One benefit is that this loan won’t show up on your credit report.
But the drawbacks are significant: If you can’t repay, you’ll owe a hefty penalty plus taxes on the unpaid balance, and you may be left struggling with more debt.
We’re on your side, even if it means we don’t make a cent.
Lenders don’t charge fees for paying off your loan early, but they may charge upfront origination fees that range from 1% to 5% of your loan.
Some also send money directly to your creditors, increasing the odds of successful debt consolidation.
» MORE: The good and bad of home equity loans Pros: Back to top If you have an employer-sponsored retirement account, it’s not advisable to take a loan from it, since doing so can significantly impact your retirement.
However, if you’ve ruled out balance transfer cards and other types of loans, this may be an option for you.
401(k) loans typically are due in five years, unless you lose your job or quit, in which case they’re due in 60 days.
When you consolidate multiple student loans or refinance a single student loan, you may receive a lower monthly payment with a reduced interest rate or an extended repayment term.
Calculate how to potentially pay less interest on your student loan: Student Loan Interest Calculator Calculate the monthly payments on your private student loans: Student Loan Repayment Calculator If you’re a borrower with little or no credit history, or you have limited income, a cosigner may help you to qualify for this loan and potentially receive a lower interest rate.
However, a cosigner is not required in order to apply.
» MORE: Compare personal loan rates on Nerd Wallet Pros: Back to top If you’re a homeowner, you can take out a loan or line of credit on the equity in your home.
A home equity loan is a lump sum loan with a fixed interest rate, while a line of credit works like a credit card with a variable interest rate.
Consolidation works best when your ultimate goal is to pay off debt.