I’m Wondering is a Debt Consolidation Loan is a Good Idea to Pay Off My Debt. – Kristen

“Dear Steve,

So a few years ago I got credit card happy and racked up high amounts of debt. I had help paying some of them and then paid a lot myself recently. After reviewing my credit report. I think I might have 1-3 credit cards to pay. I am wondering if a debt consolidation program would be good for this?


Dear Kristen,

Congratulations on a job well done. Just make sure you don’t close your oldest cards as you pay them off. That credit history will help you to improve your credit score.

There are unsecured debt consolidation loans available from groups like LendingClub.com and Prosper.com but if it is a good idea or not would depend on what your current interest rates are versus what the loan rate would be. That’s really going to be dependent on your credit score. The higher your credit score, the lower the interest rate.

Here is what LendingClub.com has to say on the score versus rate issue.

Alternatively, you could always look at a free service like that offered by ReadyForZero.com to help repay the remaining debt in the most efficient manner for the least amount of cost in interest to you with your current cards.

But if you are using the term, debt consolidation program, to refer to either a credit counseling or debt settlement program, and you are able to pay more than the minimum each month on your debt and save money at the same time, then I don’t think those would be my suggestion.

So as you can see, there are some real options to maximize the remaining repayment of your debt.

Please post your responses and follow-up messages to me on this in the comments section below.


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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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