Turn multiple bills into one simple monthly payment with debt consolidation.

Save money on interest. Get out of debt faster.

Got too many payments to keep track of? Consolidating your debt could make your life a lot easier by putting it all in one place. Use this guide to learn how consolidation can free up your budget, what types of debt you can consolidate and what to consider before you take it on.

Laurel Road Personal Loans

Our top pick: Laurel Road Personal Loans

Get a personalized rate offer through a quick online application. Recommended for people with annual income of $60K+ and debt of less than 40% of their income.

  • Min. Credit Score Required: 680
  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $45,000
  • Starting APR: 5.5%
  • Loan Term: 3, 4 or 5 years
  • Rate discounts for autopay
  • No prepayment fees

    More debt consolidation loan options to compare

    Rates last updated November 24th, 2017

    Reveal your potential loan offers and rates

    Answer two quick questions to filter the loan offers and get the best one for you.

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    Select your credit score range

    I don't know my credit score

    Finally, select where you live.

    To get your credit score:

    Experian logo

    Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR Requirements
    Laurel Road Personal Loans
    Get a personal loan with no application or origination fees and a rate discount for autopay.
    680
    $45,000
    From 5.5% (fixed)
    Must be a US citizen or permanent resident with a valid I-551 card
    Even Financial Personal Loans
    Get connected to the best loan offers instantly from top online consumer lenders.
    580
    $100,000
    From 4.99% (fixed)
    Must have a minimum credit score of 580+. Must be 18+ years old and be an American citizen or permanent resident.
    Prosper Personal Loan
    Borrow only what you need for debt consolidation, home improvements, special occasions and more — with APRs based on your credit score.
    640
    $35,000
    From 5.99% (fixed)
    Must be 18+ years old, an American citizen or US permanent resident and have a 640+ credit score.
    SoFi Personal Loan Fixed Rate (with Autopay)
    Borrow up to $100,000 with a competitive APR and no fees.
    Good to excellent credit
    $100,000
    From 5.49% (fixed)
    You must be a U.S. citizen or permanent resident, and 18 years or older.
    LendingPoint Personal Loans
    Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
    600
    $25,000
    From 15.49% (fixed)
    Must have a fair credit score of 600 or better and verifiable income. Must live in a state where LendingPoint services.
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    From 5.99% (fixed)
    You must be over 18 years of age, a permanent resident of the US or an American citizen and have a steady source of income.

    Compare up to 4 providers

    Barclaycard Arrival Plus® World Elite Mastercard®

    Our top pick: Barclaycard Arrival Plus™ World Elite MasterCard®

    Earn 40,000 bonus miles and enjoy the current 0% APR for 12 months

    • Recommended credit score: 720 or higher
    • Bonus sign-up points: 40,000 if you spend $3,000 in the first 90 days
    • Annual fee: $89, waived the first year
    • Purchase APR: 16.99%, 20.99% or 23.99% variable
    • Intro balance transfer: 0% for 12 months

      More balance transfer credit card options to compare

      Rates last updated November 24th, 2017
      Name Product Product Description Intro APR for Balance Transfer APR for Purchases ( Purchase Rate ) Annual fee
      Barclaycard Arrival Plus® World Elite Mastercard®
      Enjoy 40000 bonus miles after you spend $3,000 on purchases in the first 90 days — that's enough to redeem for a $400 travel statement credit toward an eligible travel purchase.
      0% Intro APR for 12 months (with whichever is greater: $5 or 3% balance transfer fee)
      16.99%, 20.99% or 23.99% variable
      $0 annual fee for the first year ($89 thereafter)
      Barclaycard CashForward™ World Mastercard®
      Get a $200 cash rewards bonus after you spend $1,000 in purchases in the first 90 days after account opening.
      0% Intro APR for 15 months (with whichever is greater: $5 or 3% balance transfer fee)
      15.99%, 20.99% or 23.99% variable
      $0

      Have we missed anything in the comparison table? Tell us

      Compare up to 4 providers

      National Debt Relief

      Our top pick: National Debt Relief

      Get back on your feet with a top-rated debt relief company that works with multiple types of debt.

