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What is debt consolidation?

Consolidating debt is the process of combining multiple debts from credit cards, high-interest loans, and other bills into one monthly payment. Debt consolidation solutions may lower your interest rate, which can help you save money on interest, lower your monthly payments, and pay down debt faster.
Debt consolidation is an increasingly common strategy that consumers are using to address high levels of credit card and other debt. Typically, consumers obtain a debt consolidation loan from a lending institution and use it to consolidate all outstanding debts into one loan. When you consolidate debt, you’re left with a single monthly payment, which is often at a lower interest rate. The result is that it’s easier to manage your outstanding debt so that you’ll be in a better position to pay it off.
When consolidating debt with a loan, borrowers have two primary options to consider: secured and unsecured debt consolidation loans. A secured loan uses some sort of property as collateral, such as your home. The collateral makes it more likely you’ll qualify for the debt consolidation loan and get it at a lower interest rate. However, if you become unable to repay the loan, your property could be at risk. An unsecured loan doesn’t use any of your property, so you don’t have to worry about losing anything if you’re unable to keep up with monthly payments. However, unsecured debt consolidation loans usually require a high credit score to qualify, something that people struggling with high levels of debt usually don’t have.
This is just one example of how you can consolidate your debt. You can see a list of the other methods below:
Option 1: Pay down the debts yourself
Option 2: Get a debt consolidation loan
Option 3: Transfer your balances
Option 4: Settle your debts
Option 5: Choose National Debt Relief
Since there are several different methods of debt relief out there, it’s important that you understand what each one does and seek out the type of help that’s right for your situation.
Get answers to your questions about consolidating debt
Can debt consolidation help me pay down debt faster?
Debt consolidation may help you lower your monthly payment or under certain circumstances decrease the amount of interest you pay, but this depends on your financial situation and your ability to make your monthly payments.
What kind of debt can I consolidate?
Whether you choose a loan or a balance transfer, you can consolidate credit cards, store cards and gas cards; high-interest loans; medical bills and more. Separately, you can also consolidate your student loan(s) by refinancing federal and private student loans into one loan with one monthly payment.
How do I consolidate credit cards?
You can consolidate your credit card debt two ways. You can transfer your other credit card balances onto one credit card with a balance transfer, or you can get a debt consolidation loan to pay off your balances.
How much can I consolidate with a private consolidation student loan?
Subject to credit approval, you can consolidate up to the aggregate amount of your education loan debt. Maximum limits may apply. The minimum consolidation loan amount is $5,000.
If I consolidate my debt, can you pay my creditors directly?
Yes, in most cases with With a debt consolidation loan, we can send funds directly to your creditors or you can receive a check in the mail to pay them off yourself. With a student consolidation loan, we will send funds directly to your current lenders. A balance transfer can also send funds to most credit card or loan companies.
What kind of interest rates can I get with a balance transfer?
A balance transfer offer has a low promotional or introductory rate. Rates can be as low as 0%, depending on the offers that are available to you.