The interest rate depends on your credit profile, and it usually doesn’t change during the life of the loan.
Debt consolidation is only one of several strategies for paying off debt.
Student loan borrowers tend be young and inexperienced when it comes to debt, credit, and even basic budgeting.
That can make the transition to repayment after graduation challenging at best.
Look for a site that offers educational tools such as a credit score simulator or guidance on how to build credit.
If you can’t qualify for a loan through a reputable lender, don’t head for a payday lender. For borrowers with good credit, a balance transfer credit card is an alternative to a debt consolidation loan.
In addition to paying off your balance before the rate increases, you’ll want to avoid making further charges.
Borrowers with excellent credit and low debt-to-income ratios may qualify for interest rates at the low end of lenders’ ranges.
Someone with poor or average credit may be able to get an unsecured personal loan on the strength of a steady income and low debt levels, but should expect rates toward the higher end of the range — up to 36%.
With a debt consolidation loan, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards.
You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.