Consolidate your debt video
Consolidating multiple credit accounts into one new loan with a single payment may help you lower your overall monthly expenses, increase your cash flow, and eliminate the stress of multiple monthly payments.
Consolidate debt one step at a time
- First, make a list of your loan and credit card balances, with the interest rate and monthly payment for each.
- Consider your consolidation options – both secured and unsecured:
• Unsecured loans allow you to use your good credit to consolidate multiple debts into a single loan with one monthly payment. You may even qualify for an overall lower interest rate than your existing interest rates.
• Secured loans allow you to borrow against the value in your savings account to consolidate multiple debts into a single loan with an interest rate that may be lower than your existing unsecured rates.
• Private student loans allow you to consolidate multiple private student loans into one. At Wells Fargo, you may consolidate jointly with your spouse, and parents may also combine private student loans for multiple children.
- No matter which option you choose the process of consolidation works in much the same way. Instead of multiple debt payments each month, you only have one payment to worry about. Your goal in consolidation should always be to get the lowest interest rate possible. When you find the option that’s right for you, you can use the proceeds to pay off your outstanding balances. Then use any extra cash you save each month to get closer to your savings goals.
Understand the total cost of borrowing
When you're choosing the term of a loan, consider the total amount of interest and fees you’ll pay. A loan with a longer term may have a lower monthly payment, but it can also significantly increase how much you pay over the life of the loan.