I Have Multiple Loans. Can I Combine Them Into One?

6 minute read | 10/10/19Oct. 10, 2019

I receive this question often from FBZ readers: 

If I have multiple loans, can I combine the loans into a single payment?

My answer: Great question. A lot of people find themselves in a situation like yours, and even asking about this is an amazing start to getting on the right financial track. Put simply, yes, you can combine all loans into one.

If you think this might make sense for you, read on to learn how to get started (and what to avoid).

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What you’re looking for is called “debt consolidation.”

When you're struggling with debt and not sure where to turn, these companies can help.

Debt consolidation combines multiple loans into one bigger loan from a single lender. Then, the single lender pays off the balances on the other loans, sometimes at a lower interest rate. They may also offer alternative repayment plans that make your monthly payments more affordable.

💡 Debt consolidation is also known as loan consolidation, debt negotiation, debt settlement, repayment plans, or debt relief

Think of it like all of your loans and debts being combined into one. Making a single payment instead of multiple each month can keep you motivated and help your situation feel more easily manageable. 

How to get started with consolidating debt

Whatever you do, please do not ignore your bills.

I know, I know. But I've done the same thing and can promise you, nothing good comes from putting off your bills.

Here's what to do instead –

1. Contact your creditors and let them know your situation

Don't be embarrassed, even if you have no income. They won't judge you for your financial problems. They just want you to repay the loan!

Your creditor may have ways to help you lower your payment, which they can explain to you over the phone.

2. Then, decide if consolidation makes sense

Debt consolidation can be an incredible opportunity if you do it right.

Many people report feeling less stressed once they group all their loans into one larger loan. It's more manageable and easy to remember.

It's good to note, however, that not all debt relief companies and plans are the same. You need to find the right debt relief solution, and just as importantly, the right debt relief company, to work with in order to address your financial needs.

Securing a lower payment with consolidation has many positives, but also means you'll stay in debt longer since they're all rolled into one. The longer you stay in debt, the more you pay to the lender over time. This alone shouldn't deter you from choosing debt consolidation if it's the right solution for you though. In fact, this is the reason the debt consolidation industry exists! 

Many people find this solution fits their current needs and helps them take a step in the right direction. 

What kind of debt can be consolidated?

All types of unsecured debt, as well as certain secured debts, are eligible for debt consolidation. The most common type of debt stems from people with multiple high-interest credit cards carrying high balances they haven't been able to pay off.

What is the best debt consolidation company?

The best debt consolidation companies will work with you to figure out what type of consolidation may help you the most. The opportunities available to you really depend on the type of loans you have, and what your loan repayment terms could be – typically between 5 and 20 years, depending on the amount of debt you have and the type of consolidation you choose.

Compare our top debt consolidation companies and take charge of your financial future >>>

Best debt consolidation loans

Student Loans

According to Goldman Sachs, out of the $1.3 trillion in student loan debt in America, an estimated $211 billion could be refinanced at a lower rate. This includes $150 billion in federal loans.

Federal loans, loans that are issued by the government, can be consolidated into one loan. The interest rate on the new loan will be the weighted average of the interest rates of the loans you're consolidating. Never pay any company a fee to consolidate a federal student loan. Simply go to studentloans.govto find out your options.

Another option for student loans is to refinance them. When you refinance, your loans are consolidated at a new interest rate. This can be a great way to lower your interest rate or reduce your monthly payments by extending your payment period. Refinancing is available for both federal loans and private loans, but be aware that you will lose certain protections on your federal loans, like income-based repayment options, if you refinance them. You'll also need good to great credit to qualify for refinancing. 

 One of our favorite sites for refinancing student loans is Credible.com.Credible is free to use with no hidden fees. I like it because you only have to fill out one form to get access to multiple lenders. Otherwise, you'll have to go to each lender's website directly and fill out their applications.

According to Credible's website, the average savings is $18,668. See how much you might be able to save in just two minutes.

Credit, Auto, Home Loans, Tax Relief, and Other Debt Consolidation

If you have other types of loans, working with a top-rated debt consolidation company may be the best answer to reduce your debt payments and help you avoid bankruptcy.

If you've ever googled "debt consolidation," then you've probably come across some of the companies out there, many of which have bad customer reviews. I would never recommend any service I wouldn't use myself!

All of our top debt consolidation companies offer free savings estimates with no obligation. 

If you do decide to use a debt consolidation company, there will likely be a nominal monthly fee. While there may be a fee, when you compare it versus your loan savings, it's usually minimal. Be sure to always check the fine print.

An alternative option: personal loans

Traditional loan consolidation may not be the most affordable option for you, depending on the interest rates involved.

If you are very cautious about your finances and can 110% manage your expenses, then a personal loan may be a more affordable option.

Top-rated companies like Lending Tree and Lending Club offer personal loans up to $25,000 and $40,000 respectively. You could use a personal loan to pay down your debts as long as you do it responsibly.

Personal loan rates can be as low as 6.09% APR, depending on your credit score and history.

Common questions about combining loans

Does consolidation hurt your credit score?

Taking out a loan or opening a new credit card will result in a hard inquiry which can temporarily lower your score. Longer term, any impact to your credit score (positive or negative) will be determined by which method you use to consolidate your debt and whether you make your payments on time.

Is it smart to consolidate your student loans?

Student loan consolidation can be a smart decision for many borrowers. Consolidation can lead to lower, and simplified, monthly payments. But, consolidation doesn’t always result in a lower interest rate and extending payment over a longer period of time increases the amount of interest you’ll pay.

Will my credit score go down if I pay off a loan?

Your credit score usually goes down when you pay off any type of debt because your credit utilization goes up. But, this dip in credit score is usually temporary and your credit score can rebound quickly if you continue to make on-time payments on your other debt.

One Last Thing...

Before you decide to use any of the options above, make sure you're genuinely committed to getting out of debt. This means avoiding taking on any more debt and aggressively cutting back on unnecessary expenses.

Even after debt consolidation, continually monitoring your finances will help make sure you don't get into debt ever again.

Once you have the right mindset, you'll be unstoppable!

Great for Over $25K in Debt


  • Minimum Debt: $25,000
  • Resolve your debt in as little as 24 - 48 months
  • They've helped save their clients over $2 billion
  • Over 600,000 customers and counting
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