Is Debt Consolidation Right for You?

By Sabrina Guerin

Man standing at kitchen counter with coffee cup and cell phone using laptop and looking to side thinking.

If you feel overwhelmed managing multiple monthly payments across different credit cards and loans, debt consolidation could help you simplify things.

Debt consolidation is a strategy that combines multiple debts — like credit cards, personal loans, or medical bills — into one new loan. Instead of juggling different due dates and interest rates, you’ll have just one monthly payment to manage.

If you qualify, debt consolidation can lower your overall interest rate, which could help you pay off your debt faster and save money in the long run.

Benefits of consolidating your debt

One predictable payment each month
A lower interest rate (depending on your credit history)
A clearly structured payoff timeline
Simplified budgeting

What to do before you apply for a debt consolidation loan

Know your numbers. List all debts, minimum payments, interest rates, and due dates. You can use our current debt worksheet to get started.
Check your credit report. This will give you a complete view of your debt and can reveal anything you may have missed. Use AnnualCreditReport.com for free reports from all three major credit bureaus.
Review your budget. Do the math with our loan consolidation calculator, and be sure you can afford the new monthly payment.
Decide if this is a risk for you. Take an honest look at your spending history and be honest with yourself. If you miss a payment toward the consolidated loan, you could land in a worse financial position than before consolidating.

Curious how much you could save? : Crunch the numbers with our loan consolidation calculator.

Potential drawbacks of debt consolidation

Debt consolidation might not make sense in every situation. Take a look at the potential drawbacks along with your personal finance history and decide if the benefits outweigh the risks.

High fees may be charged. Avoid high-fee lenders. If a company asks you to pay money before you’ve received your loan, it’s likely a scam.
Missed payments will cost you. Don’t use consolidation as a quick fix. It only works to your advantage if you can avoid accumulating new debt on any other credit cards or personal loans.
Secured loans come with risk. If you decide on a secured consolidation loan and use your home as collateral and fall behind with payments, you could face foreclosure.

Taking the first step to debt consolidation

Debt consolidation can be a smart, empowering choice, especially when done through a trusted institution like your credit union.

Check Virginia Credit Union’s personal loan rates and compare your options. Be informed. Be selective. We can help you understand your options, so you can find a debt strategy that supports your long-term financial wellness.

Alternatives to debt consolidation

If you’re unable to qualify for a debt consolidation loan, there are other options you can explore to tackle debt, such as a debt management plan.

A debt management plan lets you make one monthly payment through a credit counseling agency. The payment goes to your creditors (often at lower interest rates and fees), and unlike a debt consolidation loan, you don’t take on new debt — you just pay off what you already owe in a more manageable way. We’ve partnered with GreenPath Financial Wellness, a trusted national nonprofit, to offer you free individualized counseling and guidance, including debt management plans.

Last Updated: November 7, 2025