22.15%Average APR on card accounts paying interest (Q2 2026)
5.96%Lowest starting APR among lenders compared
$2,729Saved vs. cards with a 12% 3-year loan in our example
7.084%Average HELOC APR, Oct. 6, 2026
Key takeaway: Debt consolidation saves money only when the new rate, after fees, is clearly lower than what you pay now and you don’t stretch the term too far. In our $15,000 example, a 12% personal loan over three years cost about $2,700 less than paying the cards at the average 22.15% card rate, but the same loan over five years saved only about $650, and a high-fee loan cost more than the cards. A 0% balance transfer was cheapest if you can clear it before the promotion ends.
How we put this guide together: Lender rates and fees come from NerdWallet’s October 2026 comparison and lender sites. Risk guidance comes from the Consumer Financial Protection Bureau (CFPB), the card-rate benchmark from the Federal Reserve’s G.19 release, and home equity averages from MonitorBankRates.com. Our cost table uses standard loan math with the assumptions listed. All figures were checked in October 2026; rates and fees change often, so confirm with each lender. See our advertiser disclosure.

Four ways to consolidate

“Debt consolidation company” can mean very different things. Here are the main routes, from lowest to highest risk to you.

  • Personal loan: a fixed-rate, fixed-term installment loan that pays off your cards. Many lenders will send money straight to your creditors.
  • Balance transfer card: moves card balances to a new card with a 0% introductory APR, usually for a fee.
  • Debt management plan (DMP): a nonprofit credit counseling agency negotiates lower rates with your card issuers, and you make one monthly payment to the agency. It isn’t a loan.
  • Home equity loan or HELOC: borrowing against your house. Lower rates, but your home becomes collateral.

Be careful with ads that say “consolidation” but ask you to stop paying creditors and deposit money into a special account. The CFPB warns that some of these are debt settlement companies. Settlement is a different product with different risks, covered in our debt relief guide.

Personal loan lenders compared

These lenders all offer loans that can be used for debt consolidation and can pay creditors directly. Your actual rate depends on your credit, income and debts; the lowest APRs go to the strongest applicants.

LenderAPR rangeOrigination feeLoan amountsTermsMin. credit score
Happen Bank (formerly LendingClub)5.96%–35.99%0%–8%$1,000–$75,0002–7 years600
SoFi6.99%–35.49%0%–7% (9.99% on loans via Cross River Bank)$5,000–$100,0002–7 yearsNone stated
Discover6.99%–24.99%None$2,500–$40,0003–7 years660
Best Egg6.99%–35.99%0.99%–9.99%$2,000–$50,0003–5 years600
Upgrade7.74%–35.99%1.85%–9.99%$1,000–$75,0002–7 years600
Happy Money8.95%–35.99%Charged; can be high$5,000–$50,0002–5 years620
Universal Credit11.69%–35.99%Charged$1,000–$50,0002–5 years560

Source: NerdWallet best debt consolidation loans and consolidation loan pages (October 2026); Upgrade fee from Upgrade’s help center. Snapshot as of early October 2026.

Three things the table doesn’t show:

  • Origination fees come out of your loan. Upgrade, for example, deducts its fee before sending funds. To pay off $15,000 with a 6% fee, you need to borrow about $15,957.
  • Fees raise the real cost. The APR includes the fee, so compare APRs, not interest rates.
  • Prequalify first. Most online lenders show estimated rates with a soft credit check, which doesn’t affect your score. Our personal loans guide covers more lenders.

What consolidation actually costs: a worked comparison

Assume $15,000 of credit card debt. The Federal Reserve reports that card accounts paying interest averaged 22.15% APR in the second quarter of 2026 (the Fed’s August 2026 reading was slightly higher, at 22.36%). Here is what each option costs in total at 22.15%.

OptionMonthly paymentTotal paidCost above $15,000
Keep the cards at 22.15%, paid off in 36 months$574$20,665$5,665
Personal loan, 12% APR, no fee, 36 months$498$17,936$2,936
Same 12% loan stretched to 60 months$334$20,020$5,020
Loan at 18% interest plus 6% origination fee, 36 months$577$20,768$5,768
Balance transfer: 5% fee, 0% for 21 months, paid in full$750$15,750$750
DMP at 7.99%, 48 months, $40 setup + $30/month fee$396$19,054$4,054

Source: our calculations using standard amortization. Card rate from Federal Reserve G.19 (Q2 2026). Loan rates are illustrative. DMP rate and fees from NerdWallet’s debt management example; balance transfer terms reflect typical 21-month, 5%-fee offers listed by NerdWallet in October 2026.

What the numbers show:

  • A lower rate on the same timeline is where the savings come from. The 12% loan over 36 months saved about $2,700.
  • Stretching the same loan to 60 months cut the payment from $498 to $334 but erased most of the savings.
  • A high-fee loan at a rate close to your card rate can cost more than doing nothing.
  • The balance transfer was cheapest, but it needs $750 a month. Any balance left after month 21 starts accruing the card’s regular APR.

