Debt consolidation is a method of combining several debts into one. loan or line of credit, which can help simplify monthly payments and save money on interest. 

Many Americans are juggling multiple debts and feeling overwhelmed. In fact, 44% of Americans report having more debt than they're comfortable with, according to a study. study  on Wells Fargo's 2024 money.

By consolidating debts, a person settles multiple debts with a new loan, if possible, with a lower interest rate or more manageable terms. 

“Doing so could give you more leeway in your budget, and you could achieve other financial goals faster with the money you save,” the bank states on its website.

Debt consolidation options

There are several options for debt consolidation, such as:

personal loan:  Take out an unsecured loan to settle existing debts. The consolidation loan has a fixed interest rate and scheduled payments. 

Balance transfer:  apply for a balance transfer credit card and transfer existing balances. 

Debt management program:  work with a credit counselor to negotiate with creditors and reduce interest rates. 

Related:  Can you apply for a mortgage loan with an ITIN number in North Carolina?

Considerations 

• Before consolidating debts, it's important to evaluate the terms and fees of the offer. 
• A credit card may be available to cover unexpected expenses. 
• Your credit score and income will determine whether you qualify for the loan. 
• Consolidating higher-interest debts into a lower-interest loan can help pay off the debt faster.

Take an inventory of your debts 

Wells Fargo recommends that before you consolidate your debts, it's important to take an inventory of your debts. 

"Start by making a list of each of your loans and credit card balances, including outstanding balances, interest rates, and monthly payments," the financial institution says. 

Credit cards are a common form of debt that can be consolidated because they typically have higher interest rates. 

Additional debts could include personal loans, student loans o medical bills. 

"Calculate your total outstanding balances and monthly payments. Then, check your credit score and calculate your debt-to-monthly payment ratio to better understand your situation," the bank advises.

Wells Fargo has a virtual calculator to obtain the relationship between debt and income

What to do before making a consolidation

It's important to note that debt consolidation isn't for everyone. Keep in mind that you're not eliminating a debt, but rather restructuring it. 

You can use a virtual debt consolidation calculator provided by Wells Fargo to see the total cost of your current debt and a consolidation loan. 

Also, you should compare interest rates; there's no guarantee that a personal loan will offer lower rates than the debt you already have. 

Pay close attention to the total cost of the loan, including fees and hidden costs. 

"For example, if you consolidate into a new loan with a longer term, your monthly payment could be lower, but you may end up paying more in interest over the life of the loan," the agency says. 

Consider other payment strategies that might work better, especially if the total cost of consolidation is unmanageable.

Related:  Can I open a bank account if I'm undocumented?

Helps you improve your credit history 

It's worth remembering that debt isn't bad if you can manage it. If you can consistently make on-time payments, debt can help you build a solid credit history, which in turn can open up more financial opportunities for you.

"For example, if you're thinking about buying a home, a solid credit score and a history of making full and on-time payments will help increase your chances of loan approval," the agency notes. 

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Debt consolidation: what it is and what its benefits and risks are

