Can I consolidate loans that are considered 'predatory'?

Yes, absolutely. This is one of the most common and powerful uses for a debt consolidation loan. Predatory loans often have extremely high APRs and unfavorable terms that make them difficult to escape. A personal loan from a reputable lender can provide the funds to pay off that predatory debt in full, replacing it with a loan that has a reasonable, fixed interest rate and a clear, manageable payment schedule.

Will consolidating high-interest loans hurt my credit score?

There can be a small, temporary dip in your credit score when you first take out the new loan due to the hard credit inquiry and the new account. However, over the medium to long term, consolidation can significantly help your credit score. By making consistent, on-time payments on the new loan, you build a positive payment history. Additionally, if you were using consolidation to pay off high-balance credit cards, your credit utilization ratio will decrease, which is a major positive factor for your score.

What is the minimum credit score for a high-interest loan consolidation?

While there's no single magic number, many lenders look for a minimum credit score in the 600-620 range. However, we work with a network of lending partners, some of whom specialize in helping borrowers with fair or poor credit (scores below 600). They will look at your entire financial picture, including your income and ability to repay, not just the score itself. The best way to know for sure is to check your rate, which won't impact your credit.

Is it better to consolidate installment loans or pay them off one by one?

This depends on the interest rates. If you can secure a consolidation loan with an APR that is lower than the average APR of your existing installment loans, consolidation is almost always the better financial move. It saves you money on interest and simplifies your payments. The 'snowball' or 'avalanche' methods of paying loans one by one can work, but they don't lower your interest rates, meaning you'll pay more in the long run compared to a successful consolidation.

What happens to my old loans after I get a consolidation loan?

Once your consolidation loan is funded, the money is deposited into your bank account. It is then your responsibility to immediately use those funds to pay the outstanding balances on each of your old high-interest loans. Be sure to confirm with each old lender that the account is paid in full and has a zero balance. You are then left with only the new, single consolidation loan to manage.

Are there any types of debt I can't consolidate with a personal loan?

Generally, unsecured personal loans are very flexible and can be used to pay off most types of debt, including other personal loans, installment loans, credit cards, and medical bills. However, you typically cannot use a new personal loan to pay off secured debts (like a mortgage or auto loan), student loans, or for illegal activities. The primary use case is for consolidating other unsecured debts.

Consolidate High-Interest & Predatory Loans

Combine multiple expensive loans, including high-APR installment loans, into a single, more manageable monthly payment with a clear end date.

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Feeling Trapped by High-Interest Debt?

My monthly payments are crushing me, and most of it is just interest.
A consolidation loan aims to lower your overall APR, so more of your payment goes toward principal.
I feel like I'm not making any real progress on paying down what I owe.
By combining debts into a single loan with a fixed term, you get a clear payoff date to work towards.
I took out an 'easy' installment loan, but the APR is over 30%.
We specialize in helping people refinance expensive and predatory loans into more affordable financing.
Managing multiple due dates for different high-interest loans is stressful and confusing.
Simplify your finances with one predictable monthly payment, making it easier to budget and stay on track.

Escape the Debt Cycle with a Single, Smarter Loan

If you're juggling multiple high-interest loans—like personal installment loans, cash advance loans, or even debt from predatory lenders—it can feel like you're running on a treadmill. Each month, a huge portion of your payment is eaten up by interest, while the principal barely budges. A high-interest loan consolidation is a financial tool designed specifically to break this cycle. It involves taking out one new, lower-interest personal loan to pay off all your existing high-cost debts at once.

The goal is twofold: simplify your financial life and save you money. Instead of tracking several due dates and balances, you'll have just one fixed monthly payment. More importantly, by securing a lower Annual Percentage Rate (APR) on the new loan than the average rate of your old debts, you can significantly reduce the total amount of interest you pay over time. This strategy empowers you to pay off your debt faster and free up cash flow for other important goals.

