How Can I Get a Loan to Consolidate Bills?

A debt consolidation loan can be a stress reliever.

A debt consolidation loan can be a stress reliever.

It starts with a loan here and a credit card there, but before you know it you feel the strain of a heavy debt load. Maybe you've given up hanging out with friends or fixing up your home because of all the bills you have to pay. Perhaps you've grown tired of the hours spent crunching the numbers and writing checks. A debt-consolidation loan can provide an answer, allowing you to write just one monthly check to cover all your debts and possibly pay less in interest.

Gather all your debt documents, including bills, statements and loan papers. Use them to calculate your total debt.

Create and print a document that includes all the debts you hope to cover with the loan. Include the name and contact information for each creditor, the balance on each account and the account numbers.

Figure out your current income and expenses each month. Include only your regular household and work-related expenses. Do not include the debts you hope to consolidate. This will help you determine how much you can afford as a debt-consolidation payment each month.

Request a copy of your credit report from Experian, TransUnion and Equifax. You can get a free credit report from each of these agencies via AnnualCreditReport.com. Review each report to look for discrepancies and outright errors. If a report contains mistakes, request corrections. Errors that show a high debt-to-income ratio or late payments might hurt your chances of getting a debt-consolidation loan at a rate you can afford.

Decide which type of debt consolidation loan you want. For credit-card debt, consider transferring the balances to one low- or zero-interest credit card. If you have other types of debt or a mixture of credit-card and loan debt, consider a personal or home-equity loan to consolidate them.

Gather the documents the debt-consolidation lender will require. This often includes photo identification, recent pay stubs, your last two tax returns if you are self-employed and 60 days' worth of bank statements. If you apply with a spouse or another joint debtor, provide documentation for each of you. A lender may also request other documents that help prove your identity, income and assets.

Fill out and sign a debt-consolidation loan application as required by the lender. Some of them allow borrowers to apply online, while others only accept applications in person or via snail mail.

Evaluate the loan offer you receive. Compare your current debt payments with the monthly amount you would pay with the consolidation loan. Then compare the total you'll pay over the life of your loan versus the total amount you'd pay if you kept your debts separate. If the loan offer doesn't allow you to breathe easier by paying less each month and paying less interest in the long run, pass on it. Use a debt-management worksheet to determine whether your loan offer represents a deal or a dud.


  • Visit the websites of lenders to research information about debt-consolidation loan companies. You can also find debt-consolidation lenders in your local phone directory.
  • Check the websites of the lenders that interest you for information on application requirements, rates and terms. If you cannot find the information online, you can also call lenders and request it. You want a loan company likely to accept your credit that offers low interest rates and favorable loan terms.


  • Think twice before using your home equity as collateral for a debt-consolidation loan. If you can't repay the loan, you risk losing your home.

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About the Author

Jordan Meyers has been a writer for 13 years, specializing in businesses, educational and health topics. Meyers holds a Bachelor of Science in biology from the University of Maryland and once survived writing 500 health product descriptions in just 24 hours.

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