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Rodrick Marsden 23-02-22 22:11 view489 Comment0

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How to Get a Loan to Consolidate Debt in just 5 steps

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How to Get a Debt Consolidation Loan in just 5 steps
The steps to get an debt consolidation loan include checking your credit before comparing different options, then applying for an loan.


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Updated on January 10, 2023

The majority or all of the products we feature come from our partners who compensate us. This influences which products we feature as well as the place and way the product is featured on the page. But, it doesn't affect our opinions. Our opinions are our own. Here is a list of and .



Steps



Steps





A will consolidate several high-interest debts into one payment and help you pay off debt faster.
Here's how you can get an installment loan in five steps.
1. Verify your credit score

Check the credit scores of your. Borrowers with good to excellent score (690 to credit score of 850) are more likely to win approval and obtain a low interest rate for a debt consolidation loan.
In the ideal scenario, the consolidation loan is supposed to have a lower rate than the total interest rate on your other debts. A lower rate lowers the total cost of your debt and may aid in getting out of debt quicker.
If you have bad credit (300 or 629 in credit scores) and need some time to , you may be eligible for a lower-rate loan. Here's how:
Make sure you catch up on late payments. In the event of a late payment, credit agencies will report it at thirty days after the due date, which could affect your credit score as many as 100 points. If you're within the 30-day time frame for a debt payment, you have time to submit it.
Check for credit report errors. Errors that appear on your credit reports, for example, payments applied to the wrong debts or accounts incorrectly labeled as closed, can hurt your credit score. Check your credit reports for free at AnnualCreditReport.com and dispute any mistakes you find.
Repay small debts. The amount of debt owed is 30% of your credit score. If you are able pay down your credit cards with high interest prior to deciding to consolidate. This will improve your credit score, which will allow you to obtain a lower rate for this consolidation loan.

>> COMPARE:
2. List your debts and payments

Create a list of ones you'd like to consolidate including credit cards and merchant credit cards payday loans and other high-interest debts -- and sum up the total amount due. You'll want your debt consolidating loan amount to be sufficient to pay for the total amount of the debts.
Add up the amount you make each month to your debts. Also, review your financial plan for adjustments needed to continue debt repayments. The new loan is likely to have a lower interest rate and a monthly payment that fits within your budget. Set a repayment schedule that is based on your budget.
Utilize a tool to determine if it makes sense to consolidate.
3. Compare loan options

Shop for the loan which is right for you. Credit unions, online lenders and banks all provide personal loans to consolidate debt.
cater to borrowers with all ranges of credit. The majority of online lenders allow you to pre-qualify to compare personalized rates and terms with no impact to your credit score.
are not-for-profit organizations that may offer lower rates for borrowers with fair or bad credit. You must become a member in order to get a loan and certain credit unions might require a with your application, which may temporarily harm you credit scores.
The best candidates are applicants with excellent or good credit scores. Customers who have an existing bank relationship could have a much easier to qualify and can enjoy special perks like discounts on rates or access to higher loan amounts.

Find lenders who offer direct payment to creditors, which simplifies the consolidation process. Once the loan expires the lender transfers the loan funds to creditors for no additional cost.
Take a look at other options that lenders provide, such as discounts on rates for creating autopay and accessibility to credit scores or free financial education.
>> MORE:
Personal loans through our partner companies
Debt Consolidation Big Purchase Emergency Home Improvement Medical

on LendingClub



LendingClub
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring algorithm takes into consideration aspects we consider to be consumer-friendly, including impact on credit score, fees and rates customers' experience, and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula is based on factors we consider to be a good choice for consumers, such as the impact on credit scores, rates and fees, customer experience and ethical lending practices.


APR 8.3-36.0%


The amount of the loan is $1,000.





on LendingClub





on Happy Money



Happy Money
4.5 NerdWallet's ratings were determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including the impact on credit scores, rates and fees, customer experience and ethical lending practices.



4.5 NerdWallet's ratings are determined by our editorial staff. The scoring formula considers factors we consider to be beneficial to consumers, including impact to credit score rate and fees, the customer experience and responsible lending practices.