Balance transfer cards

Balance transfer fees typically run 3%–5% of the amount moved, with a $5–$10 minimum, according to Experian. No-fee transfer cards are rare. As of October 2026, NerdWallet listed several cards with 0% periods of about 21 months, including Citi Diamond Preferred, BankAmericard, Wells Fargo Reflect, Chase Slate and U.S. Bank Shield, mostly with a 5% fee.

The CFPB flags the catches: the promotional rate ends, new purchases on the card may not get a grace period, and a payment more than 60 days late can let the issuer raise the rate on your whole balance. Divide your balance plus the fee by the number of promo months to see the payment you need. See balance transfer cards and balance transfer vs. personal loan for more detail.

Debt management plans through nonprofit counselors

A DMP doesn’t require good credit, which makes it the main option when loan offers come back at 30%-plus APRs. According to NerdWallet:

  • Plans usually last 3–5 years.
  • Enrollment fees are typically $35–$40 and monthly fees $25–$31.
  • Card issuers often cut rates sharply; NerdWallet’s example drops a 23.99% APR to 7.99%.
  • Enrolled card accounts are usually closed, which can cause an initial score dip. The DMP notation itself is treated as neutral by major scoring models.

Look for an agency accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America. The CFPB notes that nonprofit counselors can offer free help with budgeting and repayment.

Home equity loans and HELOCs: lower rate, bigger risk

As of October 6, 2026, MonitorBankRates.com reported average rates of 7.084% APR for HELOCs and 6.872% for home equity loans. That is far below card rates, but the CFPB lists serious trade-offs:

  • “If you don’t pay back the loan, you could lose your home in foreclosure.” Card debt is unsecured; this turns it into debt backed by your house.
  • Closing costs can run from hundreds to thousands of dollars.
  • If home prices fall, you could owe more than the home is worth, making it hard to sell or refinance.
  • Equity you use now isn’t available for emergencies or repairs later.

The CFPB also notes that home equity loans may have upfront fees and costs, so compare more than the monthly payment. Running card balances back up after moving them to your home is the worst outcome: you would owe both.

How to compare consolidation offers

  1. List every debt with its balance, APR and minimum payment. Add up the total you need to pay off.
  2. Prequalify with several lenders. SoFi, for example, says its prequalification uses a soft credit pull that doesn’t affect your score; the full application then triggers a hard inquiry.
  3. Size the loan for the fee. If the fee is deducted from proceeds, borrow enough to cover the payoff amount, then check the APR on that larger amount.
  4. Compare total cost, not the payment. Multiply the monthly payment by the number of months and add any fees. Compare that to what you’d pay keeping your current debts on the same timeline.
  5. Use direct payment to creditors if the lender offers it, so the money goes where it should.
  6. Close the gap that caused the debt. Decide what you’ll do with the paid-off cards before you take the loan.

When consolidation doesn’t help

  • The spending gap is still there. The CFPB says consolidation “won’t help you get out of debt unless you reduce your spending or increase your income.” Start with a budget.
  • The new APR isn’t much lower. With fair or poor credit, offers near 30%–36% APR won’t beat a 22% card rate.
  • Only the payment drops. A lower payment from a longer term often means more total interest.
  • You can pay it off in a year anyway. A focused plan like the avalanche method may cost less than fees.
  • You can’t afford any realistic payment. Talk to a nonprofit credit counselor about a DMP or other options before borrowing more.

Before you apply, try calling your card issuers. The CFPB suggests asking about a lower rate, waived fees or a different due date. It costs nothing to ask.

Frequently asked questions

Does debt consolidation hurt your credit?

Prequalifying uses a soft credit check that doesn't affect your score, but a full application involves a hard inquiry that can. Paying off cards with a loan lowers card utilization, which generally helps over time if you don't run the balances back up.

What credit score do I need for a debt consolidation loan?

Minimums vary. In NerdWallet's October 2026 comparison, Universal Credit listed 560, several lenders 600, Happy Money 620 and Discover 660; SoFi listed no minimum. The lowest APRs go to applicants with strong credit.

Is a balance transfer better than a personal loan?

If you qualify and can pay the balance plus a 3%-5% fee before the 0% period ends, a transfer usually costs less. A loan gives a fixed payment and end date, which helps if you need more time.

Should I use home equity to pay off credit cards?

Rates are lower (about 7% for HELOCs in early October 2026), but the CFPB warns you could lose your home if you can't repay, and closing costs can run into the thousands.

What is a debt management plan?

A plan arranged by a nonprofit credit counseling agency. Your card issuers may lower rates and waive fees; you make one monthly payment to the agency for 3-5 years. Fees are typically $35-$40 to enroll and $25-$31 a month.

Is debt consolidation the same as debt settlement?

No. Consolidation repays your full balances, ideally at a lower rate. Settlement tries to pay less than you owe, usually after you stop paying, which damages credit and can lead to fees, lawsuits and taxes on forgiven debt.

Sources

Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.