A debt consolidation loan is a personal loan that lets you combine multiple high-interest debts into one fixed monthly payment—often at a lower interest rate.

Debt consolidation loans can simplify your finances by combining several high-cost debts into one. This includes credit cards, store credit cards, gas cards, payday loans, and title loans—all of which often come with high interest rates that can add up fast.

One Easy Monthly Payment: Combining multiple debts into a single loan means no more juggling due dates or managing several bills. It’s a simpler way to stay on top of your payments.

Potential Interest Savings: If you qualify for a lower interest rate, you could reduce the total cost of your debt and pay it off faster—helping you save money in the long run.

Fixed and Predictable Payments: Most debt consolidation loans have fixed interest rates, so your monthly payment stays the same. That consistency makes it easier to plan your budget and know exactly when your loan will be paid off.

Debt consolidation can be a helpful strategy for managing what you owe—but it’s not the right solution for everyone. Before moving forward, it’s important to weigh the potential risks involved. These risks can vary depending on the lender and the loan terms you’re offered.

Fees: Some lenders may charge fees such as loan origination fees, balance transfer fees, or closing costs. These additional charges can reduce the overall savings you might expect from consolidating.

Collateral Requirements: Certain debt consolidation loans—especially secured ones—may require you to offer collateral like a car or home. If you fail to repay the loan, the lender could seize the asset to cover your debt.

There’s no one-size-fits-all amount of debt required to qualify for consolidation—it depends on the lender and your personal financial situation. In general, debt consolidation loans are most useful when you have multiple high-interest debts, such as credit card balances or payday loans, that total at least a few thousand dollars.

Once you’re approved and accept your loan offer, receiving your debt consolidation funds can happen quickly. Many borrowers who’ve gone through Upstart’s platform have received their loan disbursement in as little as one business day.² This fast turnaround can provide much-needed relief, especially if you’re managing multiple bills and high-interest balances.