APR 7.99-29.99%


The loan amount is $5,000 to $40,000





on Happy Money





on PenFed Credit Union



PenFed Credit Union
5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula takes into account the factors we believe to be friendly to consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's rating is determined by our editorial team. The scoring algorithm takes into consideration factors we consider to be a good choice for consumers, such as the impact on credit score, rates and fees as well as the customer's experience and ethical lending practices.


APR 7.74-17.99%


The loan amount is $600-$50,000.





on PenFed Credit Union





on the Upgrade



Upgrade
5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula is based on the factors we believe to be beneficial to the consumer, including the impact on credit score, fees and rates customers' experience, and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration the factors we believe to be beneficial to consumers, including the impact on credit score, fees and rates as well as the customer's experience and responsible lending practices.


APR 8.49-35.97%


The amount of the loan is $1,000.





on Upgrade





on Upstart



Upstart
4.5 NerdWallet's ratings are compiled by our editorial team. The scoring algorithm takes into consideration factors we consider to be beneficial to the consumer, including impact on credit score, fees and rates as well as the customer's experience and ethical lending practices.



4.5 NerdWallet's ratings were determined by our editorial staff. The scoring formula takes into account factors we consider to be beneficial to the consumer, including impact on credit score, rates and fees, customer experience and responsible lending practices.


APR 6.5-35.99 Percent


Amount of loan: $1,000 - $50,000





on Upstart





on LightStream



LightStream
5.0 NerdWallet's rating is determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including impact to credit score, fees and rates customers' experience, and ethical lending practices.



5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula is based on aspects we believe are friendly to consumers, such as the impact on credit score, rates and fees, customer experience and ethical lending practices.


APR Rates quoted are with AutoPay. 6.99-23.99%


Loan amount $5,000 - $100,000





on LightStream











on LightStream



LightStream
5.0 NerdWallet's rating is determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be beneficial to consumers, such as impact to credit score, rates and fees customers' experience, and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account aspects we believe are friendly to consumers, such as the impact on credit score, fees and rates as well as the customer's experience and responsible lending practices.


APR Rates mentioned are for AutoPay. 6.99-23.99%


Loan amount $5,000 - $100,000





on LightStream





on Axos



Axos
4.0 NerdWallet's ratings are compiled by the editorial staff. The scoring algorithm takes into consideration the factors we believe to be a good choice for consumers, such as the impact on credit score, rates and fees, customer experience and responsible lending practices.



4.0 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account aspects we consider to be beneficial to consumers, such as impact to credit score, fees and rates, customer experience and ethical lending practices.


APR 7.99-14.99%


The loan amount is $5,000 to $50,000.





on Axos





On Upgrading



Upgrade
5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula takes into account the factors we believe to be consumer-friendly, including impact to credit score, rates and fees customers' experience, and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring algorithm takes into consideration aspects we believe are consumer-friendly, including impact to credit score, rates and fees customers' experience, and responsible lending practices.


APR 8.49-35.97%


Amount of loan: $1,000 - $50,000





on Upgrade





on SoFi



SoFi
5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula is based on the factors we believe to be consumer-friendly, including impact to credit score, fees and rates as well as the customer's experience and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula is based on aspects we believe are consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.


APR 7.99-23.43%


Loan amount $5,000 - $100,000





on SoFi





on Best Egg



Best Egg
4.5 NerdWallet's ratings are compiled by our editorial staff. The scoring formula considers factors we consider to be beneficial to the consumer, including the impact on credit score, fees and rates, customer experience and ethical lending practices.



4.5 NerdWallet's ratings were determined by our editorial staff. The scoring formula considers factors we consider to be beneficial to the consumer, such as impact on credit score, rates and fees, customer experience and ethical lending practices.


APR 8.99-35.99%


Loan amount $2,000 - $50,000





on Best Egg





on Achieving



Reach your goals
5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account the factors we believe to be a good choice for consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula takes into account aspects we believe are beneficial to the consumer, including impact on credit score, rates and fees as well as the customer's experience and ethical lending practices.


APR 7.99-29.99%


The loan amount is $5,000 to $50,000.





on Achieving











on OneMain Financial



OneMain Financial
4.0 NerdWallet's ratings are compiled through our team of editors. The scoring formula is based on factors we consider to be a good choice for consumers, such as impact to credit score, rates and fees, customer experience and responsible lending practices.



