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3 Strategies for Consolidating Debt

January 23, 2014 by Lucy Lazarony

3 Strategies for Consolidating Debt

Are you tired of juggling all your loans and credit card balances? These three debt consolidation strategies can help simplify your plan to get debt-free.

1. Consolidate Your Credit Cards

Rather than pay five credit card bills each month, why not pay one? Consolidate all those smaller credit card balances onto a single card and simplify your finances while also getting a lower interest rate on your balances.

There are plenty of credit cards with low-rate balance transfer offers. You may even qualify for a card with a 0% rate for 12 or 18 months.

Make the most of that rock-bottom interest rate and pay off as much of your debt as you can during the low-rate balance transfer period.

2. Apply for a Personal Loan

Use a personal loan from a bank or credit union to consolidate credit cards and other debt. Personal loans have fixed interest rates that are traditionally lower than credit card interest rates. Once you qualify for the loan you can choose a loan amount and monthly payment amount that fits your budget.

Pay as agreed on a personal loan and all the debt that you consolidated will be paid in full at the end of the loan term.

You'll need excellent credit to qualify for the lowest interest rate on a personal loan. So be sure to check your credit scores with's free Credit Report Card before you apply. This completely free tool will break down your credit score into sections and give you a grade for each. You'll see, for example, how your payment history, debt and other factors affect your score, and you'll get recommendations for steps you may want to consider to address problems. In addition, you'll also find credit offers from lenders who may be willing to offer you credit. Checking your own credit reports and scores does not affect your credit score in any way.

3. Get a Line of Credit

Use a personal line of credit from a bank or credit union to consolidate your debt. You don't need to own a home or property to qualify for a personal line of credit and you may be able to get a credit decision and access to the cash you need to pay off other debts in just a couple of days.

You borrow money from your personal line of credit by writing a check or making a transfer to your checking account.

The interest rate you pay on a line of credit depends on your credit. And you may qualify for additional discounts on the interest rate if you have deposit or other accounts at the bank or credit union. Be sure to ask.

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Meet Our Experts

Lucy Lazarony Lucy Lazarony is a freelance personal finance writer. Her articles have been featured on Bankrate, MoneyRates, MSN Money, and The National Endowment for Financial Education. Prior to freelancing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American International University in London. She lives in South Florida.

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