Debt Consolidation

The tools you need to help you save money on interest and get out of debt faster.

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Too many payments keeping you down each month? Consolidating your debt could make your life a lot easier by putting it all in one place. Learn when consolidation can free up your budget, what types of debt you can consolidate and other options for getting out of debt.

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Anna Serio

Anna Serio
About the author

Anna Serio is a staff writer untangling everything you need to know about personal loans. She’s written over 500 articles on everything from debt consolidation to business loans. Before, she worked as a news editor for The Daily Star in Lebanon. She loves to eat, travel and save money.

Compare debt consolidation loan options

Our top pick: Credible Personal Loans

  • Min. Credit Score Required: Fair to excellent credit
  • Max. Loan Amount: $100,000
  • APR: 5.95% to 35.99%
  • Requirements: Have good to excellent credit, ages 18+ and be a US citizen or permanent resident.
  • Free loan connection service
  • Personalized rates in minutes
  • Secure online application

Our top pick: Credible Personal Loans

Get personalized rates in minutes and then choose a loan offer from several top online lenders.

  • Min. Credit Score Required: Fair to excellent credit
  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $100,000
  • APR: 5.95% to 35.99%
  • Requirements: Have good to excellent credit, ages 18+ and be a US citizen or permanent resident.
Updated March 28th, 2020
Name Product Filter Values APR Min. Credit Score Max. Loan Amount
Credible Personal Loans
3.99% to 35.99%
Fair to excellent credit
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Fiona Personal Loans
4.99% to 35.99%
Good to excellent credit
Get loan offers from multiple lenders at once without affecting your credit score.
Monevo Personal Loans
3.49% to 35.99%
Quickly compare multiple online lenders with competitive rates depending on your credit.
Even Financial Personal Loans
4.99% to 35.99%
Get connected to competitive loan offers instantly from top online consumer lenders.
Upgrade Personal Loans
6.98% to 35.89%
Affordable loans with two simple repayment terms and no prepayment penalties.
PenFed Credit Union Personal Loans
6.49% to 17.99%
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi Personal Loans
5.99% to 18.64%
A highly-rated lender with competitive rates, high loan amounts and no fees.

Compare up to 4 providers

What is debt consolidation?

Debt consolidation combines all of your debt into one, manageable monthly payment — often with lower interest. Debts could include credit cards, medical bills and car payments. The best way to consolidate debt depends on the amount of debt you have, your income and credit score.

7 ways to consolidate your debt

OptionBest for …How it works
Debt consolidation loanPaying off large amounts of debt over several years at a low interest rateBorrow up to $100,000 to pay off your account balances. Afterwards, you only need to pay one monthly repayment on the new loan.
Balance transfer credit cardPeople with a smaller amount of debt who want to pay it off fast and save on interestMove all of your debt to one credit card, usually with an introductory APR of 0% for 9, 12, 15, 18 or 21 months.
Debt reliefThose who’ve exhausted all other optionsA company negotiates with your creditors to lower your APR and monthly repayments (debt management) or allow you to pay it off in a lump sum less than your original balance (debt settlement).
Secured loanHome or car ownersGet a lower interest rate by borrowing against an asset, such as the equity you’ve built in your home, the value of your car or a certificate of deposit.
Home equity line of credit (HELOC)HomeownersTake out a low-interest rate line of credit by using your home equity as collateral.
Student loan consolidationPeople with student loan debtConsolidate student loans by using a lender that specializes in them.
401(k) loanPeople who’ve saved up retirement funds in a 401(k) accountBorrow from your retirement fund balance at a low interest rate. You stand to owe it all back in one lump sum if you leave your current employer.

How do balance transfers work to consolidate debt?

Balance transfer credit cards come with a 0% intro APR period and a small balance transfer fee. The intro APR period is usually around 12 months — with some as short as six months and others as long as 21 months. If you have high-interest credit card debt that you can afford to pay off in a year, a balance transfer is a great option. You’ll typically need good or excellent credit to qualify.

