Consolidating credit card debt impact credit score

22-Mar-2020 01:00

Then you can focus on repaying that personal loan, which requires just one monthly payment and, ideally, has a lower interest rate than what you were paying across multiple debts (it may not have a lower rate, but it’s in your best interest to find the lowest one you can).

The specifics of how debt consolidation works will vary by the type of debt you have and the method you choose.

Maggie Germano, a certified financial education instructor and financial coach in Washington, D.

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If you know that you’re not great at keeping up with your payments without someone reminding you to, looking into credit counseling or debt management options is a good idea.” According to Germano, a good rule of thumb is this: Consolidation is not a good option if your debt is more than 50 percent of your income.

By consolidating debt with a personal loan, you can save considerably — sometimes up to 40 percent of the total debt.