Does debt consolidation hurt your credit?

Checking rates doesn't. Taking a loan adds a hard inquiry and a new account, which can dip your score briefly. Paying cards down usually lowers your credit utilization, which can help your score over time.

Should I close my credit cards after consolidating?

Often it's better to keep them open with a $0 balance, since closing accounts can raise your utilization and shorten your credit history. Avoid running the balances back up.

Can I consolidate debt with fair credit?

Many lenders work with fair credit, though APRs will be higher. Compare the total cost to what you pay now — consolidation only helps if it costs less or gives you a payoff plan you'll stick to.

What debts can I consolidate?

Most lenders allow credit cards, store cards, medical bills and other personal loans. Mortgages, auto loans and federal student loans generally aren't consolidated with a personal loan.

Reviewing bills calmly at a bright kitchen table

Debt consolidation

One payment. Lower rate. A real finish line.

Replace multiple high-interest credit card balances with a single fixed-rate loan — and know exactly when you'll be debt-free.

Check my consolidation rate

No impact to credit scoreSome lenders pay creditors directlyFixed APRs from 7.99%* (excellent credit & autopay)

Pay less interest

Card APRs often exceed 20%. A consolidation loan at a lower fixed rate could cut your interest cost.

Simplify your month

One due date, one payment, one lender — instead of juggling several cards.

Know your payoff date

Fixed terms from 24 to 84 months mean a clear end date from day one.

See the difference

Credit card vs. consolidation loan

High-interest credit card

Balance: $40,000
Interest rate: 23.23% APR*
Monthly payment: $968
Total amount paid: $81,282
7-year interest paid: $41,282

IllustrativeConsolidation loan

Balance: $40,000
Interest rate: 15.89% APR*
Monthly payment: $792
Total amount paid: $66,526
7-year interest paid: $26,526

Estimated interest savings

$14,756

Illustrative example, both paid over the same 84-month term with fixed payments. Rates are hypothetical, not an offer. *See APR disclosure.

Try it with your numbers

Compare your options

Consolidation loan vs. balance transfer card

	Consolidation loan	Balance transfer card
Rate	Fixed APR for the life of the loan	Often 0% intro APR for 12–21 months, then a variable rate
Upfront cost	Origination fee 0%–10% (often deducted from funds)	Transfer fee, typically 3%–5% of the balance
Payoff date	Fixed: 24–84 months	None — depends on what you pay
Typical credit needed	Fair to excellent	Good to excellent
Amount	$1,000–$100,000	Limited to your card’s credit line
Best for	Larger balances and a structured plan	Balances you can clear within the intro period

Origination fees and APR math

APR includes both interest and the origination fee, so it’s the best single number for comparing offers. Here’s how a fee affects what you receive.

Example

Assumes equal monthly payments starting one month after funding and no other charges.

Loan amount: $10,000
Interest rate: 12.99%
Origination fee: 5% / $500
Amount you receive: $9,500
Monthly payment: About $337 for 36 months
Total of payments: $12,128
APR including the fee: About 16.6%

Borrow enough to cover the fee. If you need $10,000 to pay off cards and the fee is 5%, request about $10,530 so the deposit covers your balances.

Compare APR, not the interest rate. Here, a 12.99% interest rate becomes about a 16.6% APR once the 5% fee is counted, because you repay $10,000 but receive $9,500. A lower interest rate with a high fee can cost more than a slightly higher rate with no fee.

Look at total cost. Longer terms lower the monthly payment but usually increase total interest paid.

Debt payoff timelines

Illustrative: $15,000 in credit card debt. Assumed rates for example only; your rate may differ.

Scenario	Monthly payment	Time to pay off	Total paid
Credit cards (24% APR, $450/mo)	$450	4 yrs 8 mo	$25,200
Loan, 36 months at 13% APR	$505	3 yrs 0 mo	$18,195
Loan, 60 months at 15% APR	$357	5 yrs 0 mo	$21,411

Direct creditor payment options

Direct pay

Some lenders send funds straight to your card issuers at funding — fewer steps and less temptation to spend.

Deposit to your bank

Most lenders deposit funds to you. Pay each card promptly and confirm a $0 balance.

Keep paying until it posts

Make minimum payments until each payoff shows on your statement to avoid late fees.

Frequently asked questions

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