Enter your debts, then compare a consolidation loan. See your monthly savings, total interest saved, and new payoff timeline side by side.
Debt consolidation replaces multiple debt payments with a single loan at a (hopefully) lower interest rate. The goal is to reduce your monthly payment, lower total interest paid, or both.
Consolidation makes financial sense when your new consolidated rate is meaningfully lower than your current weighted average rate across all debts. If you're paying 22% APR on credit cards and can qualify for a personal loan at 10%, the math usually works in your favor.
A new loan causes a temporary dip from the hard inquiry and reduced average account age. However, lower utilization and on-time payments typically improve your score over time.
Consolidation combines debts into a new loan — you still owe 100%. Settlement negotiates a reduced payoff amount, but severely damages your credit score.
Lenders look at your credit score, income, and existing debt load. Most personal loans for consolidation require a credit score of 600+, with the best rates going to borrowers at 700+. If your score is lower, a credit union may be more flexible than a traditional bank or online lender.
Any rate below your current weighted average rate saves you money. Personal loan rates currently range from 7% to 36% depending on creditworthiness. If the best rate you're offered is still higher than your current average, consolidation won't help — focus on a payoff strategy like the avalanche method instead.