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Consider Debt Consolidation

See if debt consolidation is right for you with three easy steps

Consider debt consolidation video

Should you consider debt consolidation?

Debt consolidation may be a good option if you’re trying to pay off high-interest loans and credit cards and managing multiple monthly payments.
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How you may benefit from debt consolidation

Paying off multiple debts with a new loan and a single payment monthly may help you:

  • Lower your overall monthly expenses and increase your cash flow
  • Reduce stress with fewer bills to juggle
  • Reach savings goals more quickly with any extra cash you save
  • Lower your credit utilization ratio, which may help improve your credit score

Consolidate debt one step at a time

1. Take inventory of your debt

  • Check your credit score and debt-to-income ratio to see where you stand
  • Make a list of each loan and credit card balance, including the interest rate and monthly payment. The most common debt to consolidate is credit card debt, since it typically has some of the highest interest rates. You can also include other types of debt, such as personal loans, payday loans or medical bills.
  • Calculate the totals for both outstanding balances and monthly payments

2. Explore your debt consolidation options

  • How it works: Once you know your numbers, you can start looking for a new loan to cover the amount you owe on your existing debts. If you're approved for the loan, you'll receive loan funds to use to pay off your existing debts. Then you start making monthly payments on the new loan.
  • Consider your options. Wells Fargo offers a personal loan option for debt consolidation. With this type of unsecured loan, your annual percentage rate (APR) will be based on the specific characteristics of your credit application including an evaluation of your credit history, the amount of credit requested and income verification. Some lenders may have secured loan options which may offer a slightly lower interest rate, but keep in mind you are at risk of losing your collateral if you fail to repay the loan as agreed.
  • Use our online tools. Wells Fargo customers can use the Check my rate tool to get personalized rate and payment estimates with no impact to their credit score. Funds are often available the next business day, if approved

3. Know before you borrow

If you decide debt consolidation is right for you, keep the following in mind:

  • Debt consolidation isn’t debt elimination. You’re restructuring your debt, not eliminating it.
  • Understand the costs. Consider the total cost of borrowing. A loan with a longer term may have a lower monthly payment, but it can also increase how much you pay over the life of the loan.
  • Avoid future debt. Use good credit habits and create a budget to help control future spending.
  • Review alternative methods to pay down debt. If a consolidation loan is not right for you, compare the Snowball vs Avalanche methods of paying down debt.

  Need help?  

If you’re facing financial challenges, don't wait – lenders want to work with you. Visit Wells Fargo Assist page or the National Foundation for Credit Counseling for help.