      • 100% money-back guarantee.
      • Works with student loan debt.
      • Professional and personal customer service.
      • Accredited by the Better Business Bureau.

        More debt settlement options to compare

        Rates last updated November 24th, 2017
        Unfortunately, none of the short term loan providers currently offer loans in your state. Learn more about short term loans in your state to find an alternative.
        Name Product Product Description Costs Requirements
        Get back on your feet with a top-rated debt relief company that works with multiple types of debt.
        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.
        This A+ BBB-rated service offers free consultations to lower your monthly payments help you get out of debt faster.
        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.

        Compare up to 4 providers

        What is debt consolidation?

        Debt consolidation is a way to combine multiple credit accounts into one, often at lower rates. One company, one monthly repayment: no more wondering who to pay first.

        How does this work? It depends on what kind of debt you’re consolidating and what method you choose. One common way to do this is to take out a debt consolidation loan. Here, you take out a term loan in the amount of your total debt, which you use to pay off your lenders.

        For people with lots of credit card debt, a balance transfer credit card might make sense. Here, you can move balances from multiple credit cards onto one new card with a lower interest rate.

        You have are lots of other options for consolidating your debt, which we explore in more detail below.

        Seven main ways to consolidate your debt

        OptionBest for…How it works
        Personal loanPaying off debt over several years at a low interest rateTypically borrow up to $50,000. Your funds will go to you to pay off your credit account balances, and then you’ll pay one monthly payment on the new loan.
        Balance transfer credit cardPeople with existing credit card debt who want to pay it off quickly within a yearMove all of your debt to one credit card usually with an introductory APR of 0% for one year.
        Debt reliefThose who’ve exhausted all other optionsA company will negotiate with your creditors to lower your interest and monthly repayments (debt management) or allow you to pay it off in one lump sum less than your original balance (debt settlement).
        Secured loansHome or car ownersGet lower interest rates 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)Home ownersTake out a low-interest rate line of credit by using your home equity as collateral.
        Student loan consolidationPeople with student loan debt onlyUse a lender that specializes in student loans to consolidate student loans.
        401(k) loanPeople who’ve save up retirement funds in a 401(k) accountBorrow against 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.

        Should I consolidate my debt?

        Debt consolidation is not for everyone. Done under the wrong circumstances and 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 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 an introductory 0% interest.
        • You can afford payments. Your 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: Spending more than you have.

        Look at other options if…

        • You don’t have much debt. If you can pay it off in a year or six months, consolidating your debt won’t do much for you.
        • 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.

        Calculate how much you could save by consolidating your debt

        Use the debt consolidation calculator below to see estimates of how much you could save and what your monthly payment could be.To use this calculator, simply:

        1. Input your outstanding balances and the APRs for each credit account you’d like to consolidate.
        2. Click ‘Add card’.
        3. Add as many balances as you’d like.
        4. Choose your desired repayment term from the dropdown menu.
        5. Click ‘Next’ if you’re ready to apply now.

        (Estimates are calculated by Even Financial, a loan matching service.)

        Compare personal loans for debt consolidation

        A selection of top personal loan lenders

        Use this table to compare the interest rates, loan amounts and eligibility requirements of top online lenders.

        Rates last updated November 24th, 2017

        Reveal your potential loan offers and rates

        Answer two quick questions to filter the loan offers and get the best one for you.

        Let's get started

        Select your credit score range

        I don't know my credit score

        Finally, select where you live.

        To get your credit score:

        Experian logo

        Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

        Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
        Name Product Product Description Min. Credit Score Max. Loan Amount APR Requirements
        Laurel Road Personal Loans
        Get a personal loan with no application or origination fees and a rate discount for autopay.
        680
        $45,000
        From 5.5% (fixed)
        Must be a US citizen or permanent resident with a valid I-551 card
        Even Financial Personal Loans
        Get connected to the best loan offers instantly from top online consumer lenders.
        580
        $100,000
        From 4.99% (fixed)
        Must have a minimum credit score of 580+. Must be 18+ years old and be an American citizen or permanent resident.
        Prosper Personal Loan
        Borrow only what you need for debt consolidation, home improvements, special occasions and more — with APRs based on your credit score.
        640
        $35,000
        From 5.99% (fixed)
        Must be 18+ years old, an American citizen or US permanent resident and have a 640+ credit score.
        SoFi Personal Loan Fixed Rate (with Autopay)
        Borrow up to $100,000 with a competitive APR and no fees.
        Good to excellent credit
        $100,000
        From 5.49% (fixed)
        You must be a U.S. citizen or permanent resident, and 18 years or older.
        LendingPoint Personal Loans
        Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
        600
        $25,000
        From 15.49% (fixed)
        Must have a fair credit score of 600 or better and verifiable income. Must live in a state where LendingPoint services.
        LendingClub Personal Loan
        A peer-to-peer lender offering fair rates based on your credit score.
        660
        $40,000
        From 5.99% (fixed)
        You must be over 18 years of age, a permanent resident of the US or an American citizen and have a steady source of income.

        Compare up to 4 providers

        A selection of brokers

        One way to make sure you’re getting the best rate is to let a broker find a competitive rate for you.

        Rates last updated November 24th, 2017
        Name Product Minimum Credit Score Max. Loan Amount APR Product Description
        Even Financial Personal Loans
        580
        $100,000
        From 4.99% (fixed)
        Get connected to the best loan offers instantly from top online consumer lenders.
        LendingTree Personal Loan
        640
        $35,000
        From (fixed)
        Receive up to five loan offers in just minutes through LendingTree's simple online application process.
        Credible Personal Loans
        Good to excellent credit
        $50,000
        From 4.99% (fixed)
        Get personalized rates in minutes and then choose a loan offer from several top online lenders.
        Zippyloan Personal Loans
        Varies by lender
        $15,000
        From (variable)
        Apply with Zippyloan to be considered by over 100 lenders, all offering multiple loan options to suit your needs.

        Compare up to 4 providers

        Getting a personal loan to consolidate debt? Compare these four important factors first

        Finding the right loan to consolidate your debt requires you to compare different features of personal loans for debt consolidation. You can consider the following:

        • Eligibility. Many lenders provide debt consolidation loans only to individuals with good or excellent credit scores. You usually have to meet additional eligibility criteria such as a low debt-to-income ratio, a minimum annual income and minimum length of credit history.
        • Interest. Loans come with interest, which lenders commonly advertise as annual percentage rate (APR). Bear in mind that even a seemingly small difference in percentage can have a significant effect on the total interest payable, especially if you’re borrowing a large sum. For this reason, be sure to find a low-interest personal loan. To save money on interest after you’ve taken out a loan, you can pay it off early.
        • Fees. Prepare to pay fees in different forms. Examples include loan establishment fees, late fees and prepayment penalties.
        • Loan term. How long you take to repay your loan contributes to how much you pay as interest. While a longer loan term would have lower payments, it would also have you paying more interest.

        Using a loan to consolidate your debt

        Watch the video above or read the list below for ways to get a better rate when consolidating your debt with a loan.

        1. Shop around. And don’t just look at local banks. Online lenders can offer lower rates, faster application processing and even peer-to-peer lending.
        2. Know your credit score and review your credit report. Generally, you need a credit score of 680 or higher to get the best deal on a loan. Check your credit report to make sure there aren’t errors that are hurting your credit score and getting in your way.
        3. Pay down your debt. Try to keep your debt-to-income ratio under 20% to get the best rates and terms.
        4. Get pre-approved. Pre-approval allows you to see how much you can borrow and approximate your interest rate before committing to an offer. It’s also a good way to make sure you meet a lender’s eligibility requirements.
        5. Apply only for what you need. Asking for more than you need can land you with a higher APR.

        What kinds of debt can I consolidate?

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

        • Credit card debt. Having multiple credit cards requires that you keep track of making timely payments towards 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.
        • Private student loans. While consolidation of federal student loans isn’t common, you can usually consolidate private student loans.
        • Business loan debt.Some business lenders offer 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 it 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.

        Should I use my savings to pay off my debt?

