Debt consolidation is the process of taking out one loan to pay off two or more unsecured debts.If you have multiple outstanding credit card bills, for example, a debt consolidation loan could be used to pay off those bills, leaving you with only one monthly payment.
Consolidation works best when your ultimate goal is to become debt-free.
Paying off credit card debt with a debt consolidation loan on Upstart can save you money, time and help build your credit.** Amounts paid are based on a loan of ,000 and assumes the borrower pays it off by making fixed monthly payments of 0. The credit card loan has our borrowers' average credit card APR of 22% (as of January 2015), as estimated by us using information obtained in connection with borrowers' applications.
Debt consolidation loans allow borrowers to roll multiple old debts into a single new one, ideally at a lower interest rate.
You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.
The interest rate depends on your credit profile, and it usually doesn’t change during the life of the loan.