Your credit scores can take a hit if you use all or most of the available credit on your cards.A personal loan balance is reported as installment debt, which is treated differently in credit scoring formulas than revolving debt such as credit cards.
This debt consolidation calculator is designed to help determine if debt consolidation is right for you.
Fill in the loan amounts, credit card balances and other outstanding debt.
Other options for borrowers with bad credit include secured or co-sign personal loans.
Some lenders say they have no minimum credit score requirements, but that does not mean they don’t check your credit report.
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.
Once the introductory period expires, the rate on a balance transfer card is usually higher than on a personal loan.
In addition to paying off your balance before the rate increases, you’ll want to avoid making further charges.
Discover Card is serious about safeguarding your personal information online.