Debt consolidation is when you combine all of your debts into one big debt. By consolidating your debt, you reduce the number of monthly payments and the total amount you pay each month. The two main ways to consolidate your debt:
First, you can Transfer all your credit card debt onto one credit card with low- or no-interest. You might find a promotion where a card has zero percent interest for 12 to 18 months or longer. Use this time to pay off your debt without accumulating interest.
Make sure you can pay it all before the end of the promotional period because you might have a high-interest rate once it stops.
Another way is to Get a debt consolidation loan to pay off your debt for a lower rate for a longer period. If you have good credit and too much debt to pay off in a year, apply for a personal loan to pay off all your credit card debt.
Personal loans have much lower rates than credit cards, and you could chip away at your debt over the years at a much lower cost.
Figure out what you can afford to pay each month before picking one of the debt consolidation options. If you cannot afford to pay off your debt during the promotional period, a personal loan might be the better option in the long run.
Some debts, like your mortgage, cannot transfer to a promotional credit card or a consolidation loan.
With accounts like these, you might be able to refinance your debt for a lower interest rate.