How to Consolidate Your High-Interest Loans

1
Check Your Rate in Minutes
Fill out our simple online form with some basic information. This initial step is a 'soft pull' and will not impact your credit score.
2
Review Your Loan Offer
If you pre-qualify, you'll see a specific loan offer, including the loan amount, APR, and term. This is your chance to see exactly how much you could save.
3
Accept & Finalize
Once you accept your offer, you'll e-sign your documents and may need to provide some final verification. The process is fast and entirely online.
4
Pay Off Your Old Debts
Funds are typically sent directly to your bank account within 1-2 business days. You can then use the funds to pay off your high-interest creditors for good.

The Real-World Impact: A Cost Breakdown

It can be difficult to visualize how much a lower APR can truly save you. Let's look at a common scenario for someone with $15,000 in high-interest installment loan debt. The numbers below are for illustrative purposes, but they show the powerful effect of consolidation. Your actual savings will depend on the rate you qualify for.

Example: Consolidating $15,000 in Debt

BEFORE: Installment Loan 1 ($7,000 @ 29% APR) $295 / month
BEFORE: Installment Loan 2 ($5,000 @ 34% APR) $240 / month
BEFORE: Personal Loan 3 ($3,000 @ 25% APR) $120 / month	Total: ~$655 / month
AFTER: New Consolidation Loan ($15,000 @ 16% APR) Single Monthly Payment

Estimated monthly

$364/mo

Based on a 5-year term. Your rate may vary.

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Loan amount: $2,000 – $20,000
APR: 7.99% – 35.99%
Term: 24 mo – 60 mo

Your actual APR depends upon credit score, loan amount, loan term, and credit usage and history. The APR range provided is for unsecured personal loans. Not all applicants will qualify for the lowest rate. All loans are subject to credit review and approval.

The terms you're offered are directly tied to your financial profile. Lenders assess factors like your credit score, income stability, and your debt-to-income (DTI) ratio to determine the level of risk. A higher credit score and lower DTI generally lead to more favorable terms, including a lower APR. Even if your credit is not perfect, many lenders specialize in working with borrowers who are rebuilding their financial standing, offering a viable path away from high-interest debt.

Is a Consolidation Loan the Right Choice?

While a personal loan is a powerful tool for consolidating expensive debt, it's wise to consider it alongside other potential strategies. The best option for you depends on the total amount of your debt, your credit score, and your personal discipline with finances. Below is a comparison of common approaches.

Consolidation Loan vs. Other Options

	Consolidation Loan	Keeping Current Loans	Balance Transfer Card
Typical APR	Fixed, 8-35.99%	Very high, 25%-100%+	0% intro, then 20-30%
Payment Structure	Single, fixed payment	Multiple, often variable	Minimum payments required
Payoff Timeline	Clear end date (2-5 years)	Can take decades	Must clear before intro ends
Best For	Simplifying debt over $2k with a structured plan.	No other options available.	Smaller debts (<$5k) you can pay off in 12-18 months.

What Lenders Look For

Credit Score: A score of 600+ is often the baseline, but some partners consider applicants with lower scores based on other factors.
Debt-to-Income (DTI) Ratio: Lenders want to see that you can comfortably afford the new payment. A DTI below 45% is generally preferred.
Verifiable Income: You'll need to show a steady source of income through pay stubs, bank statements, or tax documents.
Credit History: A history of on-time payments helps, but the main goal is to help you resolve past difficulties with high-interest debt.
Total Debt Amount: The new loan must be sufficient to cover the old debts you intend to consolidate, fitting within the lender's loan limits.

If you're on the borderline, you can strengthen your application by checking your credit report for errors, paying down any small credit card balances, and ensuring all your income is properly documented. Every step you take to present a clearer financial picture can improve your chances of approval and help you secure a better rate.

Find Out What You Qualify For

It's free, fast, and gives you a clear look at your options.

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Common Pitfalls to Avoid When Consolidating

Successfully consolidating your high-interest debt is more than just getting a new loan. It's about changing your financial trajectory. Be mindful of these common mistakes to ensure your consolidation is a true step forward.

