Debt consolidation means replacing several debts with one payment, ideally at a lower total cost. There are very different ways to do it, from a nonprofit debt management plan to a new loan or a balance transfer card. Below is how to compare them and the published terms for five options. Approval and savings are never guaranteed.
How to compare debt consolidation options
- Total cost, not just the monthly payment. A lower payment over a longer term can cost more overall. Compare the APR and the number of months left on your current debts with the new offer.
- Fees. Look for origination fees on loans, balance transfer fees on cards (usually a percentage of each transfer) and any setup or monthly fees on a debt management plan.
- Credit requirements. Low-APR loans and 0% balance transfer offers generally go to stronger credit profiles; a debt management plan doesn’t require new credit.
- Soft-pull prequalification. For loans, check your rate with a soft inquiry before a hard application.
- Direct payment to creditors. Some lenders can pay your card balances directly, which removes the temptation to spend the money.
- Your habits. Consolidation only helps if you stop adding new balances to the accounts you paid off.
Debt consolidation options compared
| Option / provider | How it works | Cost | Amounts / terms | Good to know | |
|---|---|---|---|---|---|
| Nonprofit debt management plan (NFCC member agency) | Not a loan. You make one monthly payment to a nonprofit credit counseling agency, which pays your creditors. | Creditors may reduce or waive finance charges and fees. Agency fees: See provider site | Repays your full balances; length See provider site | The CFPB suggests confirming that each creditor accepted the plan before you send payments, and asking for fees in writing. | Find a counselor |
| Happen Bank (formerly LendingClub) personal loan | Fixed-rate installment loan; can pay your creditors directly. | 5.96%–35.99% APR including origination fee; most origination fees 0%–8% | $1,000–$75,000; 24–84 months | Rate check uses a soft pull. | Apply / Learn more |
| Upgrade personal loan | Fixed-rate installment loan for refinancing cards or consolidating debt. | 7.74%–35.99% APR; origination fee See provider site | $1,000–$50,000; 24–84 months | Upgrade says using all or part of the loan to pay off existing debt can lower your APR. Soft-pull rate check. | Apply / Learn more |
| Federal credit union consolidation loan | A regular (non-PAL) personal loan from a federal credit union you join. | Maximum APR 18% under NCUA rules | See provider site (varies by credit union) | Eligibility can be stricter than online lenders; membership required. | Learn more |
| Balance transfer card, e.g. Citi Simplicity® | Move card balances to a new card with a low intro APR for a set period. | $0 annual fee, no late fees, no penalty rate. Intro APR, intro period and balance transfer fee: See provider site | Credit limit and APR based on creditworthiness | Transfers must be completed within the issuer’s window. Pay the balance off before the intro rate ends. | Apply / Learn more |
Last checked: Nov 2026. Figures come from each provider’s own website or from the CFPB/NCUA (nfcc.org, consumerfinance.gov, happen.com, upgrade.com, mycreditunion.gov, citi.com). Rates, fees and terms change and can vary by state; “See provider site” means the provider doesn’t publish that figure or we couldn’t confirm it. Always read the provider’s current terms before you apply.
Related reading: Understanding debt management plans, 5 tips for debt consolidation and consolidating payday loan debt.
Alternatives and warnings
- Debt settlement is risky. The CFPB warns that settlement companies often charge expensive fees, usually tell you to stop paying your bills, may not settle all your debts, can lead to lawsuits and can hurt your credit; forgiven debt may also be taxable. Avoid any company that charges before it settles a debt. Read Should you consider debt settlement? and the CFPB’s guidance.
- Don’t consolidate into a payday loan. A typical two-week payday loan can carry an APR of almost 400%, according to the CFPB.
- Credit repair scams. No company can legally remove accurate negative information from your credit report, and credit repair companies can’t charge upfront. See how to spot a credit repair ripoff.
- Using home equity puts your house at risk if you can’t repay. Get advice before turning unsecured card debt into secured debt.
Frequently asked questions
Is a debt management plan the same as debt settlement?
No. With a debt management plan you repay what you owe in full, often with reduced interest or fees, through a nonprofit agency. Debt settlement tries to get creditors to accept less than you owe, usually after you stop paying, which carries the risks the CFPB describes above.
Will a consolidation loan hurt my credit?
Applying usually adds a hard inquiry, and a new account lowers your average account age. Over time, on-time payments and lower card balances can help. Results depend on your overall credit behavior.
What credit do I need for a balance transfer card?
Issuers set the credit limit and APR based on creditworthiness, and 0% intro offers generally go to applicants with stronger credit. If your credit is damaged, a nonprofit credit counselor may be a better first call.
How do I find a legitimate credit counselor?
The CFPB suggests starting with the National Foundation for Credit Counseling or the Financial Counseling Association of America, then checking the organization with your state attorney general. Ask about fees in writing.
This page is general education, not financial, legal or credit-repair advice. Approval, rates and terms are set by each provider and are never guaranteed. See our Financial Disclaimer.