Our pick for balance transfers

Citi Simplicity® Card

  • No Late Fees, No Penalty Rate, and No Annual Fee... Ever
  • 0% Intro APR on balance transfers for 21 months from date of first transfer. All transfers must be completed in first 4 months. After that, the variable APR will be 14.74% - 24.74%, based on your creditworthiness.
  • 0% Intro APR on purchases for 12 months from date of account opening. After that, the variable APR will be 14.74% - 24.74%, based on your creditworthiness.
  • If you transfer a balance with this offer, after your 0% Intro purchase APR expires, both new purchases and unpaid purchase balances will automatically accrue interest until all balances, including your transferred balances, are paid in full
  • There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater.
  • The standard variable APR for Citi Flex Plan is 14.74% - 24.74%, based on your creditworthiness. Citi Flex Plan offers are made available at Citi's discretion.
  • Stay protected with Citi® Quick Lock and $0 liability on unauthorized charges
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Compare balance transfer credit cards

Name Product Amount saved Balance transfer APR Balance transfer fee Recommended minimum credit score Filter values
Citi Simplicity® Card
0% intro for the first 21 months (then 14.74% to 24.74% variable)
$5 or 5% of the transaction, whichever is greater
With an intro APR of 21 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.
Citi® Diamond Preferred® Card
0% intro for the first 21 months (then 13.74% to 23.74% variable)
$5 or 5% of the transaction, whichever is greater
Get one of the best balance transfer intro APR promotions available. Plus, access Citi Entertainment℠ to purchase tickets to concerts, sporting events, dining experiences and more.
Citi® Double Cash Card
0% intro for the first 18 months (then 13.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
This one of the most valuable flat cashback cards. It comes with 2% cash back (1% when you buy plus 1% when you pay) and 18 months months to pay off transfers.
Blue Cash Everyday® Card from American Express
0% intro for the first 15 months (then 12.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & fees
Citi Rewards+℠ Card
0% intro for the first 15 months (then 13.49% to 23.49% variable)
$5 or 3% of the transaction, whichever is greater
Get rewards on gas and groceries with no annual fee. Ideal for everyday use, it's the only card that rounds purchases up to the nearest 10 points.

Compare up to 4 providers

What’s the difference between consolidation loans and balance transfers?

Debt consolidation loans are usually through a bank or financial institution, and usually can cover larger debts. Repayment term range between three and seven years.

On the other hand, you can transfer multiple debts onto a credit card that can offer 0% APR between six and 18 months. You have as long as you need to pay off this debt, however, the APRs after the introductory period are often high.

Differences between debt consolidation loans and balance transfers

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Should I consolidate my debt?

Debt consolidation loans and balance transfer credit cards are not for everyone. When done under the wrong circumstances, it could hurt your finances more than it helps.

Consider consolidating your debt if …

  • Your debt is less than half your income. This is a manageable amount that you can pay off with debt consolidation.
  • You have good credit. Good enough to qualify for a low-interest loan or balance transfer credit card with a 0% interest introductory period.
  • You can afford payments. You have enough reliable cash flow to cover the cost of a new loan.
  • You have a plan to curb spending. Debt consolidation can’t fix the underlying problem of spending more than you have if that’s the source of your debt.

Look at other options if …

  • Your debt is more than half your income. If you’re in too deep, another loan or credit card could make things worse. You might want to try a debt settlement company instead.
  • You’re facing financial hardship. Losing your job, an expensive divorce and other personal tragedies can send you into a debt spiral. In these situations, a consolidation loan often can’t help much.
  • You have poor credit. You’ll likely have trouble qualifying for a debt consolidation loan or balance transfer credit card with rates low enough to make it a smart financial move.
Strategies for beating debt based on how much you owe

What kinds of debt can I consolidate?

Understanding what types of debt you can consolidate is the first step toward deciding what consolidation options you might want to consider — if at all. People generally consolidate these kinds of debts:

  • Credit card debt. Having multiple credit cards requires that you keep track of making timely payments on each, which can be cumbersome. Many credit cards also charge noticeably high APRs.
  • Personal loans. If you have multiple personal loans, you can think about bringing them under a single umbrella. Depending on your existing financial situation and creditworthiness, you may qualify for a more competitive interest rate on a debt consolidation loan.
  • Student loans. You can consolidate federal student loans through the government or take out a personal loan to consolidate private student loans, federal or both. If you have student debt, you also might want to look into refinancing, which often comes with a consolidation option.
  • Business loan debt. Some business lenders offer business debt consolidation loans as well to help you improve your cash flow by simplifying multiple payments into one.
  • Medical bills. Just one quick trip to the hospital can land you with a mountain of medical bills that’s difficult to keep track of — let alone afford. Taking out a loan to pay them off can make your payments more reasonable in the short term.
  • Retail credit cards. The discounts and rewards are great, but get too many and it can be difficult to keep track of what you owe and which payments to prioritize.
  • Lines of credit. Reduce the amount you owe on multiple lines of credit by paying them off with a fixed-term loan.
  • Tax debt. Owe back taxes? Consider taking out a debt consolidation loan to pay them off instead of an IRS installment agreement. Loans tend to have more flexible terms than installment agreements and if you have good credit, interest could be a lot more affordable.

