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How to Save Money With Debt Consolidation: What to Know
This guide explores how debt consolidation may help reduce overall borrowing costs, simplify multiple payments, and create a more structured approach to managing your debt over time.
Debt consolidation can help you save money by combining multiple debts, such as loans or credit balances, into a single, more organized payment plan. Instead of making separate payments to different lenders with different due dates, everything is brought together into one solution. This may help reduce the overall cost of managing debt, especially if higher-interest balances are replaced with a more manageable structure. With just one monthly payment to track, it becomes easier to stay organized, avoid missed payments, and focus on paying down what you owe over time.
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Programs from $10,000
How Debt Consolidation Can Help You Save Money
You start by applying for a single new loan or debt consolidation solution designed to cover the total amount of your existing debts.
If approved, the funds are either disbursed to you or sent directly to your creditors, depending on the provider's process.
Those funds are then used to pay off your existing debts in full, bringing multiple balances together into one structure.
Instead of managing several bills and due dates, you move to a single monthly payment with your new lender or provider.
Instead of paying multiple high-cost debts separately, you combine everything into one manageable payment, which may help reduce overall costs and save you money over time.
Make It Easier to Pay Less Over Time
One Monthly Payment to Manage
Bring multiple debts together into one plan so you only need to manage a single monthly payment and due date.
Potential Interest Savings
Debt consolidation may help reduce overall interest by replacing higher-rate debts with one more manageable option.
Clear Payoff Timeline
Follow a set schedule so you know when your debt could be fully paid off.
Steady Monthly Payments
Make one consistent payment each month, helping you plan your budget with more confidence.
Easier to Stay Organized
With fewer accounts to track, it becomes simpler to manage your debts and stay on top of your finances.
Featured Providers
When You Should Consider Debt Consolidation
It may be worth considering if:
You're managing multiple debts and want an easier way to stay on top of them
You prefer one monthly payment instead of tracking several due dates
You want a clearer and more predictable path for paying down what you owe
You're focused on getting your finances in order and reducing debt over time
See how debt consolidation may work for you.
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Choose the right loan for your situation
Different situations call for different options:
If you have less than perfect credit, see options designed for your profile
If you have fair credit (640 to 679), explore lenders that work for you
If you want to estimate your savings, try our debt consolidation calculator
If you're looking by state, see top providers in your state
How to apply for a debt consolidation loan
Add up your debts so you know exactly how much you need to consolidate
Check your credit profile so you understand your starting point
Compare providers based on minimum debt, program length, fees, and customer experience
Pre qualify with a soft credit pull to see your options without affecting your score
Apply or enroll with your chosen provider
Receive your plan and start making one simple monthly payment
Add up your debts so you know exactly how much you need to consolidate
Check your credit profile so you understand your starting point
Compare providers based on minimum debt, program length, fees, and customer experience
Pre qualify with a soft credit pull to see your options without affecting your score
Apply or enroll with your chosen provider
Receive your plan and start making one simple monthly payment
Get started with Accredited.
See your options in 60 seconds.
Ready to simplify your debt?
Get started with Accredited
with no impact to your credit.
Frequently Asked Questions
Most providers look at your total debt, income, and overall situation. Many providers work with a wide range of profiles, including borrowers with less than perfect credit.
What is Debt Consolidation?
Debt consolidation is a financial strategy designed for those who are managing multiple unsecured debts. The primary goal is to simplify your financial life by combining those various monthly obligations into a single, more manageable payment.
How Does Consolidation Work?
Debt consolidation is a financial strategy in which you combine multiple high-interest debts into one loan with a single monthly payment. The process typically involves getting a personal loan, using the funds to pay off your existing debts like credit cards or medical bills, and then repaying the new loan over a set period. As a result, you’ll have just one manageable monthly bill instead of many.
Representative Example
For a $20,000 personal loan with a 48-month repayment term and a 6.99% APR (which may include an origination fee), your required monthly payment could be around $479. Over the life of the loan, the total amount paid back would be approximately $22,981. The APR for your loan may be higher or lower, as the actual rate depends on your financial profile, loan term, and other factors.
Typical Loan
Debt consolidation loans can accommodate a wide range of financial needs. Repayment periods are generally structured from 2 to 5 years (24-60 months). Your specific monthly payment is determined by the total amount of your enrolled debt and the repayment term you choose.