Debt settlement companies negotiate with creditors to repay less than you owe, in return for a substantial cut of the savings.Damage to your credit is severe, and the process can take years.Just make sure this consolidation is part of a larger plan to get out of debt and you don’t run up new balances on the cards you’ve consolidated.More When consolidating debt, balance transfer cards let you shift over debts from other cards and charge no interest for a limited time.You make a single payment to the agency, which pays creditors on your behalf.Typically you can’t use credit cards while participating, and a large percentage of participants don’t complete the plan.Any comments posted under Nerd Wallet's official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.Our debt consolidation plan is designed to provide a unique solution to your personal financial situation.
If your debt load is small — you can pay it off within six months to a year at your current pace — and you’d save only a negligible amount by consolidating, don’t bother.
You always make your payments on time, so your credit is good.
You might qualify for an unsecured debt consolidation loan at 7% — a significantly lower interest rate.
Try a do-it-yourself debt payoff method instead, such as the debt snowball or debt avalanche.
If the total of your debts is more than half your income, and the calculator above reveals that you can’t pay off your debt in five years, you’re better off seeking debt relief than treading water forever.