How To Consolidate Bills Into One Payment (2023)

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Debt consolidation is a debt management strategy that can simplify and improve creditworthiness. Consumers can reduce their overall interest rate and make budgeting easier by combining multiple forms of consumer debt into a single loan or balance transfer credit card with one monthly payment.

What Is Debt Consolidation?

Debt consolidation is a debt management strategy that can streamline monthly payments and improve your creditworthiness. It lets consumers combine multiple debt obligations into one loan with a single payment.

Personal loans are often used for consolidating different types of debt, including:

  • Credit cards
  • Unsecured personal loans
  • Medical bills
  • Payday loans
  • Private student loans

Debt consolidation is a valuable strategy for those struggling to manage multiple payments with different interest rates and timelines. Having multiple loans or credit cards can make it difficult to keep track of due dates, fees and interest rates. Debt consolidation helps simplify debt into one monthly payment with just one set of fees and a single interest rate.

A debt consolidation loan or balance transfer credit card may also result in a lower monthly payment and a more competitive interest rate. Depending on the terms available, combined debts can be repaid more quickly while saving on interest—or over a more extended period to access a lower monthly payment. Eliminating separate balances can also make it easier to focus on reducing your total debt as it allows you to track progress in one place.

5 Steps To Consolidate Bills Into One Payment

By following the proper steps for consolidating your bills into one payment, you can gain control of your financial situation and save money in the long run. The debt consolidation process varies by lender and loan type, but there are a few general steps to follow.

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1. Gather Billing Statements

Start the debt consolidation process by collecting all of your outstanding balances and identifying the monthly payment amounts and interest rates. Also, create a budget and understand how much money you can allocate toward repaying debt each month.

2. Calculate Your Total Debts

Calculate the total amount of your existing debts, their interest rates, payment amounts and due dates to understand what you’re up against. This can help you choose a lender or credit card company with sufficient borrowing limits to consolidate your debts. Doing so can also help you identify an interest rate and repayment term that will fit your budget and help you save money.

3. Compare Consolidation Options

Research options for consolidating debt, like taking out a personal loan or getting a balance transfer credit card. Compare options based on qualification requirements, available interest rates and repayment terms.

Many online lenders offer prequalification without a hard credit inquiry. This can be a good way to check the rates you’re likely to qualify for. Also consider whether each lender offers direct payment to third-party creditors and if credit card companies charge balance transfer fees or offer 0% introductory annual percentage rates (APRs).

4. Submit an Application

Once you identify a lender that meets your needs, start the formal application process. For a personal loan, this may require compiling financial information, including tax returns, bank statements and other documents. Depending on the lender, you may receive same-day approval, but it can take several days to complete.

Credit card applications are typically more straightforward and offer almost instant credit decisions. Some balance transfer credit cards also require you to enter the balances you plan to transfer as part of the application process.

5. Pay Off Individual Balances

Use funds from your consolidation loan or balance transfer to pay off all other debts once they become available. After paying off the debts, make sure there aren’t any remaining balances before closing old accounts associated with them. If you’re consolidating credit card balances, consider leaving the cards open to maintain your available credit, but make sure you don’t use them and stay disciplined when repaying the debt.

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Once you consolidate your bills, pay attention to when your combined payment is due. Then, make regular payments on the new personal loan or credit card until you fully repay it.

Lenders That Offer Debt Consolidation Loans

Debt consolidation is a popular financial strategy that can help individuals gain control of their finances and pay down debt more quickly. Moreover, the best debt consolidation loans offer personal loans with competitive interest rates, high borrowing limits and flexible repayment terms. Consider these lenders if you’re planning to consolidate bills into one payment.

Top Lenders That Offer Debt Consolidation Loans

Company Loan amounts Minimum credit score
Achieve $7,500 to $40,000 620
Discover $2,500 to $40,000 660
Upgrade $1,000 to $50,000 580
Universal Credit $1,000 to $50,000 560
Happy Money $5,000 to $40,000 640
Best Egg $2,000 to $50,000 640
LendingClub $1,000 to $40,000 600
Lightstream $5,000 to $100,000 660
SoFi $5,000 to $100,000 650

Benefits of Debt Consolidation

Debt consolidation is a powerful tool for managing and reducing debt. It can simplify budgeting, reduce interest accrual and make budgeting easier. That said, there are both pros and cons of debt consolidation to consider before making a decision.

These are some of the main benefits of debt consolidation:

  • Simplifies debt management. Debt consolidation simplifies payments and tracking progress by combining multiple debts into one loan with a single payment.
  • Reduces the stress of having multiple payment schedules. Having multiple loans or credit cards can make it challenging to keep track of due dates, fees and interest rates. Debt consolidation helps simplify the process, so you only have one monthly payment with one set of fees and a single interest rate.
  • May lower the overall interest rate. The combined loan from debt consolidation often has a lower interest rate than separate accounts on each individually owed debt. This can lead to potential savings in the long run.
  • Helps make budgeting for repayment easier. Eliminating separate balances lets you focus on reducing your total debt more efficiently by allowing you to track progress in one place.

Before considering debt consolidation, also consider the downsides. Consolidating bills into one payment does not necessarily mean you’re eliminating debt; it simply means that you are restructuring your payments to make them more manageable. Moreover, if you obtain a personal loan or open a balance transfer credit card with an interest rate higher than your current individual rates, this could cost you more money in the long run.

Debt Consolidation Loan vs. Credit Card

Consider these factors when choosing between a debt consolidation loan versus a credit card.

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Introductory APRs

Balance transfer credit cards with 0% APR introductory periods can be a great way to consolidate bills into a single payment. This type of card typically offers an interest-free period during which the consumer is not charged any interest on transferred balances from other cards or loans.

Combined with the fact that many balance transfer cards also offer lower ongoing interest rates, this creates a great opportunity to take advantage of more desirable fees and terms on a debt consolidation repayment plan. Paying off multiple debt obligations without incurring interest charges throughout the introductory period can significantly reduce overall debt amounts, resulting in short- and long-term savings.

Interest Rates

Carefully consider available interest rates when choosing between a debt consolidation loan or a balance transfer credit card. Generally speaking, debt consolidation loans have lower fixed interest rates (between 6% and 36%) than balance transfer credit cards (between 15% and 30%). This is because larger debt consolidation loans may come with lower borrowing costs, and lenders may offer more competitive interest rates.

On the other hand, balance transfer credit cards usually offer an introductory promotional rate for new customers, which is often very low but only lasts for a limited time. Weigh your needs and make financially responsible choices based on your situation.


If you want to consolidate multiple bills into a single payment, consider additional costs associated with different types of loan and credit options. A balance transfer credit card is often more accessible and convenient than a debt consolidation loan but usually has a balance transfer fee of around 3% or 5% of the transfer amount.

Debt consolidation loan companies and other lenders often charge an origination fee for processing paperwork and covering additional administrative costs. These fees typically equal between 1% and 8% of the total loan amount and are deducted from the loan proceeds at funding.

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Borrowing Limits

The average balance transfer credit card limit is typically lower than the amount offered by debt consolidation loans. While personal loans may be available up to $100,000, limits usually max out around $10,000 for standard balance transfer cards. This means that if you have particularly high levels of debt, more than one balance transfer credit card may be required to cover the full amount.

As such, investigate options such as your potential loan limit and how much debt you’re trying to consolidate before deciding which option is best for you. Careful consideration of these two factors can help ensure that you find a financially feasible and personally beneficial approach to reducing your monthly payments and consolidating your bills.

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