How to Consolidate Multiple Debts with a Personal Loan

Juggling multiple debts—credit cards, medical bills, and small loans—can be overwhelming and expensive. Consolidating them into a single personal loan can simplify your payments and potentially lower your overall interest rate. In this guide, we’ll show you how to calculate your total balances, compare consolidation offers, and set up a repayment plan that works.

Table of Contents

• 1. Calculate Your Total Debts
• 2. Choose Your Loan Amount
• 3. Compare Consolidation Offers
• 4. Apply Smartly
• 5. Structure Your Repayment Plan

1. Calculate Your Total Debts

Gather statements for all debts you want to consolidate: credit cards, medical bills, payday loans, and any installment loans. Sum the outstanding balances and note each account’s interest rate and minimum payment.

2. Choose Your Loan Amount

Your target loan should cover the total balance plus a 3–5% buffer to account for any accrued interest or fees before payoff. Avoid borrowing extra to minimize interest on unused funds.

3. Compare Consolidation Offers

Prequalify with top platforms—like LendingClub and Credible—to see APRs, origination fees, and terms without impacting your credit. Use our Personal Loan Calculator to model monthly payments and total interest savings.

4. Apply Smartly

• Improve your credit score first by disputing errors and paying down small balances.
• Gather proof of income, bank statements, and debt statements to streamline approval.
• Opt into autopay for potential rate discounts.
• Confirm that the lender will pay off your debts directly, not issue you a lump sum you must distribute.

5. Structure Your Repayment Plan

Select a term that balances manageable monthly payments with interest savings—shorter terms cost less in interest but raise payments, while longer terms lower payments but increase total interest. Automate payments and, as you free up cash flow, direct extra funds toward the principal to pay off faster.

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Conclusion

Consolidating multiple debts into one personal loan can simplify your finances, reduce stress, and save on interest. By accurately calculating totals, comparing offers, and strategically planning repayments, you’ll pave the way to becoming debt-free sooner.