        It might be tempting to use your savings to pay off your debts: After all, it’s money that you can easily access without any immediate financial repercussions. It’s not always a good idea though. Ask yourself these questions before you empty out your savings account.

        Do I have enough emergency funds? As a general rule of thumb, you should always have enough money to carry you for three to six months if misfortune strikes. If you only have at least three months of savings, it could be risky to use those funds to pay off your debt.

        How do my investment accounts and debt interest rates compare? If your debt’s interest rate is higher, it could be worth it to use your to pay off your debt — you’re losing more money than you’re gaining.

        Will I have to pay any penalty fees? Many retirement accounts come with early withdrawal fees — typically around 10% — that could make it not worth taking out your savings. If you have an IRA of $100,000 with a 1.06% APY and $95,000 in credit card debt, you wouldn’t even have enough money to pay off your credit card debt in full after the early withdrawal penalty.

        Balance transfer credit card vs. debt consolidation loan

        A balance transfer credit card could be an option for paying off debt, but a 0% introductory APR doesn’t always mean it’s your best option. Here’s how balance transfer credit cards compare to debt consolidation loans:

        Balance transfer credit cardDebt consolidation loan
        APR0% intro APR on transferred debt, typically 15.99% to 25.99% on new purchasesAs low as 3.49% APR throughout entire loan term
        Payoff timeIntro period is typically 1 year, after which your APR will revert to the purchase rateTypically 3-7 years
        FeesTypically 3-5% of the transferred debt balance as a one-time balance transfer feeUsually no upfront fees, some lenders charge an origination fees of 1-3% of the loan amount
        Impact on credit scoreShort-term drop in credit score because of hard inquiry. Potential increase in credit score over time as long as you keep your other credit cards open to maintain a low credit utilization ratio.Short-term drop in credit score because of hard inquiry. Likely increase in credit score since your balances on other credit accounts will be paid off with the loan.

        Bottom line: A balance transfer credit card could be a suitable way to consolidate debt if you’re certain you’ll pay off your consolidated balance within a year. If you need more time, a debt consolidation loan could be a better deal because the interest rate is lower. Keep in mind that getting a balance transfer credit card will add another account to your credit utilization ratio, so you’ll want to consider the limit you’re approved for. On the other hand, debt consolidation loans won’t be added to your credit utilization ratio.

        How will debt consolidation affect my credit score?

        In the short-term debt consolidation may lower your score, but in the long-term it could raise your score.

        • Creditors pull a hard credit check when you take out a new loan or credit card, which temporarily lowers your credit score. Getting a balance transfer credit card can cause your score to dip even more, as having a high balance on a single credit card could hurt your score. Your credit score isn’t entirely safe if you use a debt relief company either. Even if it successfully negotiates a lower balance and better rates, your creditor might report bad debt, which hurts your credit score.
        • Using a debt consolidation loan might a better choice for someone concerned about their credit score. But no matter which method you choose, remember: Less debt means better credit. If debt consolidation can help you reduce your debt, it will ultimately help your credit score.

        Four things to avoid when consolidating debt

        • 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.
        • Carefree spending
          Identify the problem that got you into debt in the first place. If it was simply a lack of control, you should 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 cover your $10,000 worth of debt, right? Wrong. What you forgot to consider is your origination fee (typically around 5%) that comes with your loan. So, 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 is typically unfavorable.

        Consolidating debt with bad credit

        Debt consolidation with bad credit is tricky — but not impossible. You might have to go off the beaten path to find one that helps more than it hurts.

        Here are just a few of your options:

        • Peer-to-peer lenders. True, these lending services do have credit score cutoffs, but they tend to be lower than what you’ll find at a bank.
        • Credit unions. Nonprofit financial institutions, credit unions also have lower credit requirements than for-profit lenders.
        • Secured loans. Get more favorable terms on your debt consolidation loan by putting up collateral.
        • Applying with a cosigner. Having a friend or relative with good credit back your loan makes you less of a risk to lenders and could get you a better deal.
        • Consider credit counseling. Some nonprofits designed to help people get out of debt offer counseling. They can even negotiate with lenders — though you might have to pay them a fee.

