I’m Having Problems Finding a Cheap Debt Consolidation Loan


Dear Steve,

I am trying to find a good debt consolidation loan.

I’m trying to find a good loan to pay off two small personal loans and a few credit cards. Unfortunately, I use credit karma and the Experian app and get sent to high near payday loan rates.

Any suggestions.




Dear Ken,

It sounds as if your credit score might be less than stellar. There are several reasons this can happen. For example, maybe one of the following statements fits your situation:

  • Your current available credit might be over-utilized, and more than 30 percent of your limit is extended.
  • You have not worked to build a strong credit history, so your credit score has lagged behind.
  • You might have active delinquent accounts like something in collections.
  • Maybe your credit history is a bit vacant or does not have a history of old, still open accounts to show longevity.

An unsecured debt consolidation loan is the riskiest form of lending, and the rates will be the highest to deal with that risk. Payday loan rates sound about right these days.

If you are a credit union member, you might find their rates lower.

In general, lower rates are available for secured loans like a house or vehicle. In this case, the creditor risk is reduced because they can take back the home or vehicle if they fail to pay.

In my experience, people desperate for a cheap debt consolidation loan often fall into the payday or easy loan trap.

The way to logically tackle this situation is to improve your credit score first and then check back in to find a lower-priced loan. Heck, follow my free guide and improve your credit for free.

Since you already have access to Credit Karma, you can use their credit score simulator tool to see what changes will improve your score.

See also  Rita Asks "Should We Consolidate Our Debt?"


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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.
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