by Patricia Ortiz, Enlace Latino NC
April 9, 2025

Enlace Latino NCApril 9, 2025 Debt consolidation is a method of combining multiple debts into a single loan or line of credit , which can help simplify monthly payments and save money on interest. Many people in the United States juggle multiple debts and feel overwhelmed. De hecho, el 44% de los estadounidenses reporta tener más deuda, que con la que se siente cómodo, según un <strong><a href="https://sites.wf.com/wfmoneystudy/?_gl=1*c3a9x0*_ga*MTA4MTIyNTMuMTc0NDEzMTE3MA..*_ga_7JXJJ2JF12*MTc0NDEzMTE3MC4xLjEuMTc0NDEzMzgzOS41OS4wLjA.">estudio</a></strong> sobre el dinero de Wells Fargo de 2024.</p> <p>Al consolidar deudas, la persona liquida varias deudas con un nuevo préstamo, si es posible, con una tasa de interés más baja o términos más manejables.&nbsp;</p> <p>“Hacerlo podría darle un mayor margen de maniobra en su presupuesto, y usted podría alcanzar otras metas financieras más rápido con el dinero que ahorra”, indica el banco en su página web.</p> <h2 class="wp-block-heading" id="h-opciones-de-consolidacion-de-deudas">Opciones de consolidación de deudas</h2> <p>Hay varias opciones para hacer una consolidación de deudas como:</p> <p><strong>Préstamo personal: </strong>tomar un préstamo sin garantía para liquidar deudas existentes.&nbsp;El préstamo consolidado tiene una tasa de interés fija y pagos programados.&nbsp;</p> <p><strong>Transferencia de saldo: </strong>solicitar una tarjeta de crédito con transferencia de saldo y transferir los saldos existentes.&nbsp;</p> <p><strong>Programa de manejo de deudas: </strong>trabajar con un consejero de crédito para negociar con los acreedores y reducir las tasas de interés.&nbsp;</p> <p><strong>Relacionado:</strong> <a href="https://enlacelatinonc.org/comprar-una-casa-con-itin-number-en-carolina-del-norte/">¿Se puede tramitar un crédito hipotecario con ITIN Number en Carolina del Norte?</a></p> <h2 class="wp-block-heading" id="h-consideraciones"><strong>Consideraciones</strong></h2> <ul class="wp-block-list"> <li>Antes de consolidar deudas, es importante evaluar los términos y cargos de la oferta.&nbsp;</li> <li>Es posible que se pueda dejar una tarjeta de crédito para cubrir gastos inesperados.&nbsp;</li> <li>El puntaje de crédito y los ingresos determinarán si se cumple con los requisitos para el préstamo.&nbsp;</li> <li>Consolidar deudas con intereses más altos en un préstamo con un interés más bajo puede ayudar a liquidar la deuda más rápido.</li> </ul> <h2 class="wp-block-heading" id="h-haga-un-inventario-de-sus-deudas"><strong>Haga un inventario de sus deudas</strong></h2> <p>Wells Fargo recomienda que antes de hacer una consolidación de deudas, es importante hacer un inventario de sus deudas.&nbsp;</p> <p>“Comience haciendo una lista de cada uno de sus préstamos y saldos de sus tarjetas de crédito, incluidos saldos pendientes, tasas de interés y pagos mensuales”, indica la entidad financiera.&nbsp;</p> <p>Las tarjetas de crédito son una forma común de deuda que se puede consolidar porque normalmente tienen tasas de interés más altas.&nbsp;</p> <p>Entre las deudas adicionales se podrían incluir los préstamos personales, <a href="https://enlacelatinonc.org/paso-a-paso-como-solicitar-el-plan-de-pagos-de-prestamos-estudiantiles-mas-conveniente/">préstamos para estudiantes</a> o <a href="https://enlacelatinonc.org/como-conseguir-ayuda-para-pagar-las-cuentas-medicas-en-carolina-del-norte/">cuentas médicas</a>. “Calculate your total outstanding balances and monthly payments. "Then, check your credit score and calculate your debt-to-months ratio to better understand your situation," the bank advises. Wells Fargo offers a virtual calculator to the public to obtain the debt-to-income ratio. What to do before doing a consolidation It's important to note that debt consolidation isn't for everyone. Keep in mind that it doesn't eliminate debt, but rather restructures it. You can use a virtual debt consolidation calculator provided by Wells Fargo to see the total cost of your current debt and a consolidation loan. In addition, you should compare interest rates; there is no guarantee that a personal loan will offer lower rates than the debt you already have. Pay close attention to the total cost of the loan, including fees and hidden costs. “For example, if you consolidate with a new loan with a longer term, your monthly payment could be lower, but you may end up paying more in interest over the life of the loan,” the entity indicates. Consider other payment strategies that might work better, especially if the total cost of consolidation is unmanageable. Related: Can I open a bank account if I'm undocumented? It helps you improve your credit history It's worth remembering that debt isn't bad if it can be managed. If you can consistently make on-time payments, debt can help you build a solid credit history, which in turn can open up more financial opportunities for you. “For example, if you are thinking about buying a house, a solid credit score and a history of making payments in full and on time will help increase your chances of loan approval,” the entity notes. This <a target="_blank" href="https://enlacelatinonc.org/que-es-consolidacion-de-deudas-cuales-son-sus-beneficios-y-riesgos/">article</a> first appeared on <a target="_blank" href="https://enlacelatinonc.org">Enlace Latino NC</a> and is republished here under a <a target="_blank" href="https://creativecommons.org/licenses/by-nd/4.0/">Creative Commons Attribution-NoDerivatives 4.0 International License</a>.<img src="https://i0.wp.com/enlacelatinonc.org/wp-content/uploads/2019/01/cropped-ICO.png?resize=150%2C150&amp;ssl=1" style="width:1em;height:1em;margin-left:10px;"> <img id="republication-tracker-tool-source" src="https://enlacelatinonc.org/?republication-pixel=true&post=116562&amp;ga4=G-3EB91P98MG" style="width:1px;height:1px;"><script> PARSELY = { autotrack: false, onload: function() { PARSELY.beacon.trackPageView({ url: "https://enlacelatinonc.org/que-es-consolidacion-de-deudas-cuales-son-sus-beneficios-y-riesgos/", urlref: window.location.href }); } } </script> <script id="parsely-cfg" src="//cdn.parsely.com/keys/enlacelatinonc.org/p.js"></script>

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