How consolidation works
- List your debts: balance, APR and monthly payment for each.
- Get a consolidation loan large enough to pay them off.
- Use the loan to pay each debt in full (some lenders pay creditors directly).
- Repay the new loan in fixed monthly payments until it’s paid off.
The CFPB points out that consolidation combines debts, it doesn’t erase them. If spending is the cause, consolidation alone won’t fix it.
Source: What do I need to know if I’m thinking about consolidating my credit card debt?
Ways to consolidate
| Option | How it works | Main risk |
|---|---|---|
| Debt consolidation loan | A fixed-payment loan from a bank, credit union or lender pays off your debts | Low rates may be temporary; fees can add up |
| Balance transfer card | Move card balances to one card at a 0% or low promotional rate | Promotional rates end; transfer fees usually apply |
| Home equity loan | Borrow against your home to pay off debts | You could lose your home if you can’t repay |
Source: What do I need to know if I’m thinking about consolidating my credit card debt?
When consolidation helps, and when it doesn’t
It can help if…
- The new APR is lower than the average APR on your current debts.
- The total of payments is lower, not just the monthly payment.
- You’ve stopped adding to the old balances.
Think twice if…
- The lower payment comes only from a much longer term.
- The low rate is an introductory “teaser” rate.
- Fees wipe out the interest savings.
Source: What do I need to know if I’m thinking about consolidating my credit card debt?
Estimate a consolidation loan
Add up what you pay now each month on the debts you’d consolidate, then compare it with the estimate below, and compare the totals too.
Offers to be careful with
For free advice, the CFPB suggests a nonprofit credit counselor, who can help with a budget and a repayment plan.
Source: What do I need to know if I’m thinking about consolidating my credit card debt?
Requesting loan options here
Choose an amount from $200 to $5,000 and complete the short form on our loan request page. Your request is shared with lenders and lending partners who may make you an offer. Lenders may check your credit.
We are not a direct lender and don’t make credit decisions. Submitting a request doesn’t guarantee an offer. Compare any offer with your current debts before you accept.
Common questions
What is a debt consolidation loan?
A new loan used to pay off several existing debts, so you have one payment. It doesn’t reduce the amount you owe.
Source: What do I need to know if I’m thinking about consolidating my credit card debt?Does debt consolidation hurt your credit?
Applying can bring a credit inquiry, and a new account changes your credit mix. Paying the new loan on time and not running up old balances may help over time.
Is a balance transfer better than a consolidation loan?
It can be, if you can pay off the balance before the promotional rate ends. The CFPB notes transfer fees usually apply and promotional rates expire.
Source: What do I need to know if I’m thinking about consolidating my credit card debt?Can I consolidate an Okinus lease?
An Okinus lease isn’t a loan, so it isn’t usually part of debt consolidation. If you want to end it early, ask Okinus for your early purchase amount.
Source: Okinus: Consumer FAQsSources
Checked October 14, 2026
- What do I need to know if I’m thinking about consolidating my credit card debt?, Consumer Financial Protection Bureau. Checked October 14, 2026.
- Consumer FAQs, Okinus Credit Solutions. Checked October 14, 2026.