Juggling different bills, due dates, and interest rates can feel like a never-ending cycle, leaving you stressed and overwhelmed. If you find yourself in this situation, a debt consolidation loan could be a helpful tool for regaining control of your finances.

Below, we'll explain how consolidating loans can help you manage and eliminate debt efficiently, setting you on the path to better financial balance.

Key Considerations

Debt consolidation loans combine multiple debts into one manageable monthly payment, simplifying your finances.
Consolidation loans can potentially lower your interest rate.
Understand the relationship between consolidation and credit score to ensure your actions have a positive long-term effect on your score and financial wellbeing.

What is a loan to consolidate other loans?

A loan to consolidate other loans, also called a debt consolidation loan, is a type of personal loan that combines multiple existing debts with varying annual percentage rates (APRs) into one loan with a fixed monthly payment. This can be a smart move if you're looking to streamline your payments and potentially save money on interest, especially if your current debts have high interest rates.

How does loan consolidation work?

Loan consolidation is a fairly straightforward process that typically involves getting a personal loan for debt consolidation. Here, the lender gives you a lump sum of money to pay off your existing debts. Instead of paying multiple creditors each month, you’ll owe one larger amount to the new lender, which you will repay through fixed monthly payments over a set period of time.

While you can also use balance transfer cards to consolidate debt, they may not be the best option if you have a significant amount of debt. Balance transfers come with limits on the amount that can be transferred and a short, no-interest promotional period.

FYI: BHG Financial offers personal loans for debt consolidation with amounts up to $250,000¹ and extended, flexible terms of up to 10 years.^1,2

What types of debt can you consolidate?

All types of unsecured debt, as well as certain types of secured debt, are often eligible for debt consolidation. Generally, people opt to merge multiple loans into one when they have multiple types of high-interest debt and they are looking for easier debt management.

Here's a look at some of the types of debt you can consolidate:

Education and student loans
Other personal loans
Credit cards with high balances
Medical bills
Business debt

What are the pros and cons of loan consolidation? 

Pros of consolidation	Cons of consolidation
One monthly payment is easier to manage than multiple.	If the new loan has a longer repayment term, you could pay more interest over time.
Potentially lower rates than your existing debts, saving you money.	Typically, only prime borrowers secure the lowest interest rates on consolidation loans.
Fixed-rate loans offer consistent monthly payments, making budgeting easier.	Consolidation loans may come with origination fees.
Paying off high credit card balances can help improve your credit utilization ratio, and in turn, positively impact your credit score.	Consolidation doesn’t resolve underlying financial problems. If you don’t adjust your spending habits, you could accumulate debt again.

One of the biggest benefits of a debt consolidation loan is the simplicity it brings. Instead of remembering multiple due dates and minimum payments for various debts, you have just one predictable monthly payment. This can make budgeting much easier and reduce the likelihood of missing a payment, which can result in late fees and damage to your credit.

Consolidating generally only makes sense if you can secure a lower interest rate than your existing debts, allowing you to save interest over time and allocate a larger portion of your monthly payment to the principal.

Making on-time payments on your new loan can also improve your credit score over time by establishing a credit history and reducing your credit utilization ratio. A solid budget and financial discipline can help ensure the impact of loan consolidation on your credit is positive.

That said, it’s important to consider the costs of borrowing before taking out the loan to ensure it’s something you can afford. Debt consolidation loans may come with upfront fees, such as origination fees. These can add to the overall cost of the loan, so it's important to understand all charges before you commit.

How does BHG Financial support debt consolidation?

Advertised rates are subject to change without notice.
Monthly payment is a representative example and for illustrative purposes only.

BHG Financial understands the stress of managing multiple types of debt and selecting the right solution for your financing needs. That’s why we offer personal loans specifically designed to consolidate large amounts of existing debt.

Flexible repayment terms: BHG personal loans come with extended repayment terms of up to 10 years.^1,2 Our loan experts will work with you to establish repayment terms that fit your budget and help keep payments manageable.
Higher loan amounts: Most lenders offer personal loans for debt consolidation up to $100,000, but BHG can fund larger loan amounts up to $250,000.¹
Streamlined application process: Our application process is fast and efficient, allowing you to receive the funds you need quickly. You can prequalify online in minutes, and it will not impact your credit score.³

Our reputation speaks for itself. In fact, BHG’s tailored loan options and concierge loan service have earned us more than 3,600 5-star reviews on Trustpilot.

