Current Debts
Enter your current debts below to calculate potential savings.
New Consolidation Loan
Current Situation
With Consolidation
Total Interest Savings
Over 60 months
When Debt Consolidation Makes Sense
Consolidation works when you can qualify for a loan with a significantly lower interest rate than your current debts. Credit cards averaging 18% APR consolidated into an 8-10% personal loan can save thousands in interest.
Benefits of Consolidation
- Simplify your finances with one payment instead of multiple
- Lower interest rates if your credit has improved
- Reduced total interest paid over time
- Improved cash flow with lower monthly payments (if you extend the term)
- Better credit mix, which can boost your credit score long-term
Potential Drawbacks
- Extending your loan term costs more in total interest (despite lower monthly payments)
- Hard inquiry on your credit report (temporary score dip)
- May require closing credit cards, affecting credit utilization
- If you can't change your spending habits, you'll accumulate debt again
Types of Consolidation Loans
Personal loans are the most common consolidation tool, but you have options depending on your situation and credit score.
Personal Loans
Unsecured loans from banks, credit unions, and online lenders. Rates typically 7%-36%, terms 2-7 years. Best for credit card and other high-interest debt. Compare personal loan rates.
Balance Transfer Credit Cards
Transfer high-rate credit card debt to a 0% APR card for 12-21 months. Great if you can pay off the balance before the promotion ends. Watch out for transfer fees (typically 2-5%).
Home Equity Loans
If you own your home, you can borrow against your equity at lower rates (typically 6-9%). Risk: your home is collateral, so default could mean foreclosure.