        No matter where you go, getting a low rate without a credit score of at least 600 is challenging. It might be worth taking steps to improve your credit score before applying for a debt consolidation loan.

        How to request a lower interest rate

        In addition to consolidating multiple debts into one, you could ask for a lower rate with your current lender. You can sometimes get a lower rate if your credit score has improved and you’ve made your payments on time.

        To request a lower rate, call your lender. Move up the chain of command until you’re speaking to someone who can actually give you a lower interest rate — this might even be the president. You can generally do this by asking to speak to a supervisor.

        Make an argument for yourself: Be sure to point out how much business they would lose if you were to consolidate your loan with another institution. If your call is a success, your lender will review your credit and payment history to come with another interest rate.

        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.

        www.daveramsey.com

        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.

        www.suzeorman.com

        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.

        www.farnoosh.tv

        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.

        Now it’s up to you to make a budget and stick to it so that you can pay off your debt as fast as possible.

        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 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. Read on to learn what steps you can take based on your credit score.

        Debt protection for servicemembers

        If you or your spouse is an active member of the military, the Servicemembers Civil Relief Act (SCRA) of 2003 provides you with certain protections to keep you from struggling with debt such as:

        • Capping interest rates on credit cards, mortgages and loans at 6%.
        • Protection from home foreclosure.
        • The ability to cancel auto leases if called to active duty.

        Some eligibility restrictions apply, however. Read more about the SCRA on the Department of Justice’s website.

        Managing debt with debt relief

        When your debt becomes unmanageable and a balance transfer credit card or consolidation loan just won’t cut it, debt relief could help you get back on the right track. It’s primarily designed to help people suffering financial hardship — a divorce, a death, unemployment, extreme overspending — so bad that it makes bankruptcy look attractive. The most common types of debt relief are:

        • Debt settlement. A debt settlement company negotiates with your creditors to lower the amount you owe in exchange for one-time payment.
        • Debt management. A credit counseling agency negotiates with your creditors to lower your interest and monthly fees. You continue to pay off your debts through the credit counseling agency with one monthly payment, which it uses to pay your creditors.
        • Credit counseling. In addition to debt management, credit counseling agencies provide services like workshops and other educational resources for helping you get out of debt.
        • Debt settlement risks

          Debt settlement is extremely risky and not always a better option than filing for bankruptcy — it can sometimes do the same amount of damage to your credit score and isn’t guaranteed to work. If you stop paying off your creditors while you’re enrolled in a debt relief program (most people do) you could get sued.

          If you fail to complete the program (most people don’t), you might have to file for bankruptcy anyway. On top of this, settled debt is usually considered taxable income. Once you factor in fees and interest that accumulated while you were in the program, you might only end up saving around 10%.

        • Aren’t debt relief companies a scam?

          Some are, but not all of them. The government has done a decent job of cracking down on scammers since 2010. It’s easier to find a legit credit counseling agency than any other type of debt relief — they’re mostly non-profit and the Department of Justice has already done most of the work for you by compiling a government-approved list.

          Debt settlement companies are a bit tricker, however. Stay away from any debt settlement company that charges fees before they provide a service, guarantees it can settle your debt or says it can stop calls from collection agencies.

        Negotiating your own debt relief

        If you have the stomach for difficult conversations, you might want to take up negotiating your debt on your own. To do this, call up the people you owe money to, tell them that you cannot pay your balance in the time you have and then ask for better repayment terms or even a reduction on what you owe. It can be a difficult conversation, but stay strong and keep asking until you get them to agree to something you can afford.

        If you’re unable to renegotiate your debt, you may have to declare bankruptcy. If you are going to do this, hire a lawyer to help you out in the process, and know that your credit and ability to borrow will be affected for many years.

        How to pay off debt: Methods by credit score

        It’s easy to get into a situation where you’ve accumulated more debt than you can easily pay off. The key to paying off debt is finding a way to lower your monthly payments or extend the time you have to pay them off. You’ll also need to adjust your spending habits so that new payments don’t push you further into debt.

        For people with good or excellent credit

        If you have a good or excellent credit score of 720 or more, consider a balance transfer credit card. These credit cards allow you to move the debt you owe on one credit card to another one with a lower or no APR for a set period of time. They can help you pay off your debt faster and with less interest.

