The Smart Way to Consolidate Your Debt – And How We Make It Easier
26th February 2025
What is debt consolidation and how does it work?
Debt consolidation means taking out a single new loan to pay off multiple existing debts credit cards, overdrafts, or personal loans so you make one fixed monthly payment instead of several. According to StepChange, the average person seeking debt help in the UK has 6 separate creditors [Source : 3 Key Findings on UK Debt - StepChange Statistics Yearbook 2022" Published by StepChange Debt Charity on Medium]. Oakbrook Finance customers save an average of £110 per month after consolidating with OakbrookOne. The right consolidation loan can reduce both your monthly outgoings and the total interest you pay, though this depends on your individual circumstances.
How does debt consolidation work?
When you take out a debt consolidation loan, the funds are used to clear your existing debts. With most lenders, you receive the money in your account and must contact each creditor yourself to repay what you owe.
OakbrookOne works differently. Once your loan is approved, we identify your existing debts and pay your creditors directly so you never have to manage the process manually. According to our internal lending data, over 40% of OakbrookOne customers have their debts settled on the same day as their application.
The result: one fixed monthly repayment, a known end date, and no more juggling multiple balances.
Key benefits of debt consolidation
- One fixed monthly payment. Simpler budgeting, no risk of missing a creditor by mistake.
- Potentially lower interest rate. If your existing debts carry high interest (particularly credit cards), a consolidation loan at a lower rate can reduce the total cost of borrowing.
- Clear repayment timeline. Unlike revolving credit card debt, a consolidation loan has a defined term you know exactly when you'll be debt-free.
- Direct creditor settlement (OakbrookOne). We pay off your debts for you, removing the administrative burden entirely.
What to consider before consolidating
Debt consolidation is not right for everyone. Here are the key factors to weigh before applying:
You may pay more in total if you extend the term. A lower monthly payment achieved by spreading debt over a longer period can result in paying more interest overall. Always compare the total amount repayable, not just the monthly figure.
Your existing credit commitments matter. Some debts such as 0% balance transfer cards still within their promotional period may not benefit from consolidation. Check each debt individually.
Not all applicants qualify for the same rate. Lenders use affordability assessments and credit history to determine the rate you're offered. Oakbrook provides a guaranteed personalised APR at the application stage, so you know your exact rate before you commit.
Consolidation doesn't reduce the debt it restructures it. Managing your spending after consolidating is essential to avoid accumulating new debt on top of your consolidated loan.
Why OakbrookOne is different from other debt consolidation lenders
Most UK lenders approve your consolidation loan and leave the rest to you. You receive the funds, then you're responsible for contacting each creditor, making the payments, waiting for balances to clear, and confirming settlement.
OakbrookOne handles the entire process:
- We identify your existing debts using open banking and credit data.
- We contact your creditors directly and arrange settlement on your behalf.
- We pay your creditors not your bank account so the money goes where it's supposed to.
- You make one monthly repayment to Oakbrook from the agreed start date.
This process is supported by Experian ReFi™ and ClearScore Clearer integrations, which allow us to identify and settle eligible debts automatically. Over 40% of customers have their debts settled the same day they apply.
Is debt consolidation right for you?
Debt consolidation is most likely to benefit you if:
- You're managing three or more separate debts with different payment dates
- One or more of your existing debts carries a high interest rate (above 20% APR)
- You want a single, predictable monthly payment with a fixed end date
- You've been declined for a 0% balance transfer card due to your credit profile
It may be less suitable if your debts are small and already low-interest, or if you're in serious financial difficulty in which case free debt advice from StepChange or MoneyHelper may be more appropriate first.
How much could you save by consolidating?
Oakbrook Finance customers save an average of £110 per month after consolidating their debts with OakbrookOne. Annually, that's over £1,300 money that can be redirected to savings or everyday expenses.
Your actual saving depends on:
- The interest rates on your current debts
- The APR you qualify for on a consolidation loan
- The loan term you choose
Use our Loan Calculator to estimate your monthly repayment and potential saving in under two minutes. No impact on your credit score.