Can I get a loan to pay off other loans?

Yes, absolutely. Getting a new loan specifically to pay off other existing loans is the primary purpose of a debt consolidation loan. Lenders understand this goal and often structure these loans to make the process easy, sometimes offering to send payments directly to your old creditors on your behalf. This is a very common and legitimate financial strategy for simplifying debt management and potentially lowering your overall interest costs.

Is it bad to have multiple personal loans at a time?

It's not inherently 'bad,' but it can be problematic. Having multiple loans can complicate your budget, increase the risk of a missed payment, and may mean you're paying higher interest rates than necessary. The main risks are the administrative hassle and the potential for a high cumulative monthly payment burden. If you are managing them all successfully and they served a good purpose, it's not a failure. However, if you feel overwhelmed, that's a sign that consolidation could be a beneficial move.

Will consolidating my personal loans hurt my credit score?

There can be a temporary, small dip in your credit score when you first take out the new loan. This is because of the hard credit inquiry and the new account on your report. However, over the long term, consolidation can actually help your credit score. By making consistent, on-time payments on your new single loan, you build a positive payment history. Additionally, simplifying your finances makes it less likely you'll miss a payment, which is one of the biggest factors that can hurt your score.

What's the difference between this and consolidating credit card debt?

The principle is the same, but the type of debt is different. This page focuses on consolidating multiple installment loans—loans with fixed payments and set terms. Credit card consolidation deals with revolving debt, where balances and minimum payments can fluctuate. While a single personal loan can be used for both, the calculations and benefits can differ. Consolidating installment loans is often about simplifying fixed payments, whereas consolidating credit cards is usually focused on escaping high, variable interest rates.

How does 'debt stacking' relate to this type of consolidation?

'Debt stacking' is a term used to describe the situation of having multiple loans and lines of credit piled on top of each other. A loan to consolidate multiple personal loans is a direct solution to the problems caused by debt stacking. Instead of a precarious stack of debts, consolidation restructures them into a stable foundation with a single payment, a clear payoff date, and a fixed interest rate. It's a strategic move to de-stack your debts and regain control.

Can I consolidate loans that are from many different lenders?

Yes, that is one of the primary benefits. Your existing personal and installment loans can be from any number of different banks, credit unions, or online lenders. The new consolidation loan provides you with the funds to pay all of them off, regardless of their origin. You'll just need to provide the payoff amounts for each of the old loans during the application process.

What happens to my old loan accounts after consolidation?

Once your old loans are paid off with the funds from your new consolidation loan, they will be officially closed. They will appear on your credit report as 'Paid in Full' or 'Closed,' which is a positive status. It's a good practice to verify with each of your old lenders that the account has a zero balance and is closed to avoid any confusion or lingering payments.

Get One Loan to Pay Off Multiple Loans

For borrowers with several existing installment loans, combining them can simplify payments and may lower your total interest. Stop the debt stacking and get a single, clear payment.

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Juggling Multiple Loans is Stressful. We Get It.

My budget is a mess with so many different due dates to track.
Our process helps you roll everything into one predictable monthly payment with a single due date.
I feel like I'm just treading water with high interest rates.
A single consolidation loan could offer a lower overall APR than your current mix of rates, saving you money.
Applying for another loan feels like 'debt stacking' and makes me nervous.
This isn't just another loan; it's a strategic tool to simplify and potentially reduce your debt's total cost.
I don't know which of my small loans to pay off first for the best impact.
Consolidation makes the decision for you, clearing the board with one new loan so you can focus on one goal.

From Chaos to Clarity: How Loan Consolidation Works

If you're managing several personal or installment loans, you're familiar with the monthly juggle: multiple payments, different interest rates, and due dates scattered across the calendar. This situation, sometimes called 'debt stacking', can be both confusing and costly. A loan to consolidate multiple personal loans is a specific financial tool designed to solve this exact problem. It's a new, single personal loan large enough to pay off the outstanding balances of your existing loans.