Compare debt consolidation options now

How debt consolidation could affect my credit score

In the short term, consolidating your debt could lower your credit score. When you take out a new loan or credit card, creditors do a hard pull on your credit that temporarily lowers your score. However, if it helps you pay off your debt faster and make on-time payments, your score could be better off in the long run.

How debt consolidation affects my credit score

4 things to avoid when consolidating debt

  • Carefree spending.
    Identify the problem that got you into debt in the first place. If it was simply a lack of control, you may want to take advantage of a secured credit card that will only allow you to spend what you’ve deposited on the card. By doing this, you’ll learn how to responsibly manage money within your means, and you’ll improve your credit score with timely payments.
  • Forgetting origination costs of a personal loan.
    When you take out a $10,000 loan, you probably think it is going to cover your $10,000 worth of debt, right? Wrong. What you forget to consider is the origination fee — typically between 3% and 5% — that comes with your loan. When you’re applying for a loan to consolidate your debt, keep this in mind so you can fully consolidate your debt.
  • Consolidating the wrong debts.
    Don’t bother consolidating debts that have low interest rates or low balances just for the sake of having one convenient monthly payment. It might seem appealing to have a 0% interest rate during the promotional period, but if you can’t pay off the full balance of what you’ve consolidated, you’ll revert to the normal interest rate – which can be unfavorable.
  • Costly debt settlement programs.
    With so many financial tools available to consolidate debt, debt settlement programs should be a last resort. It may seem like they’re helping, but they could destroy your credit. Sure, they will eventually get to settling your credit, but that is only when the creditors are desperate enough to settle for a large sum. Don’t be tricked by the lower payments they offer you in exchange for an uphill battle with your credit score.

Common misconceptions about debt consolidation

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Debt advice from your favorite personal finance experts

Dave Ramsey

You get out of debt by changing your habits. Commit to getting on a written game plan and sticking to it.

Suze Orman

If you are truly serious about getting rid of the credit card debt you will find ways to scale back on your spending.

Farnoosh Torabi

If you choose to work through a debt settlement firm, do your homework. Yes, they will negotiate on your behalf, but you may end up paying hefty fees for the service.

What happens after I consolidate my debt?

You could find yourself in two scenarios after getting your debt consolidation loan:

  • You’re entrusted with paying off your debt. Your lender has just deposited your loan into your account and now it’s up to you to pay off your debt. You can either pay it off all at once or continue to make payments if there are steep prepayment fees. This is generally only an option for people with perfect credit, however.
  • You only have to worry about paying your new loan. Your lender has asked for your debt payment information so that they can handle the payments themselves. This situation is far more common. It’s easier for you, it’s available to a wider range of credit scores and you won’t be tempted to spend some of your loan on, say, a vacation.

What can I do if I’m denied?

Getting denied for a debt consolidation loan or balance transfer credit card can happen for a variety of reasons. The first and most important thing to do is figure out why you were declined by contacting your lender — many will tell you without prompting. Poor credit score? Take steps to improve it. High debt-to-income ratio? Try making a budget to help you pay off some of your debts faster.

Before you reapply, consider getting a cosigner or look for a secured loan to make you a more viable candidate. If neither of those are possibilities, or you’re still rejected, you might want to consider debt settlement or even bankruptcy.

When to turn to debt relief

When your debt becomes unmanageable and a balance transfer credit card or consolidation loan just won’t cut it, you may want to consider turning to debt relief. Debt relief comes in several forms such debt settlement, bankruptcy, debt management, negotiation or credit counseling. Generally, debt relief is for those whose debt is over 50% of their annual income or have only a nominal chance of paying off their unsecured debts within a reasonable time frame.

