Turn three card payments into one fixed payment with an end date
A debt consolidation loan of $1,000–$5,000 pays off high-interest cards and replaces them with a single installment loan: one due date, a fixed APR and a payoff date you can see. It works when the new APR is lower than the cards' and you stop adding new balances.
When consolidation actually saves money
Consolidation is a maths problem, not a magic trick. It helps in three situations and hurts in two.
- Your cards charge 24–30% APR and you can qualify for a loan under that
- You have $1,000–$5,000 across two or more balances and pay only minimums
- You want one payment on one date instead of juggling due dates
- You will keep the cards open but stop carrying balances on them
- The loan APR would be higher than your cards' — bad credit with 20% cards, for example
- You would run the cards back up after paying them off
- Your balances are under $1,000 — just pay them down
- You could get a 0% balance-transfer card and clear the debt in 12–18 months
A real $2,500 consolidation, month by month
Three balances at card rates versus one consolidation loan at 19.99% APR, both paid off over 24 months.
$136.23
$127.23
Monthly payment for typical consolidation amounts
Consolidation amounts cluster between $2,000 and $5,000. Compare the row for your credit tier with the combined minimums you pay today.
| Credit tier · term | $2,000 | $3,000 | $4,000 | $5,000 |
|---|---|---|---|---|
| Good credit (670+)9.99% APR · 24 months | $92.28 | $138.42 | $184.56 | $230.70 |
| Good credit (670+)9.99% APR · 36 months | $64.52 | $96.79 | $129.05 | $161.31 |
| Fair credit (620–669)17.99% APR · 24 months | $99.84 | $149.76 | $199.68 | $249.60 |
| Fair credit (620–669)17.99% APR · 36 months | $72.29 | $108.44 | $144.59 | $180.74 |
| Average (580–619)24.99% APR · 24 months | $106.73 | $160.10 | $213.47 | $266.83 |
| Average (580–619)24.99% APR · 36 months | $79.51 | $119.26 | $159.02 | $198.77 |
| Bad credit (<580)35.99% APR · 24 months | $118.08 | $177.13 | $236.17 | $295.21 |
| Bad credit (<580)35.99% APR · 36 months | $91.60 | $137.39 | $183.19 | $228.99 |
How consolidation works through True Finance
You choose the amount that clears the balances; the lender either pays your creditors directly or deposits the funds for you to pay them.
- Add up the balancesList each card, its balance and APR. Request the total (up to $5,000), rounded up for any fees.
- Compare the offer to your cardsThe offer shows one APR and payment. Use the before/after example above to check it beats what you pay now.
- Pay off the cardsSome lenders pay creditors directly; otherwise pay each card in full the day funds arrive.
- Keep cards open, balances at zeroClosing cards can lower your score. Keep them open, unused or paid in full monthly.
- Government ID and Social Security number
- Recent statements for each balance you want to consolidate
- Proof of income and an active checking account
- Creditor names and account numbers if you want direct payoff
Consolidation only works once
The failure mode is predictable: the cards get paid off, feel empty, and fill back up. Twelve months later there is a loan payment and new card balances.
Decide before you request what the cards are for afterwards: emergencies only, or a single recurring bill paid in full each month.
- Set card autopay to "statement balance" so nothing carries
- Move the loan due date to the day after payday
- Track one number: total debt, checked monthly
- If a balance creeps back, pay it off with the next paycheck, not the next loan
Consolidation loan vs. other ways to clear card debt
The right tool depends on your credit and how much you owe.
| Option | Best credit fit | Typical cost | Time to debt-free | Trade-off |
|---|---|---|---|---|
| Consolidation loan (True Finance) | Fair–bad | 5.99–35.99% APR fixed | 12–36 months | Needs an APR below your cards |
| 0% balance-transfer card | Good (670+) | 0% for 12–21 mo + 3–5% fee | 12–21 months | Rate jumps after promo; needs good credit |
| Debt management plan (nonprofit) | Any | Reduced APRs + small monthly fee | 3–5 years | Cards closed; affects new credit |
| Pay highest-APR card first (avalanche) | Any | Current APRs | Varies | Requires paying more than minimums |
| Debt settlement | Poor | Fees 15–25% of debt | 2–4 years | Credit damage, tax on forgiven debt |
Read the consolidation offer like a lender
Total cost over the same term
Compare the loan's total repayment with what the cards would cost over the same months, not with the minimums.
Origination fee
A 5% fee on $4,000 is $200 out of the funds. It is included in the APR, but make sure the net amount still clears the balances.
Direct pay vs. deposit
Direct creditor payment removes the temptation to spend the funds. Ask for it if the lender offers it.
Prepayment
Paying extra should go to principal with no penalty; confirm in the agreement.
Autopay discounts
Some lenders take 0.25–0.5% off the APR for autopay. Take it if your budget is stable.
Debt consolidation questions
Whether it saves money, how it affects your score and what happens to the cards.
Does a debt consolidation loan hurt my credit?
Briefly. The hard inquiry and new account can cost a few points, but paying off revolving balances lowers your utilisation, which usually raises the score within a couple of months.
Can I consolidate debt with bad credit?
Yes, but check the APR. Bad-credit consolidation offers often land at 30%+, which may not beat your cards. It can still be worth it for one fixed payment and a payoff date.
How much can I consolidate?
Up to $5,000 through True Finance. For larger balances, a bank or credit union personal loan or a debt management plan fits better.
Should I close my cards after paying them off?
Usually not. Closing cards reduces available credit and raises utilisation. Keep them open with zero balances unless you cannot resist using them.
Will the lender pay my creditors directly?
Some do; it is called direct pay. If not, funds land in your account and you pay each card yourself, ideally the same day.
Is a balance-transfer card better?
If you qualify (usually 670+), a 0% promo for 12–21 months is cheaper. If you cannot clear the balance in the promo window or do not qualify, a fixed-rate loan is safer.
How long does consolidation take?
Decision in minutes, funds the next business day. Direct creditor payments can take a few extra days to post.
See your consolidation offer
Request $1,000–$5,000, compare the APR with your cards, and pay them off in one move. Free to check, no impact to your credit score.