Debt consolidation may be a good option if you’re trying to pay off high-interest loans and credit cards and managing multiple monthly payments
Depending on your creditworthiness, you may be able to receive a lower interest rate on a debt consolidation loan than you are currently paying on your debt, saving you money on monthly payments and overall interest.
With debt consolidation loans, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards. You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years. The interest rate depends on your credit profile, and it usually doesn’t change during the life of the loan.
Another option for lowering your monthly payment is with a long loan term. However, a longer loan term means you may pay more interest total. Debt consolidation is only one of several strategies for paying off debt. Debt consolidation won’t work if you have too much debt or haven’t fixed underlying spending issues.
Read more about how debt consolidation loans works.