Compare debt relief providers

Updated March 28th, 2020
Name Product Costs Requirements
Freedom Debt Relief
Monthly payment based on enrolled debt, no upfront fees
Must have at least $7,500 in unsecured debt and live in a serviced state.
Freedom Debt Relief is a debt settlement company that works to help people with unmanageable, unsecured debt get back on their feet.
National Debt Relief
18–25% of total enrolled debt
Must have a legitimate financial hardship which is preventing the ability to pay creditors and a minimum of $7,500 in debt.
Get back on your feet with a top-rated debt relief company that works with multiple types of debt.
American Credit Card Solutions
No upfront costs — settlement fees range from 15% to 25%, depending on your state of residence and amount of debt.
Must live in a state that American Credit Card Solutions serves, $10,000+ in unsecured debt, legitimate financial hardship which is preventing the ability to pay creditors
Overall positive customer ratings — but it's only available in 25 states.
Consolidated Credit Debt Relief
Fees regulated by client's state of residence, can range from$0 to $69 with an average monthly fee of $35. No upfront or contingency fees.
Debt must not be payday loans or secured loans.
This debt settlement alternative can help you find a path to financial freedom.
Accredited Debt Relief
Charges and fees vary by the company you're ultimately connected with
Must be at least 18 years old and a legal US resident; additional terms may apply based on services and products used.
This A+ BBB-rated service offers free consultations to lower your monthly payments help you get out of debt faster.
CuraDebt Debt Relief
20% of enrolled debt or less, no upfront fees.
Must have verifiable income and more than $10,000 in unsecured debt or tax debt — excluding payday loans.
This company claims to significantly reduce your consumer and tax debt.

Compare up to 4 providers

Compare more debt relief options

Bottom line

You don’t have to be in debt forever. There are ways to become debt free — and help to get you there. Sometimes a simple balance transfer credit card will do the trick, or perhaps you need to find help with a debt consolidation company.

If you’ve considered filing for bankruptcy, try working with a debt relief company first. You could get help lowering your debt by negotiating with your debtors.

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Frequently asked questions about debt consolidation

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9 Responses

  1. Default Gravatar
    RedDen21October 3, 2017

    Hello. I am looking for a debt consolidation loan/credit card that I can use to get a better rate and consolidate my $8,000+ debt with. But I have a slightly above 600 score with 4-7 aplications in the last year. I have been declined for just about every loan/cc I have applied for.

    • Default Gravatar
      DanielleOctober 4, 2017

      Hi there!

      Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

      I’m sorry to hear about your declined loan applications. Typically, your credit score would just be an indication whether you’d be able to get the loan that you want, but, in general, lenders would consider your application by taking into account your overall financial situation like your income, assets and even liabilities. So it’s really best to review the eligibility criteria and check with the lender your chances of approval before you send out your final application.

      Nevertheless, the above page actually has helpful guides on how you’re able to consolidate your debt. By going through the table above, you may contact a lender and check your eligibility/approval direct with them. You may also refer to this page for your other options if you’re looking at consolidating debts with a credit card.

      I hope this helps.


  2. Default Gravatar
    RobertSeptember 24, 2017

    Typically what kind of loan works best to pay off attorney fees?

    • Avatarfinder Customer Care
      MariaSeptember 24, 2017Staff

      Hey Robert,

      Thank you for your comment. You can check out our page on personal loan uses to find out what you can and cannot use a loan for with certain lenders.

      As finder is a financial comparison website providing general information, we are not permitted to provide our users with personalized financial advice.

      I hope this helps.


  3. Avatarfinder Customer Care
    AshSeptember 7, 2017Staff

    Hello Judy,

    Thank you for reaching out to us.

    This pages about the pre-approval and payday may help you in determining the legitimacy of a loan offer.

    I hope this information helps.

    Let us know if there is anything else that we may assist you with.


  4. Default Gravatar
    LorrieAugust 14, 2017

    I’m low income my husband is a vet. We need 25, 000.00 to pay off all that we owe.

    • Default Gravatar
      DanielleAugust 14, 2017

      Hi Lorrie,

      Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.

      You are on the right page. You may customize, review, and compare the offers available on the table. Once you have selected one, you may proceed by clicking the green “Go to Site” button.

      I hope this helps.


  5. Default Gravatar
    LuisJuly 27, 2017

    Where are areas I can get loans in Puerto Rico? Or Who lends to U.S Citizens who reisde out there?

    • Avatarfinder Customer Care
      HaroldJuly 27, 2017Staff

      Hi Luis,

      Thank you for your inquiry.

      While we don’t have the currnet listings for the lenders in Puerto Rico. You may want to check and search the loan options through the city nearest to your location.

      I hope this information has helped.


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