Consolidate My Debt

don\'t get overwhelmed, consolidate debt
  • There are many answers to: "How do I consolidate my debt?"
  • Debt consolidation programs are NOT one size fits all, do your homework.
  • Evaluate how you feel about your financial goals, and let the best debt consolidation program fall out of that analysis.

Consolidate My Debt Tips and Advice (with video)

Are you asking yourself: “How do I consolidate my debts?” or “How do I consolidate my bills?”

With all the bad credit news recently, and the staggering amount of debt impacting American families, millions are now asking, "How do I consolidate my debt or consolidate my bills safely and affordably so I can save?" It is still possible to consolidate debts and make your way to financial freedom, but you have to be make wise choices and be committed to getting out of debt. You need to know your goals and if you are looking for a new loan (one way to consolidate debt) or a service that helps you make payments and pay down your debts (a very different way to consolidate debt).

We frequently advise for consumers with debt problems to seek help, but start by getting a solid game plan in place so that when you ask "How do I consolidate my debt?" you know what you are asking and where you want to go. This means prioritizing the key variables, including:

  1. Low monthly payments
  2. Lowest total cost
  3. Experience and amount of work you have to exert to get debt free
  4. Time to debt freedom, and lastly
  5. The credit rating impact

For example, Credit Counseling or Debt Settlement are services that can help someone consolidate debt and the benefits are a low cost and a low program payment. However, these benefits come at a severe cost as you will face challenging times including collection processes and your credit rating will be impacted.

At the other end of the spectrum, a refinance loan is a great way for a consumer to roll all of their unsecured debts into one new loan, but it will typically take 30 years to pay off that new mortgage loan and the total cost could be high, given decades of compounding.

For an in-depth look at options for debt relief, take a look at our debt white paper and our debt relief options comparison tool. has all the resources and advice you need to consolidate debt, change your spending habits, and pay off your debt more quickly. You can find an affordable debt consolidation loan in the Debt Savings Center. You will also find additional resources to help you get control of your finances and make a permanent change for the better so that you never have to worry again about "How do I consolidate my debt?"

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Comments (16)

Vickie P.
Oklahoma City, OK  |  March 26, 2014
I have 120,000 in student loan debt and about 50,000 in regular debt i've tried for year to bring my score up and do better but it seems like im not getting anywhere, any advice how do i consolidate this stuff.
March 27, 2014
Are the student loans federal? If so, you're in luck. Go to the student loan consolidation page to learn how to consolidate your federal loans.

Are the student loans private? If so, then you have fewer options. Follow the link I just mentioned to learn more.
Alex A.
Castle Point, NY  |  October 02, 2012
So, what is the best way to consolidate my debts?
October 02, 2012
There is no one-size-fits-all solution. The right choice for you depends on how much debt you have, what kind, your interest rates, your income, your assets, etc.

I suggest you use the Debt Coach, a free tool that will help you weigh the pros and cons of the different options available.
Tiffany R.
N Babylon, NY  |  April 25, 2012
I have about $4,000-4,500 in debt from store credit cards. I'm having a hard time keeping up with each due date. I lost my high paying job and now only work part time. I also go to college but have no school loans, thank God. How can I combine all of my debt so I can make one payment a month?
April 25, 2012
If you lack the income and credit score to qualify for an unsecured loan that would lower your current interest rates, you should look into a credit counseling program. You won't technically consolidate your debt, as you will still owe your original creditors, but you will consolidate your payments. You will make one monthly payment to the program that is sent to your creditors, after interest rate concessions are obtained. You will find out the rates they can get, before you sign up, so you can decide if the fee that is charged is worth the benefits that will be delivered.
Ken K.
Foster City, CA  |  April 18, 2012
If I am not planning on buying a house or a car in the next few years, how concerned should I be about the impact on my credit score from credit counseling or debt settlement programs?
April 18, 2012
See the article Debt Consolidation and Your Credit Score to learn the impact credit counseling, debt settlement, and bankruptcy has on your credit score. V.
Waianae, HI  |  August 18, 2011
Hi, I have very high debt (35k); however, pay everything on time. My credit report as far as payments is excellent. The issue is my high debt. I don't want to do debt consolidation because I know what I need to do and I feel that I am responsible for what I owe. Are there any lenders that would work with me on a consolidation loan?
August 19, 2011
To qualify for a debt consolidation loan, you need to meet the lender's requirements for credit rating, which does not appear to be a problem, and debt-to-income ratio, which could very well be a problem.

If you don't have equity in a home that you can borrow against, it will be difficult to find an unsecured loan to meet your goal.

If you have high interest rates on your debts, I suggest you look at credit counseling. In a credit counseling program, the creditors receive 100% of what you owe. You can see if the program will be able to deliver lower interest rates that will speed up the time it takes to pay off your debts, before you sign up.
Danielle M.
Phoenix, AZ  |  April 28, 2011
I am currently struggling with all of my bills and not quite sure what to do. I am 21 and definitely took the role as young and stupid. I have 3 credit cards that are maxed and 2 college loans well over $8000. I have a part time job, and have only been able to afford my rent for the past 4mths. Would I be able to get a loan or should I file for bankruptcy?
April 28, 2011
There is no one-size-fits-all choice that fits everyone equally. Read the resource What are my debt resolution options? to understand the pluses and minuses of each debt consolidation approach available to you.
Harvey W.
Boston, MA  |  April 05, 2011
Thanks for the tips, but I have a question about how to consolidate my debt trouble. So, if I don't own a home and cannot refinance, I am i only left with the option of consolidating my debts with a counseling service like credit counseling or debt settlement? I have a lot of debt and unfort have pretty bad credit.
April 06, 2011
If you are unable to do a cash-out mortgage refinance, then your other loan options for consolidating your debt are a personal loan. However, you face an uphill struggle if you have a high debt-to-income ratio and a low credit score. See the resource Peer-to-Peer Loan to learn about that option for a personal loan. Instead of finding another loan to consolidate your existing loans, consider debt resolution, which as you mentioned, includes credit counseling and debt settlement. You may also want to consider bankruptcy.
Barney R.
December 08, 2010
I am thinking about consolidating my debt and would like to do a debt consolidation loan, but I don't own a home and also I do not have good credit. What are my other options, since i basically cannot afford my monthly payments on my debts any longer. Thanks Bill!
December 09, 2010
Because you lack assets, good credit, and enough income to stay on top of your monthly bills, a debt consolidation loan is not a viable option. If you have money in a 401(k) account that you can borrow from, you may want to take out a loan to pay off your highest interest debt. Only borrow from your retirement account if you can afford to repay the loan. If you don't pay the loan as agreed, you will have to pay income taxes and penalties on the money you borrowed. If your retirement account is not a potential solution, take a look at our debt white paper and our debt relief options comparison tool. Due to the fact that you are struggling to make your monthly payments, I suggest that you focus on either debt settlement or bankruptcy as solutions.
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