Ready to see how BHG can help you consolidate multiple loans? Use our quick and easy payment estimator to get your personalized loan estimate in just seconds.

Loan to consolidate other loans FAQ

Does a debt consolidation loan hurt your credit?

When you apply for a debt consolidation loan, lenders will initiate a hard inquiry, which can result in a small, temporary dip in your credit score. However, the long-term impact of loan consolidation on credit can be positive, provided you maintain disciplined financial habits. If you use the loan to pay off high-interest credit card debt, it can help lower your credit utilization ratio and potentially improve your credit score. Additionally, making consistent on-time payments on your new consolidation loan will establish a positive payment history, another key factor in determining your credit score.

How much can I save by consolidating my loans?

The amount you can save by consolidating your loans depends on several factors, including the interest rates of your new consolidation loan and the repayment term you choose. If your new loan has a significantly lower interest rate than your existing debt, you can save a considerable amount on interest charges over time. BHG allows you to prequalify and compare loan offers without affecting your credit score.³

Can I consolidate both personal and credit card debt?

Absolutely! A personal loan for debt consolidation is commonly used to merge various types of unsecured debts, like personal loans, credit card debts, and medical bills, into one payment.

What’s the difference between consolidation and refinancing?

While related, consolidation and refinancing are commonly used to potentially secure better rates or loan terms, they are not quite the same. Consolidation involves combining multiple existing debts into a single new loan, typically to simplify payments and potentially secure a lower interest rate. Refinancing typically involves taking out a new loan to replace a single existing loan—like when you refinance your mortgage to get a lower interest rate or a shorter loan term.

Is there a limit to how many loans I can combine?

You can generally combine as many eligible unsecured debts as you wish, as long as the total amount you need to borrow fits within the lender's loan limits and you qualify based on your creditworthiness and income. Lenders like BHG Financial offer high loan amounts up to $250,000,¹ which can accommodate a significant number of existing debts for those with substantial income.

Not all solutions, loan amounts, rates or terms are available in all states.

* BHG monthly payment based on BHG’s minimum available APR for a 10-year term, which is 14.63% as of 07.01.25 and includes an origination fee. Your actual loan size, loan term, and monthly payment amount may vary based on your individual credit profile and other information provided in your loan application. Terms subject to credit approval.

¹ Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

² Personal Loan Repayment Example: A $59,755 personal loan with a 7-year term and an APR of 17.2% would require 84 monthly payments of $1,228.

³  There is no impact on your credit for applying. For personal loans, a complete credit history, which will appear as an inquiry on your credit report, will be performed upon acceptance and funding of the loan and may impact your credit.

No application fees, commitment, or impact on personal credit to estimate your payment. 

Consumer loans funded by Pinnacle Bank, a Tennessee bank, or County Bank. Equal Housing Lenders.

For California Residents: BHG Financial loans made or arranged pursuant to California Financing Law license - Number 603G493.

If you’re feeling weighed down by credit card debt, you’re not alone. High interest rates can feel like an uphill battle, making it easy to fall behind and tough to catch up.

Understanding how to pay off credit card debt is the first step toward taking control of your debt and reclaiming your financial well-being. Here are a few practical strategies to eliminate credit card debt.

Key considerations

If you have a significant amount of high-interest debt and a good credit score, a debt consolidation loan can be a viable option for paying off credit card debt. For smaller debts, a balance transfer card could help you tackle debt faster.
If not consolidating or using a balance transfer card, set a goal and a budget for repayment; targeting one debt at a time using the snowball or avalanche method can help reduce your balances methodically.
Gradually exceed monthly minimum payments whenever possible to decrease your total interest over time. Even small extra payments can make a big difference in your credit card debt over the long term.

Why is credit card debt hard to pay off?

U.S. credit card balances have surpassed $1.21 trillion, according to the Federal Reserve, driven partially by high APRs.

Credit card debt is difficult to overcome. Even if you don’t make additional purchases, the interest compounds. Only paying the minimum each month means you will carry the debt from month to month, increasing your debt as you accumulate interest charges.

For example, if you’ve amassed $50,000 in credit card debt on a card with a 23% APR, you could pay up to $11,500 per year in interest. Without a plan in place to address the debt proactively, it can become a significant burden.

