 month period. During this time, some of your assets may be used to pay your creditors, and once you have been discharged, any remaining debts can be written off.
• Individual Voluntary Arrangements – an IVA is a legally binding agreement between a debtor and a creditor to repay what they owe over an extended term, at a rate that is affordable for them.
• The Scottish Debt Arrangement Scheme – this solution is backed by the Scottish government and allows you to pay back what you owe by making regular monthly payments that are divided between creditors. These are typically calculated based on personal circumstances, determining what is an affordable monthly payment.

An alternative to seeking debt consolidation from the UK government is to explore the types of loans that we offer at Debt Consolidation Loans. We are specialists in consolidating debt, so we can provide a way for you to manage multiple repayments and provide peace of mind. Whether you need to consolidate credit card debt, are looking for debt consolidation loans for bad credit, or need a personal loan for debt consolidation, we may be able to help.

Before you apply online, ensure that you have thoroughly reviewed your monthly income and essential outgoings to check that you will be able to afford repayments. If you feel that you would struggle, please find an alternative or ask for impartial help from the Money Advice Service.

What Happens To Companies Advertising Government Debt Consolidation?

Despite this financial product not existing, some providers still use ‘government debt consolidation loans’ in their advertisements to mislead prospective customers. However, national regulators, like the FCA, are aware and have taken necessary steps against these companies. By penalising providers that falsely advertise government debt consolidation, misleading adverts will hopefully become less common. However, if you do see a company advertising loans that are endorsed by the government, we recommend approaching them with caution.

Choose Us To Consolidate Your Debts

At Debt Consolidation Loans, we are constantly striving to keep our customers’ best interests at heart. We take the time to personally review all applications for affordability and understand our customers’ needs, which means we can cater to people in a range of financial positions. No matter if you are self employed or need debt consolidation with past defaults, we will do everything we can to ensure you can make repayments. However, if we felt that you would struggle to comfortably make repayments, we would need to decline your application for your own wellbeing.

We offer flexibility in our repayment plans, and with our range of loans, you will be able to make payments on a pre-agreed date each month to suit you. This can give you peace of mind when it comes to managing your budget. We also pride ourselves on our transparency, so our soft search will not damage your credit rating and there are no fees for using our service.

If you would like any more information about our loans or government debt consolidation loans, check our FAQs or feel free to contact us. If you are ready to start searching for consolidation loans, please apply now.