How long does debt consolidation take?
Debt consolidation has two timescales: how long it takes to set up, and how long you then spend repaying. This guide explains both in general terms, and why neither can be promised exactly.
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Two timescales: set-up and repayment
When people ask how long debt consolidation takes, they usually mean one of two things. The first is the set-up time, which is how long it takes from applying to having the old debts cleared. The second is the loan term, the number of months or years you then spend repaying the single loan. The two are completely different in scale. Set-up is often a matter of days, while the term can run for years, so it helps to treat them separately.
The timescales below are general and vary by lender and by case. They are not promises. No one can guarantee how quickly a particular application will be processed or approved.
How long from application to funds?
The set-up stage usually follows a familiar sequence. Our guide on how debt consolidation works describes each step; below is roughly how long each one tends to take in general terms.
Preparation
Totalling your debts and comparing options can take anything from an afternoon to a week or two, depending on how much you research.
Application and decision
A decision can sometimes come quickly, but may take longer if the lender needs more information or has to verify documents.
Checks and verification
Affordability, identity and income checks can add time, especially if paperwork is requested or your situation is complex.
Funds released
Once you are approved, funds may be released within a short period, sometimes a day or two, to you or directly to your creditors.
Put together, a straightforward application might complete within days, while a more complex one, particularly a secured loan, can take considerably longer. Checking your eligibility and having your documents ready tends to speed things along.
When are your old debts actually cleared?
Having the funds is not quite the end of the set-up. The money still has to reach your existing creditors and clear those balances. If the lender pays your creditors directly, this may happen quickly. If the funds come to you to settle the debts yourself, you will need to make those payments and then wait for each account to show as cleared, which can take a few days to register. It is wise to keep each account open until you have confirmed it is fully paid off, and to watch for any final interest or small residual balances.
The loan term: the long timescale
This is the long one. The term is how long you agree to take to repay the consolidation loan, commonly a few years, though it can be shorter or much longer, especially for secured borrowing. The term has a direct effect on cost: a shorter term means higher monthly payments but less total interest, while a longer term lowers the monthly payment but increases the total you repay.
Because the term shapes the total cost so strongly, it deserves as much attention as the interest rate. Use the loan repayment calculator to compare how different terms change both the monthly payment and the total repayable, and see how to compare debt consolidation loans for the full set of features to weigh up.
A quick set-up does not make a loan cheap. A loan arranged in days can still cost a great deal if it runs over a long term at a high rate. Judge a loan by its total cost, not by how fast you can get it.
What can slow a consolidation loan down?
Several things commonly hold up the set-up stage:
- Missing or incomplete documents, such as proof of income or identity.
- The lender needing to verify information or ask follow-up questions.
- A complex situation, such as self-employment or several income sources.
- Secured lending, which involves valuing and placing a charge on your property.
- Errors on your credit file that need correcting before a decision.
Can you speed the process up?
To a degree, yes. Much of the delay in a consolidation loan comes from information the lender is waiting on, so the more you have ready at the start, the smoother things tend to go. Gather recent payslips or accounts, proof of address and identity, and a full list of the debts you want to clear with their account details, before you apply. Checking your credit report in advance lets you spot and correct errors early, and applying to a lender suited to your circumstances avoids a decline that sends you back to the beginning.
If you are self-employed or applying with joint applicants, allow a little extra time, since there is simply more for the lender to verify.
If you need a solution urgently because you are falling behind, free debt charities can often help faster and more safely than rushing into new borrowing: MoneyHelper, StepChange, National Debtline and Citizens Advice.
Frequently asked questions
How quickly can I get a consolidation loan?
A straightforward unsecured application can sometimes complete within days, but this varies by lender and case and cannot be guaranteed. Secured loans typically take longer.
When are my old debts actually cleared?
Once funds are released, your creditors are paid either directly by the lender or by you. It can take a few days for each account to show as settled, so keep them open until you have confirmed they are fully paid.
How long will I be repaying?
That depends on the term you agree, often a few years and sometimes longer. A longer term lowers the monthly payment but increases the total interest you pay.
Why is my application taking so long?
Common causes include missing documents, extra checks, a complex income, secured lending or errors on your credit file. Having paperwork ready and checking your credit report first can help.
Related pages
See how the term changes the cost
Compare the same loan over shorter and longer terms. All figures are illustrative examples.