Credit card debt can be difficult to reduce when interest continues to accrue and the minimum payment changes each month. A fixed-term loan replaces several revolving balances with one fixed monthly repayment and a stated end date. Updraft helps people pay off credit card debt by combining eligible card and overdraft balances into one fixed-rate loan, subject to affordability and eligibility checks.
The main benefit is predictability. For example, borrowing £5,000 over 36 months means repaying the capital at an average of £138.89 per month before interest and any arrangement fee. The actual repayment and total amount repayable depend on the rate, term and lender’s representative example. Compare these figures with your cards’ interest costs, and read this practical guide to paying off card debt before applying.
A loan only makes financial sense when its total cost is lower than continuing with the cards, and when the cards are cleared rather than left available for further spending. Check the interest rate or APR, arrangement fee, monthly payment, total amount repayable and whether early repayment charges apply. Also choose a term that fits your budget: a longer term lowers the monthly payment but usually increases the total interest.
Lenders increasingly use soft searches and affordability checks based on income and spending, rather than relying on a credit score alone. Digital tools can also bring connected balances into one view, estimate daily interest costs and show how different repayment orders affect the payoff date. These features are useful for comparing a fixed-term loan with alternatives such as a balance transfer, provided you check fees, promotional end dates and the risk of adding new card spending.
A fixed-term loan is not a cure for unaffordable borrowing. Before proceeding, make a realistic budget for the repayment and keep enough money for essential bills. If you are already missing payments or struggling to meet basic costs, speak to an organisation such as StepChange, National Debtline, Citizens Advice or MoneyHelper before taking further credit.