The core idea is simplification. Instead of sending payments to several different lenders, you'll make one fixed monthly payment to one lender. This not only streamlines your budget but can also provide a clear end date for your debt. For many borrowers, the goal is also to secure a lower annual percentage rate (APR) than the weighted average of their current loans, which can lead to significant savings on interest over the life of the loan. This is not a magic solution, but a strategic transfer of debt designed to put you in a more manageable financial position.

Combine Your Loans in 3 Simple Steps

1
Check Your Rate Online
Fill out our short form with your desired loan amount and some basic information. This takes about two minutes and won't affect your credit score.
2
Review and Select Your Offer
If you pre-qualify, you'll see your potential loan amount, APR, and monthly payment. Choose the option that works best for your budget.
3
Pay Off Your Old Loans
Once approved, funds can be sent either directly to your old lenders to pay them off or to your bank account for you to distribute.

Ready to See Your New Payment?

It takes just a few minutes to see what you could save. No obligation, no credit score impact.

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Understanding the Costs: A Consolidation Example

Visualizing the numbers can make the benefits of consolidation clearer. Let's look at a hypothetical scenario for a borrower juggling three separate loans. While your actual rates and savings will vary based on your credit profile and the offers you receive, this example illustrates the potential for simplification and savings.

Hypothetical Consolidation Scenario

Loan 1 (Personal Loan) $4,000 balance @ 22% APR	$4,000
Loan 2 (Installment Purchase) $7,500 balance @ 18% APR	$7,500
Loan 3 (Retail Financing) $3,500 balance @ 25% APR	$3,500
Total Combined Debt	$15,000

Estimated monthly

~$349/mo

New 5-year consolidation loan @ 14% APR

In this example, the borrower combines $15,000 of debt into a single new loan. By securing a 14% APR, they could potentially save thousands in interest compared to continuing with the higher-rate loans. More immediately, they replace three separate payments with one predictable monthly bill, making budgeting significantly easier. Remember to also factor in any origination fees, which are typically deducted from the loan proceeds.

Loan amount: $10,000 – $75,000
APR: 7.99% – 35.99%
Term: 24 mo – 84 mo

Your actual Annual Percentage Rate (APR) will depend on your credit score, loan amount, loan term, credit usage, and history. Only borrowers with excellent credit will qualify for the lowest rates.

Find Out if Consolidation is Right for You

Get a clear picture of your options with no commitment. See what rate and term you could qualify for.

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Is a Consolidation Loan the Best Strategy?

While getting a single loan to pay off other loans is a powerful strategy, it's not the only one. Understanding the alternatives helps you make the most informed decision for your financial situation. Consider how consolidation compares to other methods like the 'debt snowball' or 'debt avalanche' approaches, which involve paying off your existing loans one by one without taking on a new loan.

Consolidation Loan vs. Other Strategies

	Consolidation Loan	Debt Snowball/Avalanche	Doing Nothing
Simplicity	High (One Payment)	Low (Multiple Payments)	Low (Multiple Payments)
Interest Savings	Potential for savings	No rate change	No rate change
Structure	Fixed term & payment	Variable timeline	Perpetual payments
Best For	Simplifying finances & lowering rates	Highly disciplined budgets	High-stress situations

Who Qualifies for a Consolidation Loan?

Credit Score: Most lenders look for a score of 600 or higher. A score above 680 will generally unlock more favorable rates and terms.
Verifiable Income: You'll need to demonstrate sufficient and stable income to comfortably afford the new, single monthly payment.
Debt-to-Income Ratio (DTI): Lenders prefer a DTI below 40-50%, including the new loan. This shows you're not over-extended.
Total Loan Amount: The sum of your existing loan balances must fall within the lender's allowed range (e.g., $10,000 to $75,000).
Credit History: A consistent history of on-time payments on your existing loans is a strong positive signal to potential lenders.

