How to Consolidate All Debts Into One Payment

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Debt can have a negative affect on every aspect of your life. The stress of being in debt can overwhelm your family, limit your social life and change your attitude. Many people end up in debt because of medical bills, abusing credit cards or job loss. One of the ways to help alleviate the stress of debt and make paying it off more convenient is to consolidate all of your bills into one payment. Consolidating your bills also has the potential of saving you money in interest and fees as long as the new bill has favorable terms.

Calculate your outstanding debt. Collect all of your statements listing your secured and unsecured debt, including your credit cards and loans. Add them up to get the total amount of money that you owe.

Take out a home equity loan or a line of credit. If applicable, use the equity in your house to take out a secured line of credit using your home as collateral. Apply at several financial institutions to make sure you get the most competitive interest rate. Make sure the loan is equal or greater than your total debt so that you will have to make only one monthly payment.

Borrow money from friends or family, if possible. If you have friends or family that are financially capable and willing to lend you the money, it may be a better option than taking out a loan. They may be willing to offer you better terms than a traditional lending institution -- saving you even more money in the long run. Discuss the terms of the loan with them before borrowing the money including the interest rate and the length of the loan.

Transfer all of your credit cards balances to one card. Many credit card companies offer no interest or low-interest cards specifically geared toward consolidation. Open a credit card account with a low/no interest rate and transfer all of your existing balances onto that card. Make sure the card will not be maxed out by the new transfers, which will cause over-the-limit fees.


  • Whenever you are transferring balances onto a credit card, make sure you can pay the card off before the introductory interest rate ends.

    If you qualify, you can also take out a consolidation loan from the government to pay back federal loans, such as school loans.


  • Do not use your credit cards once you have consolidated your bills to avoid falling back into debt.