I Want to Lower My Overall Interest Rate With a Debt Consolidation Loan


Dear Steve,

I have a good credit score and am paying $4k a month in credit card payments (paying over the required amount), with exceedingly high-interest rates. It makes sense to consolidate all cc debt with a lower interest rate. Right now, I feel like I’m throwing away money.

I get mailers every day from different companies offering to buy my debt. I don’t know who to trust. There is so much false information and so much self-promotion surrounding debt consolidation and I don’t know where to begin. Based on your expert opinion, where should I go to consolidate my cc debt?

Thank you!

Your fan,



Dear Cara,

I’m always surprised by the mailers people send me through my I Buy Junk Mail program. They are full of fantastic claims and do not provide enough information to make an informed decision.

Those mailers you and others get are advertisements. Some claim to be for personal loans and then people are switched to some debt relief program. Other mailers are just for some debt settlement or other debt relief programs but seem to be for a loan or consolidation of some sort.

It is entirely confusing.

I’m assuming you are asking for advice regarding a debt consolidation loan and not a consolidated debt relief program. Do you see how nuanced this gets?

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

An actual loan is the easiest way to evaluate costs since you can look at the interest rate you are offered and compare that to the average interest rate you think you are currently being charged.

Credit card interest rates are variable and the average rate you are being charged has to be weighted based on the balance you are carrying on each card. It’s complicated. But here is an online calculator you can use to figure out exactly what your average combined interest rate is.

One approach to repaying your debt is to divert all the extra money you have each month towards the debt with the lowest balance. This will knock out individual creditors quickly and leave more money each month to attack the remaining bigger balances.

See also  Should I Consolidate My Debt? - Steve

There are mainstream peer-to-peer lenders like Upstart, Prosper, Lending Club, Earnest, and others.

My personal experience is with both Lending Club and Prosper. I did have a loan from Prosper and found the experience efficient and accurate. But that was just my own personal experience.

I was also an investor with Lending Club and watched them make a lot of loans. I’ve also interviewed people with loans from them.

Damon Day - Pro Debt Coach

Follow Me
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Steve Rhode
Follow Me

Comments are closed.