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You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.
The interest rate depends on your credit profile, and it usually doesn’t change during the life of the loan.
The following five tips can help you figure out which credit card consolidation strategy suits you best.
One of the first things you’ll want to do is check your credit reports for accuracy.
The following four steps will walk you through calculating how much debt you have, choosing the debt consolidation loan, setting a timeline to be debt free and teaching you how to control your spending.
Here’s how credit card consolidation works: You first decide if you want to take out a new loan, open a new credit card or enroll in a debt management plan (more on that later).
Instead of having multiple debt payments each month, you’ll only have one.
Whichever option you choose, you will use it to pay off your multiple balances.
Then you’ll only have one monthly payment: the loan, the credit card or the debt management plan.
A debt consolidation loan is a good strategy if you: In this article, you can read about: Nerd Wallet’s top lenders for debt consolidation How to compare debt consolidation lenders How to consolidate debt successfully If your credit is good, you can apply for a 0% interest credit card and transfer your existing balances to it, which could save you money.
However, a balance transfer card requires discipline to pay it off before the promotional rate expires, usually no more than 21 months.