Ignoring the Fees. Some personal loans come with an origination fee (typically 1-8% of the loan amount), which is deducted from the loan proceeds. Always factor this into your calculations to ensure the net amount is enough to pay off your debts.
Racking Up New Debt. Once you've paid off old loans or cards, the temptation to use that newly available credit can be strong. The most successful consolidators close the old accounts or commit to not using them to avoid ending up in a worse position.
Choosing the Longest Term Automatically. A longer loan term means a lower monthly payment, which is appealing. However, it also means you'll pay more in total interest over the life of the loan. Balance affordability with the goal of paying the least amount of interest possible.
Not Addressing the Root Cause. A consolidation loan is a powerful tool to fix the math, but it doesn't fix the habits that led to the debt. Use the breathing room it provides to create a budget and build healthier financial habits for the long term.

Frequently Asked Questions

Can I consolidate loans that are considered 'predatory'?
Yes, absolutely. This is one of the most common and powerful uses for a debt consolidation loan. Predatory loans often have extremely high APRs and unfavorable terms that make them difficult to escape. A personal loan from a reputable lender can provide the funds to pay off that predatory debt in full, replacing it with a loan that has a reasonable, fixed interest rate and a clear, manageable payment schedule.
Will consolidating high-interest loans hurt my credit score?
There can be a small, temporary dip in your credit score when you first take out the new loan due to the hard credit inquiry and the new account. However, over the medium to long term, consolidation can significantly help your credit score. By making consistent, on-time payments on the new loan, you build a positive payment history. Additionally, if you were using consolidation to pay off high-balance credit cards, your credit utilization ratio will decrease, which is a major positive factor for your score.
What is the minimum credit score for a high-interest loan consolidation?
While there's no single magic number, many lenders look for a minimum credit score in the 600-620 range. However, we work with a network of lending partners, some of whom specialize in helping borrowers with fair or poor credit (scores below 600). They will look at your entire financial picture, including your income and ability to repay, not just the score itself. The best way to know for sure is to check your rate, which won't impact your credit.
Is it better to consolidate installment loans or pay them off one by one?
This depends on the interest rates. If you can secure a consolidation loan with an APR that is lower than the average APR of your existing installment loans, consolidation is almost always the better financial move. It saves you money on interest and simplifies your payments. The 'snowball' or 'avalanche' methods of paying loans one by one can work, but they don't lower your interest rates, meaning you'll pay more in the long run compared to a successful consolidation.
What happens to my old loans after I get a consolidation loan?
Once your consolidation loan is funded, the money is deposited into your bank account. It is then your responsibility to immediately use those funds to pay the outstanding balances on each of your old high-interest loans. Be sure to confirm with each old lender that the account is paid in full and has a zero balance. You are then left with only the new, single consolidation loan to manage.
Are there any types of debt I can't consolidate with a personal loan?
Generally, unsecured personal loans are very flexible and can be used to pay off most types of debt, including other personal loans, installment loans, credit cards, and medical bills. However, you typically cannot use a new personal loan to pay off secured debts (like a mortgage or auto loan), student loans, or for illegal activities. The primary use case is for consolidating other unsecured debts.

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The application is simple and the clarity you'll get is priceless.

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Take the First Step Toward Financial Control

Consolidating your high-interest loans is more than just a financial transaction; it's a strategic move to regain control over your money. By simplifying your payments and lowering your interest costs, you create the breathing room needed to build a stronger financial future. The journey out of debt begins with a single, informed step. Find out today what options are available to you.

Personal loan disclosure

Money Savvy is not a lender. We are a marketing service that connects consumers with participating lenders. Rates, amounts, and terms vary by lender, your credit history, and other factors.

Loan amounts: $1,000 – $100,000
Repayment terms: 3 – 84 months
Min APR: 5.99%
Max APR: 35.99%
Origination fees: 0% – 10% of the loan amount
Late fees: May apply; vary by lender

Representative example: A $10,000 loan with a 36-month term at an 18.99% APR would have an approximate monthly payment of $366.39 and a total cost of $13,190.04, including interest and a $500 origination fee.

Your actual APR depends on your credit score, income, and other factors. Only borrow what you can afford to repay.

California residents: California Financing Law disclosures available upon request.