Section A·ConsolidationConsultation draft v0.1
Debt consolidation rationale
A consolidation file must show that securing the debt leaves the client better off overall, or that a clearly stated non-financial reason justifies the extra cost.
9 required items · 5 red flags · Rules A1–A9 in the rule packRequired evidence
A list of every debt being consolidated: lender, balance, rate, monthly payment and remaining term
Link to A1Rule A1 · field · severity gaps_to_fix
Total cost to repay each debt on its current terms, against total cost once secured
Link to A2Rule A2 · calculated · severity gaps_to_fix
The break-even term: the longest secured term at which consolidation still costs the client no more than keeping the debts
Link to A3Rule A3 · calculated · severity gaps_to_fix
The chosen term, and the reason for any term beyond break-even
Link to A4Rule A4 · field · severity gaps_to_fix
Which debts were left out, and why (for example 0% balances or debts near the end of their term)
Link to A5Rule A5 · field · severity meets_with_notes
Alternatives considered: repayment plan, debt advice charity, further advance, remortgage, doing nothing
Link to A6Rule A6 · ai_judged · severity gaps_to_fix
The risk explained to the client: unsecured debt becomes secured on their home
Link to A7Rule A7 · field · severity gaps_to_fix
What happens to the cleared credit facilities (closed, reduced, or a recorded reason they stay open)
Link to A8Rule A8 · field · severity meets_with_notes
Any sign the client is in financial difficulty, and whether free debt advice was signposted
Link to A9Rule A9 · field · severity gaps_to_fix
Red flags that need a written justification
Term extends well beyond break-even with no stated reason
Short-term or low-balance debts consolidated over 15–25 years
Repeat consolidation within five years
Payment reduction is the only stated objective
Fees added to the loan exceed the interest saved
The Specialist Lending File Standard is not legal or compliance advice and does not replace FCA rules. Information for professional intermediaries, not advice. Comment on the draft.