Does consolidating credit card debt hurt credit score
So unless you’re expecting a windfall from a long-lost relative (who probably didn’t talk about money either), it’s up to you to come up with a game plan to manage your finances.
Committing a portion of every salary increase to paying down credit cards and personal loans is the obvious solution, but it isn’t the only option.
Of course, everyone’s situation varies, but you can use So Fi’s personal loan payment calculator to do the math on your own personal loans.
In doing this they effectively bring all these debts together into one combined loan with one monthly payment.
Since this is bringing multiple debts together and combining them into one loan, this is referred to as “consolidating” them. In reality, it’s actually technically impossible to combine loans and merge them together.
People get debt consolidation loans for a number of reasons: When you receive a traditional debt consolidation loan, the company lending you the money either uses the funds to pay out the debts you jointly agree will be paid off, or they deposits the funds it in your bank account and it is then your responsibility to pay out the debts or bills you wish to consolidate with the loan proceeds.
Interest rates for debt consolidation loans are primarily determined by two factors: your credit score and the collateral you can offer for the loan.