Debt consolidation loans in 60 seconds
- A debt consolidation loan is a new fixed-rate loan that pays off several debts, usually credit cards, so you have one payment and a set end date.
- It saves money only when its APR, which includes any origination fee, is clearly below what your cards charge, and the term is not so long that the extra months eat the savings.
- Compare options on APR, fee, the cash you actually receive, term, and total of payments. The monthly payment alone can fool you.
- It does not fix spending. If the cards fill back up, you end up with two debts instead of one.
- Lendifi is not a lender. We may refer you to a lending partner, and a referral is not an offer. Want to test your numbers first? Check if consolidating saves you money.
I carried roughly $10,000 in credit card debt. I paid every month and watched the balance barely move. A fixed-rate personal loan is what finally cleared it.
I didn't notice the origination fee until I was at the signing table with the papers in front of me, and I signed anyway. I don't remember the percentage. I never checked for a prepayment penalty either. There wasn't one, but that was luck, not diligence. Some lenders pushed so hard that I walked away for that reason alone. What I wanted was several offers in front of me at once, so I could look at them side by side and choose.
What I'd check now
Each item below is a lesson from that loan. Get every answer before you are at the signing table.
- The origination fee, in dollars. Ask for it early, and ask whether it comes out of the loan. If it does, less money reaches your cards than you repay. See what consolidation fees really cost.
- The cash you will actually receive. Make sure it covers the payoff amount on every card, including interest that adds up until the day each card is paid.
- A prepayment penalty, in writing. Find out whether paying early costs anything, and look for the answer in the loan documents, not a sales pitch.
- APR and total of payments, side by side. Put every option you get next to each other and compare those two numbers, not the monthly payment.
- The term in months, and fixed or variable. A longer term lowers the payment and raises the total cost. A fixed rate keeps the payment the same.
- How hard they push. If an offer only works when you decide today, walk away. Urgency is a sales tactic, and it shows how a company may treat you after you sign.
Common uses for debt consolidation
These are common kinds of debt people roll into a consolidation loan. Whether a lender lets you consolidate a given debt is up to that lender.
Rates, amounts & terms
Rates, loan amounts, and terms are set by each lender based on your credit, income, loan amount, and state. We do not publish ranges here until our lending partner confirms them in writing. Whatever you are offered, check these three numbers on the disclosure before you sign.
includes any origination fee
and your profile
mean more total interest
APR = Annual Percentage Rate. The APR includes the origination fee; the interest rate does not. Lendifi.io does not guarantee any rate or loan approval. Lendifi does not pull your credit. Lenders may check your credit if you apply with them.
What a 5% origination fee does to a $10,000 loan
These are sample numbers to show the math, not a quote or an offer. Your rate, fee, and term come from the lender.
| 15% interest rate, 36 months | No fee | 5% fee taken from a $10,000 loan | 5% fee, borrow enough to net $10,000 |
|---|---|---|---|
| Amount borrowed | $10,000.00 | $10,000.00 | $10,526.32 |
| Cash you receive | $10,000.00 | $9,500.00 | $10,000.00 |
| Monthly payment | $346.65 | $346.65 | $364.90 |
| Total of payments | $12,479.52 | $12,479.52 | $13,136.34 |
| Cost beyond the cash you receive | $2,479.52 | $2,979.52 | $3,136.34 |
| APR | 15.00% | 18.67% | 18.67% |
Same interest rate, same payment in the first two columns, and yet the fee version has a higher APR because you got less money. That is why APR is the number to compare, and why the fee belongs in the math before you sign.
For comparison, paying $10,000 of card debt at 22.36% APR (the Federal Reserve's August 2026 average for accounts charged interest) down to zero in 36 months takes $383.77 a month and $3,815.70 in interest. The no-fee loan above costs $1,336.18 less. The fee version that nets $10,000 still costs $679.36 less, but the fee ate about half of the savings. At a higher loan rate or a bigger fee, it can wipe them out. Run your own numbers in our Should I consolidate? calculator, and use our guide to reading your calculator results to check each row.
Math: standard amortization with monthly compounding. APR is the annual rate at which the monthly payments equal the cash you receive. Figures computed by Lendifi Editorial, October 2026.
When not to consolidate
A consolidation loan is the wrong move for a lot of people. Skip it, or wait, if any of these are true.
- The best APR you can get, fees included, is close to what your cards charge. A small rate cut will not survive a fee and a longer term. Work on your rate and check again later. Our guide on credit scores for consolidation explains what moves the rate.
- You could clear the balance within about a year on your own. Just pay it down. A plan like the avalanche needs no application, no hard inquiry, and no fee. See consolidation vs snowball and avalanche.
- A 0% balance transfer would cover it and you can clear it before the promo ends. That can cost less, even after the transfer fee. See consolidation loan vs balance transfer.
- The spending that built the debt has not stopped. The CFPB makes the same point: if you are spending more than you earn, a consolidation loan probably won't get you out of debt. Read how to avoid new card debt after consolidating.
- You cannot afford the fixed payment, or you are already behind. A nonprofit credit counselor may be a better first call than any lender. Be careful with debt settlement, which is a different thing. See consolidation vs debt settlement.
- The only offer asks for your car or home as collateral. That turns unsecured card debt into debt you can lose property over.
- The offer comes from a payday, car title, or tribal lender, or a "relief" company that wants fees upfront. Walk away. Our policy is not to partner with payday, car title, or tribal lenders.
If you have bad credit and still want to try, read debt consolidation with bad credit first. For the full process, see how debt consolidation loans work, step by step. Live in Utah, California, Texas, or Florida? See our state guides: debt consolidation in Utah, in California, in Texas, and in Florida.
How it works in 3 steps
The form takes about 60 seconds. Here is what happens after you send it.
Frequently asked questions
Where these facts come from
- Consumer Financial Protection Bureau, What do I need to know about consolidating my credit card debt? (last reviewed September 2, 2026, when we checked).
- Consumer Financial Protection Bureau, Do personal installment loans have fees?
- Consumer Financial Protection Bureau, What is the difference between a loan interest rate and the APR?
- Consumer Financial Protection Bureau, What is a credit inquiry?
- Federal Reserve, Consumer Credit, G.19, release of October 7, 2026: average credit card APR of 22.36% for accounts assessed interest, August 2026.
- Federal Trade Commission, How to get out of debt.
- Federal Trade Commission, Looking for debt relief? Here's how to avoid a scam.
- Dollar figures on this page are computed by Lendifi Editorial with the standard amortization formula. Read our editorial policy and how we make money.
Ready to find your best rate?
No cost. No obligation. See your options in about 60 seconds.
See how much I could save, freeLendifi.io is a lead generation marketplace operated by Apex Lead Group LLC. We are not a lender. Any rates on this page are examples or estimates, not offers of credit. Lendifi does not pull your credit. Lenders may check your credit if you apply with them.