4.0 NerdWallet's ratings are compiled by the editorial staff. The scoring formula is based on factors we consider to be consumer-friendly, including the impact on credit scores rates and fees, customer experience and ethical lending practices.


APR 18.0-35.99 percent


Amount of loan $1,500-$20,000





on OneMain Financial





on Upstart



Upstart
4.5 NerdWallet's ratings were determined by our editorial staff. The scoring formula takes into account aspects we believe are friendly to consumers, such as the impact on credit score, fees and rates customers' experience, and responsible lending practices.



4.5 NerdWallet's ratings are determined by our editorial team. The scoring formula considers factors we consider to be consumer-friendly, including impact to credit score rate and fees, customer service and ethical lending practices.


APR 6.5-35.99%


The amount of the loan is $1,000.





on Upstart





on Best Egg



Best Egg
4.5 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account the factors we believe to be beneficial to consumers, including impact to credit score fees and rates customers' experience, and responsible lending practices.



4.5 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration aspects we consider to be consumer-friendly, including the impact on credit score rate and fees, customer experience and ethical lending practices.


APR 8.99-35.99%


Amount of loan $2,000 - $50,000





on Best Egg





on Discover



Discover
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula takes into account aspects we consider to be a good choice for consumers, such as the impact on credit score, rates and fees customers' experience, and ethical lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account aspects we believe are friendly to consumers, such as the impact on credit score, fees and rates, customer experience and ethical lending practices.


APR 6.99-24.99%


The loan amount is $2,500 to $35,000





on Discover





on Achieving



Reach your goals
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring algorithm takes into consideration aspects we believe are friendly to consumers, such as the impact on credit score, fees and rates, customer experience and ethical lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration factors we consider to be friendly to consumers, such as the impact on credit score, rates and fees, customer experience and responsible lending practices.


APR 7.99-29.99%


Loan amount $5,000 - $50,000





on Achieving





on SoFi



SoFi
5.0 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including impact to credit score, fees and rates as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring algorithm takes into consideration factors we consider to be beneficial to consumers, including the impact on credit score, fees and rates as well as the customer's experience and responsible lending practices.


APR 7.99-23.43%


Loan amount $5,000 - $100,000





on SoFi











on Universal Credit



Universal Credit
4.5 NerdWallet's ratings are determined by our editorial staff. The scoring formula takes into account factors we consider to be beneficial to the consumer, including the impact on credit score, fees and rates as well as the customer's experience and responsible lending practices.



4.5 NerdWallet's ratings are compiled by our editorial staff. The scoring formula considers the factors we believe to be consumer-friendly, including impact to credit score rates and fees, customer service and ethical lending practices.


APR 11.69-35.93%


Loan amount $1,000 - $50,000





on Universal Credit





on Discover



Discover
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula takes into account factors we consider to be beneficial to the consumer, including impact on credit score, rates and fees, customer experience and responsible lending practices.



5.0 NerdWallet's rating is determined by our editorial team. The scoring formula is based on factors we consider to be consumer-friendly, including the impact on credit scores rate and fees, customer service and ethical lending practices.


APR 6.99-24.99%


Loan amount $2,500 - $35,000





on Discover





on Upstart



Upstart
4.5 NerdWallet's ratings are compiled by our editorial staff. The scoring algorithm takes into consideration aspects we believe are friendly to consumers, such as the impact on credit score, rates and fees customers' experience, and ethical lending practices.



4.5 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including impact to credit score, fees and rates customers' experience, and ethical lending practices.


APR 6.5-35.99 percent


The amount of the loan is $1,000.





on Upstart





on Achieving



Achieve
5.0 NerdWallet's rating is determined by our editorial team. The scoring algorithm takes into consideration aspects we consider to be consumer-friendly, including the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring algorithm takes into consideration the factors we believe to be a good choice for consumers, such as the impact on credit score rate and fees as well as the customer's experience and ethical lending practices.


APR 7.99-29.99%


Amount of loan: $5,000 - $50,000





on Achieve





on SoFi



SoFi
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula is based on aspects we consider to be beneficial to consumers, such as the impact on credit score, rates and fees, customer experience and responsible lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula is based on factors we consider to be friendly to consumers, such as the impact on credit score, fees and rates customers' experience, and ethical lending practices.


