Consolidating my credit cards

Whether consolidating your debt is a good idea depends on both your personal financial situation and on the type of debt consolidation being considered.Consolidating debt with a loan could reduce your monthly payments and provide near term relief, but a lengthier term could mean paying more in total interest.Nerdwallet has reviewed more than 25 lenders to help you compare and choose one that’s right for you.

The first is the kind you describe, where you apply for a personal loan, preferably one with a relatively low interest rate, and then use the money from that loan to pay off all your credit card balances at once.

With a debt consolidation loan, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards.

You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.

Borrowers with excellent credit and low debt-to-income ratios may qualify for interest rates at the low end of lenders’ ranges.

Someone with poor or average credit may be able to get an unsecured personal loan on the strength of a steady income and low debt levels, but should expect rates toward the higher end of the range — up to 36%.

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Such cards have an introductory 0% interest rate, which increases after a promotional period, usually no more than 21 months.

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