        Still, even if you’re approved for balance transfer card offering a 0% APR promo, you’ll likely pay a fee for transferring your balance — often 3% or more of the balance you transfer.

        If your debts total more than $10,000, you may want to apply for a debt consolidation loan. These loans are generally available to people with good or excellent credit and can help you consolidate credit card balances, medical bills and more into one monthly payment, ideally at a lower overall APR than you’re paying across each bill.

        For people with bad or fair credit

        If you have bad credit or even fair credit, you may not be approved for a loan to consolidate debt. It might be that a lender thinks your debt-to-income ratio is too high, whereby they’re worried that at least half of your income will go to paying off debt. Lenders often don’t lend to people in these situations. But you can still find strategies to pay off your debt if you have bad or fair credit.

        avalanche method vs. snowball method: Which is best?

        Among debt-related forums, you’ll see many strategies for paying down your debt. The most widely discussed are the avalanche method and the snowball method. These methods are designed to help you direct your available budget strategically depending on what you value most: saving time and money overall or simplifying your finances over quick wins.

        Say you have owe $500 on a payday loan with a 300% interest rate, $200 on a credit card with a 25% interest rate and $10,000 in student loans at a 7% interest rate. How you’d tackle this debt depends on the method you choose.

        The avalanche method

        With the avalanche method — also called the debt-stacking method — you pay off your highest interest debts first. In general, if you don’t know what your highest-interest rate debt is, it’s usually the one whose full balance is due soonest.

        Here, you’d start with your payday loan. Once you’ve satisfied that debt, you’d move to your credit card debt and finally your student debts. Because they’re due in two weeks’ time, payday loans carry the highest interest rates, while student loans get stretched over years, making them a better option to hold on to.

        The snowball method

        With the snowball method, you’d pay off your smallest loan amounts first.

        Using our example, you’d pay off your credit card first, then your payday loan and then your student debt.

        So, which strategy is best?

        There’s no “best” — especially when it comes to climbing out from under debt. You’ll first want to figure out might motivate you: seeing quick wins as you pay off accounts with the snowball method or calculating how much you’ve saved on unnecessary interest with the avalanche method.

        In the end, your best strategy might be a combination of the two strategies. Many of us are motivated by seeing results, saving money and feeling good about it. And there’s no reason you can’t pick and choose to find a happy medium that works for you and your personal bottom line.

        You have two other ways to pay off your debt: building your credit by climbing the credit ladder, or renegotiating your debt — either on your own or through an agency.

        To try building your credit to the point where you’ll qualify for a debt consolidation loan or a balance transfer card, consider starting with a secured credit card. With these cards, you put down a security deposit, which then becomes your credit limit. If you focus on secured cards that report to the three main credit bureaus, your responsible spending and on-time payments add positive info to your credit history. And you just might build your credit to the point where you’ll qualify for an unsecured card or a solid personal loan.

        Our picks for best secured credit cards of 2017

        Staying out of debt

        Getting rid of your debt is only part of getting on the path to a debt-free life. Identify what it was that got you into debt in the first place. Maybe you were overspending. Perhaps you were unprepared for a medical emergency or didn’t have savings to make up for a job loss.

        Whatever it was, take steps to address this issue so it doesn’t happen again. Making a budget is a great way to keep track of your spending. You also might want to consider setting aside some money each month to put into a high-interest savings account or creating an online investment portfolio. Financial services like Acorn might be a good place to start by allowing you to make small-change investments.

        Frequently asked questions about debt consolidation

        Ask an Expert

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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.

          • Staff
            DanielleOctober 4, 2017Staff

            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.

            Cheers,
            Danielle

        2. Default Gravatar
          RobertSeptember 24, 2017

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

          • Staff
            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.

            Best,
            Maria

        3. Staff
          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.

          Cheers,
          Ash

        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.

          • Staff
            DanielleAugust 14, 2017Staff

            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.

            Cheers,
            Danielle

        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?

          • Staff
            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.

            Cheers,
            Harold