APR 7.99-23.43%


The loan amount is $5,000 to $100,000.





on SoFi





on Best Egg



Best Egg!
4.5 NerdWallet's ratings were determined by our editorial staff. The scoring algorithm takes into consideration aspects we consider to be consumer-friendly, including the impact on credit score, rates and fees customers' experience, and responsible lending practices.



4.5 NerdWallet's ratings were determined by our editorial staff. The scoring formula takes into account factors we consider to be beneficial to the consumer, such as impact on credit score, fees and rates as well as the customer's experience and responsible lending practices.


APR 8.99-35.99%


Amount of loan $2,000 - $50,000





on the Best Egg











on LightStream



LightStream
5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration the factors we believe to be beneficial to the consumer, including the impact on credit score, fees and rates as well as the customer's experience and ethical lending practices.



5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula is based on the factors we believe to be consumer-friendly, including impact to credit score, fees and rates, customer experience and responsible lending practices.


APR Rates mentioned are for AutoPay. 6.99-23.99%


Loan amount $5,000 - $100,000





on LightStream





on SoFi



SoFi
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula is based on the factors we believe to be friendly to consumers, such as the impact on credit score, rates and fees customers' experience, and ethical lending practices.



5.0 NerdWallet's ratings are compiled by our editorial team. The scoring algorithm takes into consideration aspects we consider to be beneficial to consumers, including the impact on credit score rate and fees, customer experience and responsible lending practices.


APR 7.99-23.43%


Loan amount $5,000 - $100,000





on SoFi





on Universal Credit



Universal Credit
4.5 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration the factors we believe to be consumer-friendly, including impact to credit score, rates and fees, customer experience and responsible lending practices.



4.5 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration aspects we believe are consumer-friendly, including impact to credit score, rates and fees as well as the customer's experience and ethical lending practices.


APR 11.69-35.93%


The amount of the loan is $1,000.





on Universal Credit





on LendingClub



LendingClub
5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration the factors we believe to be beneficial to consumers, including the impact on credit score, rates and fees, customer experience and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial team. The scoring formula is based on factors we consider to be consumer-friendly, including the impact on credit scores rates and fees, customer experience and responsible lending practices.


APR 8.3-36.0%


Amount of loan: $1,000 - $40,000





on LendingClub





on Upstart



Upstart
4.5 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including the impact on credit score, fees and rates, customer experience and ethical lending practices.



4.5 NerdWallet's ratings were determined by our editorial team. The scoring algorithm takes into consideration factors we consider to be friendly to consumers, such as the impact on credit score, rates and fees customers' experience, and ethical lending practices.


APR 6.5-35.99 percent


Amount of loan: $1,000 - $50,000





on Upstart


















Do you want to consolidate debt? Find out if you qualify for an debt consolidation loan.
Answer a few simple questions and you'll receive personalized results of our loan partners.


The loan amount
on NerdWallet








4. You can apply for a loan

If you're ready collect documents like evidence of identity or address proof, as well as income verification.
Take the time to read carefully the loan contract's small print. Find any that could affect the amount of the loan and determine if the lender makes timely repayments to all three main credit bureaus, which can help build your credit.
If you aren't meeting the requirements of your lender, you should consider including a credit score of good credit on your loan application. This will help you obtain a loan that you would not be eligible for on your own.
>> COMPARE:
5. Close the loan and pay the loan back

After you've discovered and been approved for the loan you want There's a crucial step left.
If the lender allows direct payment, it will disburse your loan proceeds to your creditors, paying off the old debts. Check your accounts for an empty balance, or contact each creditor to ensure your accounts are paid.
If the lender fails to pay you back, then the debt will be repaid using the money that's transferred to your account at the bank. Make this payment immediately to avoid additional interest on your old debts and reduce the temptation to use the loan money on something else.
Then, within 30 days after receiving the debt consolidation loan, make your first payment.
>> MORE:


About the authors: Steve Nicastro is a former NerdWallet expert on personal loans and small-business loans. Its work was highlighted by The New York Times and MarketWatch.


Jackie Veling covers personal loans for NerdWallet.







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