Several debts, and one loan promising to make it simple
Should I consolidate my debt, or just pay it off myself?
What consolidation actually does
A consolidation loan or balance transfer pays off several debts and leaves you with one. The balance is the same. What can change is the interest rate, the monthly payment and how long you pay. A lower monthly payment over more years can cost more in total, even at a lower rate — so compare the total you will pay, not the payment.
When it works
It works when the rate is clearly lower than what you pay now, the fees are small, and you have stopped adding to the debt. Then every payment does more work, and one date is easier to keep than five.
When it makes things worse
The common trap is clearing the cards with a loan and then using the cards again. Now there is a loan and new balances. If that has happened before, or if the month does not balance yet, consolidation moves the problem rather than solving it.
Doing it yourself costs nothing
Paying minimums on everything and putting every extra dollar on the highest-rate debt gets most of the benefit with no new loan, no fees and no application. Calling your card company to ask for a lower rate is free and sometimes works.
Free help exists
Nonprofit credit counselling services can look at your whole situation and may arrange a repayment plan with lower interest. Be wary of any company that charges large fees up front or promises to make debt disappear — check who regulates them where you live.
Questions people ask next
Will consolidating hurt my credit?
Applying can cause a small, temporary dip. Paying on time on one loan and keeping old balances low usually helps over time. Running the cards back up is what really hurts.
Is a balance transfer card a good idea?
It can be, if you can clear the balance before the introductory rate ends and the transfer fee is smaller than the interest you save. Read the rate that applies afterwards before you move anything.
What if I cannot get a lower rate?
Then consolidation usually is not worth it. Put your effort into the monthly numbers — what goes out and what comes in — and the highest-rate debt first.
Run it against your own numbers
Everything above is the shape of the decision. What it cannot do is use your figures. You narrow four ways out to the one that fits you, then turn it into three moves in the order they work — free, and yours to keep.
Show me which wayFree. No card, and no account to begin.
This is general information about how these decisions work, not financial, legal or tax advice. Check the numbers against your own situation before you act.