How Debt Consolidation Works
Instead of managing several payments, the borrower uses one new loan to combine debts into a single repayment schedule.
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What Borrowers Should Compare
- ✓ Whether the new APR is actually lower than current debt costs.
- ✓ Origination fees and total financed cost.
- ✓ Monthly payment impact.
- ✓ How long repayment will last.
- ✓ Whether closing credit card balances will improve or worsen behavior over time.
Why a Payoff Plan Still Matters
Consolidation simplifies payments, but lasting improvement usually also requires spending control and a plan to avoid rebuilding debt after balances are paid off.