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Simple Way To Consolidate Your Debt

Step 1: Appy with our simple loan application and get an answer after filling out our quick application.

Step 2: Choose the right lender that will help you accomplish your needs and your payments.

Step 3: Once the lender is selected you will get redirected to their website where you can fill your full application and get funded.

What does "debt consolidation" mean?

Debt Consolidation is a way to manage debt that involves combining one or more debts you currently have in a single form with a loan usually with a more favorable term, usually primarily used for credit cards, medical bills, and payday loans.

The main goal in consolidating your debt is to obtain a lower Annual Percentage Rate (APR) than the current rate you pay, this will usually result in a lower interest expense, lower monthly payment, and a faster way to pay off your debt. 

Choosing the best debt consolidation loan.

When choosing the right debt consolidation loan for you there are a few factors you should consider such as the APR, fees, terms, and funding time of the debt consolidation loan. 

  • Annual Percentage Rate (APR): APR, which stands for Annual Percentage Rate, represents the total cost of a personal loan, including interest and origination fees, expressed as a yearly percentage. It helps you compare the cost of borrowing from different lenders. In essence, APR is the fee you pay for borrowing money from a bank or financial institution


  • Fees: When taking out a personal loan, there may be various fees such as origination fees, prepayment fees, late fees, and returned payment fees. The origination fee is a single administrative charge that is deducted from the loan balance at disbursement. Prepayment penalties are not widely used, but some lenders may charge extra for paying off the loan earlier than the agreed term. 


  • Term: The repayment period of a personal loan influences the total cost. A longer-term result in lower monthly payments due to the extended payback period, but often involves higher interest rates. Conversely, a shorter term has a lower total interest cost but requires higher monthly payments, allowing for faster loan repayment.


  • Funding Time: The time it takes to receive a personal loan varies by lender. Some may offer same-day funding, while others may take 1-7 days after approval.


  • More tools: Other amazing tools that some lenders might provide when applying for a debt consolidation loan would be an easy interface app that can connect directly to your bank, credit score monitoring, direct payment to creditors, and hardship programs to help you get the most out of your personal loan. 

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Ways to improve the likelihood of securing a debt consolidation loan.

Increase your credit score: The main factor with loan approvals will be your credit score and repayment history. Even though a lower credit score doesn’t mean you will be denied, an individual with higher credit scores anywhere from 720-850 will have more options and better rates.

If your credit score is below low 690 it’s to your advantage to improve your credit score before applying which will help you get the best interest rates and increase the number of lenders that can approve you.

Apply Jointly or get a co-signer: In most cases getting a co-buyer or co-signer to your loan application will usually help you qualify easier for individuals having a hard time getting approved due to other applicants’ income and credit score will be considered.

Both borrowers can use the money when applying for a joint loan application, but in the co-signer case, the main applicant has access to the funds. But in both cases, co-buyers and co-signers are responsible to pay off the loan if you fail to. 

Debt Consolidation Loan Tips

Advice for securing a loan: Prioritize planning ahead by setting aside funds or creating a repayment plan, and create a budget by putting aside a percentage of your income towards paying down the loan.

Additionally, limit spending and incurring further debt to improve loan options and lower payments, also be sure not to close any of your credit cards which can hurt your credit score.

Note that debt consolidation loans often have longer terms, so be ready for extended repayment to eliminate debt.

Most debt consolidation loans can range from 2-7 years extending your debt into a more manageable payment and giving you enough time to pay back your debt. 

Something to also consider when applying for a personal loan is that it works in two ways for your credit score.

At first, it will hurt your credit score a little due to the lender doing a credit pull, but as long as you make the payment on time in the long run the loan will benefit your credit score and credit history.

Another way getting a debt consolidation loan will help your credit score is you will be able to pay off the overdue credit card bills which will eventually increase your credit score. 

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Debt Consolidation Calculator

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Note: These are estimates of loan payments you can get approved for, actual loan offers will vary depending on many factors. Get an exact number to apply online with a quick loan application and get connected to a lender to get your monthly payments. 

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Benefits of consolidation debt

  • Helps you save money in the long run. Optimally when getting a debt consolidation loan you will get a loan product with a lower interest rate & less fees associated with it. These changes will help you increase your savings and spread out your debt payment.
  • When applying for a debt consolidation loan your able to use it to cover your credit card debt which can have fast effect on your credit score because your lowering your credit utilization ratio which is the total amount of credit vs the total amount of debt you have.
  • Decreases the amount of financial accounts you need to keep records of. When you apply for a debt consolidation loan no matter what lender you use, you will end up with only one payment or one statement to worry about. This will help you not miss your payment and plan for it.

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Frequently asked questions

Is debt consolidation beneficial?

Debt consolidation can help you not only track your payment easier but lower the interest rate your paying on your credit cards which can help you pay off your debt faster. But before getting a loan you should weigh your options and see what's the best solution for your situation.

Will consolidating debt hurt my credit?

Consolidating your debt will affect your credit score, usually when applying for a loan lenders will do a credit pull that can cause a small drop in your credit score. But over time some borrowers see an improvement in their credit score by consolidating debt. Paying off your credit cards will lower your credit utilization ratio which increases your credit score.

Is good credit required for debt consolidation loan?

A good credit score is not required to get a debt consolidation loan, but applicants that have higher credit scores will have more options and better Annual percentage rates. There are many loan options to consider compare all of them and see which one might work for your situation.

What's the most effective way to consolidate your debt?

There are many options that can really depend on your financial situation. The few main ways to consolidate may be personal loans, balance transfer credit cards, home equity loans, car equity loans, 401k loans, savings, or peer-to-peer lending. Research all of your options and choose the best one for you.

Cost of debt consolidation?

No matter what loan your applying for there is always a cost associated with them. The best way to determine the cost of a debt consolidation loan is to compare Annual Percentage Rates (APR) which are usually presented on the lender's websites.

Secure loans Vs Unsecure loans?

The simple answer to the differences between a secure loan vs an unsecured loan would be that a secure loan usually has assets tied to it so as homes, cars, etc. But secure loans doesn't require collateral to get approved usually amounts will depend on your income and your credit score.


It is important to be informed about the lender you choose when seeking a loan in either Canada or the USA. Transparency is crucial when dealing with cash advance and personal loan companies. Please note that this disclaimer is for educational purposes only and is not intended as legal advice. Brainy Loans is not officially affiliated with any government entity, but we comply with all provincial and federal laws in Canada and the United States.

The Annual Percentage Rate (APR) is the true rate at which your online loan accrues and is determined by several factors such as the amount borrowed, the interest rate, the term of the loan, repayment amounts, and payment schedules. Only the lender who approves your loan can provide you with the loan terms. According to Canadian and American law, payday lenders must disclose the APR before entering into any loan agreement. We are not a payday lender, loan broker, or agent and do not have access to your loan details. Private Loan Shop only facilitates communication between eligible lenders and borrowers.

In case you do not repay your loan on or before the due date, your loan will be considered “delinquent” and subject to a fee imposed by the lender. Additionally, your bank may charge you an NSF (non-sufficient funds) fee for the failed item. The interest rate will continue to accumulate on the unpaid balance. If you fail to repay your loan, you will not be permitted to borrow from the lender again until the balance is paid in full. We only employ reputable collection agencies that comply with lawful collections practices, and late payments may negatively impact your credit rating.

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