To start, pay as much as you can toward the debt. Some common ways to do this effectively and consistently include using the debt snowball or debt avalanche method.

What is the debt snowball method?

If you have balances on multiple cards, one of the best strategies to eliminate credit card debt is the snowball method. With the debt snowball method, you pay off the card with the smallest balance first before moving on to the next largest one.

This method is a good choice if you can’t afford to make large monthly payments but want to proactively chip away at your debt. Once you pay off a card, you'll redirect the funds you were using for that payment to your next card balance. You'll continue to do this until you’ve tackled each debt.

Here’s how it looks in action, using the following credit card balances as an example:

Credit card 1: A $5,500 balance and an APR of 16%
Credit card 2: A $2,000 balance and an APR of 20%
Credit card 3: A $10,000 balance and an APR of 23%

Using the snowball method, you’d focus on the second card on this list first because it has the lowest balance ($2,000). Once cleared, you’d move on to the next highest card balance ($5,500) before addressing the third card with a $10,000 balance.

Remember to make minimum payments on all other cards in the meantime; missing any minimum payment can hurt your credit score.

What is the debt avalanche method?

Attacking debt using the debt avalanche method involves paying off the account with the highest interest rate first, regardless of the balance. It can take a while to make progress on —especially if the balance on that card is excessive—but you’ll save money on interest in the long run.

The avalanche method may be a better strategy for you if you can confidently afford a bigger payment and want to pay less in interest while you work to become debt-free.

Here’s how debt avalanche looks in action, using the same credit card balances from above as an example:

Credit card 1: A $5,500 balance and an APR of 16%
Credit card 2: A $2,000 balance and an APR of 20%
Credit card 3: A $10,000 balance and an APR of 23%

Using the avalanche method, you’d tackle the third card first because it has the highest APR (23%). You’d focus on the second card next—APR of 20%—even though it has a lower balance, before moving on to the first card with the lowest APR.

Again, it’s important to focus on making every payment on time to protect your credit score and avoid tacking on additional late fees. It can take a while to knock out the first debt, so patience and consistency is key.

How can debt consolidation help? 

Consolidating personal credit card debt FAQs

Consolidating personal credit card debt can simplify your finances by combining multiple debts into a single monthly payment with more manageable interest rates. In the long run, this can save you from spending more money than you anticipated or previously agreed to on in-terest payments in the future.

Personal debt consolidation can impact your credit score differently depending on the method chosen. For example, applying for a new loan or credit card for consolidation may result in a temporary dip in your credit score due to inquiries, changes in credit utilization, and your his-tory using credit-based financial products. However, making timely payments on the consoli-dated debt can positively affect your credit score by demonstrating responsible financial man-agement.**

Yes, personal debt consolidation can be applied to various types of debt, including personal loans, medical bills, and student loans, in addition to credit card debt. Consolidating multiple debts into a single payment can streamline your repayment process and make it easier to man-age your finances overall.

With highly specialized financing options for accomplished professionals, BHG Financial offers personal loans up to $200K¹ to use as you need them. With repayment terms that last up to 10 years,^1,2you can fully bring your financial plan to action by consolidating your personal debts into a simple and affordable monthly payment to help you achieve financial peace of mind sooner rather than later.

Our payment estimator can help you see your personalized estimate quickly, and our dedicated concierge service team can serve your needs every step of the way.

Debt consolidation involves combining multiple credit card debts into one new account or loan and using it to pay off your existing debts. In many cases, consolidation can save you money because the new product may come with a lower interest rate than the ones attached to your cards. Consolidating debt also simplifies the repayment process because you only need to manage one monthly payment.

Some of the most effective credit card consolidation strategies include using a debt consolidation loan or a balance transfer credit card. The best way to pay off credit card debt will depend on the amount of debt you have, your credit history, and your income level.

If you have a significant amount of high-interest debt and a respectable credit score, a lower-rate personal loan for debt consolidation can be a viable option. Debt consolidation loans, like the ones offered by BHG Financial, have flexible repayment terms1 that help keep your monthly payments low.

Do balance transfers help pay off debt faster?

Transferring your balance from one credit card to another can help you pay your debt faster, as long as the new card comes with a lower rate. If you transfer your balances to a new card with a lower APR, you can allocate a greater portion of your future payments to paying down the principal instead of the interest.