Avoid These Common Consolidation Pitfalls

A consolidation loan is a fresh start, but it's important to approach it with a solid plan to avoid common mistakes.

Ignoring the Total Cost: Don't just focus on the lower monthly payment. If you choose a much longer loan term, you could end up paying more in total interest, even with a lower rate. Always compare the total cost of the new loan against your current path.
Racking Up New Debt: Consolidating pays off your old loans, which might free up your ability to borrow again. Avoid the temptation to take on new debt, as this defeats the purpose of consolidation and can worsen your financial situation.
Forgetting About Fees: Some personal loans come with origination fees, typically 1% to 8% of the loan amount, which is deducted from your proceeds. Make sure you account for this fee when determining how much you need to borrow to cover all your old debts.

Example scenario

I had four different loans with due dates all over the month. It was impossible to keep track. Rolling them into one payment was a huge weight off my shoulders. I finally feel in control of my finances again.

David M.·Mechanic & Homeowner, Ohio

Still have questions?

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Consolidating Multiple Personal Loans: Your Questions Answered

Can I get a loan to pay off other loans?
Yes, absolutely. Getting a new loan specifically to pay off other existing loans is the primary purpose of a debt consolidation loan. Lenders understand this goal and often structure these loans to make the process easy, sometimes offering to send payments directly to your old creditors on your behalf. This is a very common and legitimate financial strategy for simplifying debt management and potentially lowering your overall interest costs.
Is it bad to have multiple personal loans at a time?
It's not inherently 'bad,' but it can be problematic. Having multiple loans can complicate your budget, increase the risk of a missed payment, and may mean you're paying higher interest rates than necessary. The main risks are the administrative hassle and the potential for a high cumulative monthly payment burden. If you are managing them all successfully and they served a good purpose, it's not a failure. However, if you feel overwhelmed, that's a sign that consolidation could be a beneficial move.
Will consolidating my personal loans hurt my credit score?
There can be a temporary, small dip in your credit score when you first take out the new loan. This is because of the hard credit inquiry and the new account on your report. However, over the long term, consolidation can actually help your credit score. By making consistent, on-time payments on your new single loan, you build a positive payment history. Additionally, simplifying your finances makes it less likely you'll miss a payment, which is one of the biggest factors that can hurt your score.
What's the difference between this and consolidating credit card debt?
The principle is the same, but the type of debt is different. This page focuses on consolidating multiple installment loans—loans with fixed payments and set terms. Credit card consolidation deals with revolving debt, where balances and minimum payments can fluctuate. While a single personal loan can be used for both, the calculations and benefits can differ. Consolidating installment loans is often about simplifying fixed payments, whereas consolidating credit cards is usually focused on escaping high, variable interest rates.
How does 'debt stacking' relate to this type of consolidation?
'Debt stacking' is a term used to describe the situation of having multiple loans and lines of credit piled on top of each other. A loan to consolidate multiple personal loans is a direct solution to the problems caused by debt stacking. Instead of a precarious stack of debts, consolidation restructures them into a stable foundation with a single payment, a clear payoff date, and a fixed interest rate. It's a strategic move to de-stack your debts and regain control.
Can I consolidate loans that are from many different lenders?
Yes, that is one of the primary benefits. Your existing personal and installment loans can be from any number of different banks, credit unions, or online lenders. The new consolidation loan provides you with the funds to pay all of them off, regardless of their origin. You'll just need to provide the payoff amounts for each of the old loans during the application process.
What happens to my old loan accounts after consolidation?
Once your old loans are paid off with the funds from your new consolidation loan, they will be officially closed. They will appear on your credit report as 'Paid in Full' or 'Closed,' which is a positive status. It's a good practice to verify with each of your old lenders that the account has a zero balance and is closed to avoid any confusion or lingering payments.

Take the next step toward a simpler financial life

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.