What credit score do I need to consolidate debt?

Approvals start in the low 600s, but rates that actually beat card APRs usually require good credit (670+). Below that, a balance transfer card or a nonprofit debt-management plan may work better.

Debt Consolidation Calculator

Q: Does debt consolidation save money?

Only when the new loan's rate is meaningfully lower than the weighted average rate of your current debts and the origination fee doesn't eat the savings. Consolidating 22% card debt into a 12% personal loan usually saves; consolidating into a similar rate mostly just simplifies payments.

Q: Does consolidation hurt my credit score?

Expect a small temporary dip from the hard inquiry and new account. Over time, scores often improve: card utilization drops to zero and on-time installment payments build history. The danger is running the cards back up afterward.

Would rolling your debts into one loan actually save money? Compare total interest both ways — with the consolidation loan's fee included.

Current debt	Balance	APR %	Monthly payment
Debt 1
Debt 2
Debt 3
Debt 4

Consolidation loan rate

%/yr

Consolidation loan term

Origination fee

Rolled into the new loan

Each current payment must exceed that debt's monthly interest.

Verdict

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New single payment

—

Current payments total

—

Interest — keep as-is

—

Interest + fee — consolidated

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Debt-free (as-is)

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Debt-free (consolidated)

—

When consolidation wins — and when it doesn't

Consolidation saves when: new APR + amortized fee < weighted average APR of current debts

The comparison is honest only if it includes the fee and holds the timeline steady. A lower payment is easy to manufacture with a longer term — that's not savings, that's stretching. This calculator compares total dollars, not just monthly cash flow.

Worked example (defaults above)

$10,500 of card debt averaging ~22.6% APR, paid at $325/mo → about $4,700 interest, debt-free in ~4 years.

Consolidated at 12% over 3 years (3% fee rolled in): payment $359/mo, total cost about $2,400 — roughly $2,300 saved and a year sooner.

The consolidation trap to avoid

Consolidation moves debt; it doesn't erase the habits that created it. The most common failure mode: consolidate the cards, feel relief, then run the newly-empty cards back up — ending with the loan and new card debt. If you consolidate, freeze or close the paid-off cards until the loan is gone, and consider building a small emergency buffer first so surprises don't land on the cards. Compare alternatives: a 0% balance transfer (see credit card payoff), a home equity loan if you own (cheaper, riskier), or simply the avalanche method with no new loan at all.

Frequently asked questions

Does debt consolidation save money?

Only when the new rate (plus fee) is meaningfully below your weighted average current rate — like 22% cards into a 12% loan.

Does consolidation hurt my credit score?

Small temporary dip; often improves later as utilization drops — unless the cards get run back up.

What credit score do I need?

Approvals from ~600s, but rates that beat card APRs usually need 670+.

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Note: Simulation assumes fixed payments and monthly compounding. Actual loan offers vary by credit profile. Not financial advice. Last reviewed: July 2026.