Information on consolidating credit card loans

You’ll also have to avoid the temptation of making further charges during that time. Fixed payments ensure that you’ll pay off debt on a set schedule.

Debt consolidation is a strategy to roll multiple old debts into a single new one.

A loan with a longer term may have a lower monthly payment, but it can also significantly increase how much you pay over the life of the loan.

View the Total Cost of Borrowing Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you.

Consolidation is not right for everyone, make a decision that's right for you. Your payments will remain the same until all the creditors are paid off. You must keep up with your monthly statements and forward them to the consolidation agency. You can't use your credit card until you're done with the debt management plan. A debt management plan is not bankruptcy, but it will appear negatively on your credit report. Here's what you need to know about consolidating accounts through a debt management plan with an agency. Instead, they have preset arrangements with most financial institutions, many of which lower interest rates and fees, so more of your payment goes toward the balance rather than finance charges. With something as precious as your finances, be exceedingly careful about who you work with.

When you're choosing the term of a loan, consider the total amount of interest and fees you’ll pay.

With a debt management plan, you make one payment to the credit counseling agency, which distributes the money to your creditors until they are paid in full.

Even if they are members of such organizations, though, be picky. So while the agencies and employees vary, the plans are all structured the same way: Your counselor determines how much it will take to pay your creditors in full in three to five years.

Debt consolidation is a third-party payment system. Agencies range in quality so make sure you shop around. Most debt consolidation plans are structured the same way. They ensure member agencies pass rigorous standards set forth by the Council on Accreditation or another approved third party, and that their counselors pass a comprehensive certification program. Financial institutions don't give preferential treatment to any one organization, nonprofit or otherwise.

However, if you just happen to have accounts with creditors that don't offer any concessions, that benefit is reduced. Look for a nonprofit credit counseling organization that belongs to either the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

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