Should I choose a debt consolidation loan DMP or IVA to deal with my debts?

30 Sept 2026, 21:27
Q A Reader Asker

Should I choose a debt consolidation loan DMP or IVA to deal with my debts?

A PoundWise Team Answered by

A debt consolidation loan replaces several debts with one loan, but it may cost more overall and could put you at risk of further borrowing if repayments are unaffordable. A debt management plan (DMP) is an informal arrangement, usually with reduced payments, but creditors do not have to accept it and interest or charges may continue. An IVA is a formal, legally binding arrangement managed by an insolvency practitioner, with fees and significant consequences if it fails. Before choosing, compare the full costs and risks and seek free advice from an FCA-authorised debt adviser or a recognised charity such as StepChange or Citizens Advice.

This Q&A is editorial content produced by the PoundWise team. It does not guarantee any individual outcome.
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