Turn many payments into one

How a debt consolidation loan works

Consolidating debt is simpler than it sounds. You take out one new installment loan large enough to cover the balances you want to clear — for example, two credit cards and a store-financing plan. You use the funds to pay each of those accounts down to zero, and then you're left with a single loan to repay in equal monthly installments.

The appeal is twofold. First, budgeting becomes easier: instead of remembering several due dates and minimum payments, you have one payment on one date. Second, there's the potential to lower your total interest. Credit cards often carry high variable rates, and revolving balances can linger for years. A fixed-rate consolidation loan from 6.5% APR gives you a defined payoff schedule, so more of each payment goes toward the principal rather than interest.

Here's the typical path from start to finish:

1. You apply and check your rate. Tell us roughly how much debt you'd like to consolidate. This soft check takes minutes and won't affect your credit score.
2. You receive a tailored offer. Within 24–48 hours, you'll see your rate, monthly payment and total cost laid out clearly.
3. You accept and pay off your balances. Once funded — usually within 1–2 business days — you clear your existing accounts.
4. You repay one fixed payment. You make the same payment each month until the balance hits zero, with no penalty for finishing early.

When does consolidating debt make sense?

Consolidation isn't the answer for everyone, but it can be a powerful tool in the right situation. A debt consolidation loan may be a good fit if you:

• Carry balances on several accounts — multiple credit cards, store cards or smaller loans you'd rather manage as one.
• Are paying high or variable interest — and want the certainty of a single fixed rate.
• Want a defined payoff date — instead of a revolving balance that never seems to shrink.
• Find it hard to track due dates — and worry about missing a payment across multiple accounts.
• Have steady income — and can comfortably afford one consolidated monthly payment.

Consolidation works best when paired with a plan to avoid running balances back up. If your credit history is still developing, our bad credit loans weigh income and affordability more heavily than your score. To compare structures, our personal loans offer the same flexible funding, and our installment loans are built around equal fixed payments. For a head start on raising your score, read how to improve your credit score.

Related loans & guides

Weighing your options? Our personal loans offer flexible funding for any purpose, our installment loans emphasize equal fixed payments, and our bad credit loans look beyond your score. You can also estimate your monthly payment, review our full rates & terms, or read our guides on how to consolidate debt and how to improve your credit score.