Debt consolidation calculator
See if debt consolidation is for you by estimating how much you can save
Current monthly payment$1,000
Current monthly payment
With an excellent credit score, we estimate a 11.81% APR for a 5-year personal loan.
Total interest saved$2,459.92
Who can qualify for a debt consolidation loan?
Debt consolidation loans are available to borrowers across the credit spectrum, so you can still get a debt consolidation loan even if you have fair or bad credit (a score below the mid-600s).
Lenders weigh multiple factors in your loan application, including credit score, credit history, any existing debt and income.
Some lenders allow you to add a co-signer or co-borrower to your loan application, or secure the loan with collateral, like your car, all of which can boost your chances of qualifying for a debt consolidation loan.
Did you know? According to NerdWallet’s midyear check-in report, conducted online by The Harris Poll, more than a third of Americans (35%) set a financial goal to pay off or pay down debt in 2025. A quarter of Americans (25%) want to pay off/down credit cards. The top barriers cited by those with debt payoff goals are increased expenses (43%), decreased income (24%) and high interest rates (26%).
How to get a debt consolidation loan with NerdWallet
1. Know your credit score before applying
A quick check to your credit score gives you an idea of where you stand in terms of the credit brackets — excellent, good, fair or bad — and which lenders may be the best fit based on their minimum credit score requirement. You can check your credit score for free on NerdWallet. 2. Pre-qualify and compare multiple loan offers
To get the best deal on a debt consolidation loan, you’ll want to pre-qualify with lenders to compare rates and terms before you apply. Pre-qualification won’t hurt your credit score.
3. Submit your application
Once you’ve decided on a lender, it’s time to formally apply. Loan applications ask for personal information like your Social Security number, address and other contact details. You also may be asked to provide proof of identity, employment and income.
Some online lenders can approve applications the same day and send loan funds in one business day.
4. Pay off your creditors
After receiving the loan funds, use the money to pay off all your debts. Some lenders may offer to send the loan funds to your creditors for you, so you’ll need to provide the correct account information. Check the accounts later to make sure they’re paid off.
5. Start making payments on your new loan
Personal loan payments are due monthly, though there’s no prepayment fee for paying off a loan early. As you make progress on your debt consolidation loan, try to keep credit card balances at or near zero, but avoid closing the accounts, which can lower your credit score.
Are debt consolidation loans a good idea?
Debt consolidation loans are a good idea if you can get a lower annual percentage rate than what you're currently paying across your other debts. Here’s a closer look at the pros and cons.
Pros-
You pay less in interest.
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You may get out of debt faster.
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You have only one payment.
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You have a clear finish line.
Cons-
You may not qualify for a low enough rate.
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You still have debt you need to manage.
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Consolidation won't fix core spending issues.
Pros of debt consolidation loans
Less interest: By consolidating debt under a lower-rate debt consolidation loan, you’ll pay less in interest, so more money goes toward the principal debt
Faster payoff: Because you’re saving on interest, you can use that savings to make larger payments on the loan, speeding up your debt payoff timeline.
Fixed payments: Unlike juggling multiple credit card bills or other debt repayments, you’ll have only one monthly payment with a consolidation loan.
Clear finish line: A debt consolidation loan gives you an exact date you’ll be debt-free, which can help you stay motivated as you make payments.
Cons of debt consolidation loans
Higher rates for some: Not all consolidation loans come with low interest rates, and if you have bad credit, you may not qualify for a lower rate than your current debts.
Payments to manage: Consolidation doesn’t erase debt, it just moves it somewhere else. You’ll still need to commit to paying down debt via regular monthly loan payments.
Root issues: If you’re in debt because you struggle to control spending, a debt consolidation loan won’t fix that.
How to choose the best debt consolidation loan
To narrow down your debt consolidation loan options, ask yourself these five questions:
Does the lender’s loan amounts and terms match my debt? Debt consolidation loans come in a wide range of amounts ($1,000 to $50,000) and repayment terms (two to seven years). Make sure the lender offers the loan amount you need and enough time to pay it off.
Does the lender offer an APR lower than my existing debts? The loan's annual percentage rate, or APR, represents its true annual cost and includes interest and any fees. The most affordable loan is the one with the lowest APR.
Do I meet the lender’s qualification criteria? Some lenders openly disclose their borrower requirements, including minimum credit score, credit history and income. You can check the lender’s website for this information or call and ask to speak to a loan officer.
Does this lender charge an origination fee? An origination fee ranges from 1% to 10% of the loan amount and is deducted from the loan proceeds or added to the loan balance. Avoid loans with this fee, unless the APR (which includes the origination fee) is still lower than loans with no origination fee.
Does this lender offer special debt consolidation features? Some lenders offer extra perks, like sending the loan funds directly to your creditors or free credit score monitoring. Consider these features, but always prioritize an affordable loan you can repay on-time.