That said, there are a few things to know about the timing of balance transfer credit cards:

You can apply for a balance transfer card in a matter of minutes, but the actual transfer can take anywhere from a few days to several weeks, depending on the credit card company. During that time, you’ll still have to make any payments you owe to your original card company.
Make sure you understand how long the introductory rate lasts, whether there’s a transfer fee, and what the regular rate will be after the promotional period. Introductory rates typically run for a period of six to 18 months, and if you can’t pay off your balance in full, the new rate may be higher than the rate on your old card.

If you worry it may take longer than the intro period to pay off your debt, consider transferring your balance to a debt consolidation loan. BHG offers fixed, affordable payments with terms up to 10 years.^1,2 Plus, dedicated loan specialists provide a concierge loan experience, guiding you through the loan process.

Source: Bankrate, Investopedia - Accessed on 3/14/25
¹ Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

How to pay off credit card debt FAQ

Should I pay off my credit card debt or save first?

It usually makes sense to pay off your debts before saving money, especially if you have high-interest debt. This is because the high interest rates on your accounts will often cost more than the money you can save. For this reason, any money you can afford to save is better allocated to paying off your high-interest debt so that it doesn’t continue to compound.

How can negotiating with creditors reduce my debt?

If card issuers are willing to consider negotiating your credit card debt, you may be able to set up a payment plan, pay off the cards for less than what you owe, or agree to a forbearance. However, there are definite drawbacks to negotiation, as these solutions negatively impact your credit score.

Can I pay off credit card debt without hurting my credit score?

Absolutely! Any moves you make to pay your monthly balances on time can help build a solid payment history and, in turn, improve your credit score. Plus, reducing your credit card balances will lower your credit utilization ratio.

Are debt relief programs worth it?

Debt relief (debt settlement) programs offered by for-profit companies should be viewed as a last resort, and only after you’ve exhausted options for consolidation. Debt relief companies can fast-track getting out of debt, but they often charge high upfront fees, and the process could hurt your credit score. Watch for scams and make sure you understand the potential fees before handing over your finances to a debt relief company.

What if I can't afford minimum payments?

Many creditors are willing to work with you if you cannot afford to pay the monthly minimum payment. Call the company as soon as possible to see what you can work out. If getting a debt consolidation loan isn’t an option for securing a lower minimum payment, you can contact a credit counseling agency, which will help you organize a debt management plan to pay down your debts. Debt relief programs could be considered as a last resort, as they come with drawbacks and can charge exorbitant upfront fees.

How BHG can help you pay off debt faster

At BHG Financial, we believe financing should fit seamlessly into your life and goals. That’s why we offer personal loans tailored to your needs, with amounts up to $200,000¹and flexible terms of up to 10 years.^1,2 Consolidate your high-interest debt with a BHG loan designed to help you move forward confidently.

Plus, you’ll enjoy dedicated, U.S.-based concierge service that works around your schedule—because your time is valuable. Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan estimate in just seconds.

Loan to Consolidate Other Loans: What You Need to Know

Key Considerations

What is a loan to consolidate other loans?

How does loan consolidation work?

What types of debt can you consolidate?

What are the pros and cons of loan consolidation?

How does BHG Financial support debt consolidation?

Loan to consolidate other loans FAQ

Does a debt consolidation loan hurt your credit?

How much can I save by consolidating my loans?

Can I consolidate both personal and credit card debt?

What’s the difference between consolidation and refinancing?

Is there a limit to how many loans I can combine?

Key considerations

Why is credit card debt hard to pay off?

What is the debt snowball method?

What is the debt avalanche method?

How can debt consolidation help?

Consolidating personal credit card debt FAQs

What are the benefits of consolidating personal credit card debt?

How does personal debt consolidation affect your credit score?

Can I consolidate other types of debt besides credit cards?

How BHG Financial can help you consolidate personal credit card debt

Do balance transfers help pay off debt faster?

How to pay off credit card debt FAQ

Should I pay off my credit card debt or save first?

How can negotiating with creditors reduce my debt?

Can I pay off credit card debt without hurting my credit score?

Are debt relief programs worth it?

What if I can't afford minimum payments?

How BHG can help you pay off debt faster

What are the pros and cons of loan consolidation? 

How can debt consolidation help? 