Debt consolidation can help you keep track of payments, get a lower interest rate and pay off your debt faster. It’s a smart move under the right circumstances, but you’ll want to weigh your options to see if this is a good idea for your situation.

For example, it’s not worth consolidating if you can’t get a lower APR on the new form of financing than what you’re currently paying on your debts. But when you consolidate debt for a lower APR, you’ll save money in the long run, and you may be able to save money on monthly payments, too.

Debt consolidation can affect your credit score. There might be a small drop in your credit score after consolidating debt, since you are taking out a new credit product or loan. You might also see a dip in your credit score if you settle a debt or work with a debt management service.

Some borrowers see their credit score increase by consolidating debt, particularly credit card balances. Paying off credit card balances lowers your credit utilization ratio, which can give your credit score a boost.

Whatever the initial effect on your credit score, debt consolidation can help you increase your credit score over the long term. If you choose an option with affordable payments, you can build up a healthy payment history, which is central to a good credit score.

Applicants with good credit will have a wider range of debt consolidation options. They can get approved more easily for balance transfer credit cards with introductory 0% APR periods and personal loans with lower APRs.

Still, there may be options for consolidating debt if you have bad credit. You could try a secured loan, such as a home equity loan, which may come with a lower APR. There are also 401(k) loans, which let you borrow money from your own retirement fund without a credit check.

That will depend on your financial situation. There are a few primary methods of debt consolidation, including personal loans, balance transfer credit cards and home equity loans. You may also consider a 401(k) loan or debt management plan to consolidate debt. To learn about your options, talk to a credit counselor who can provide free or low-cost guidance on your debt relief options.

It always costs money to borrow money, which is why you want to find the debt consolidation option with the lowest APR to save yourself the most money in the long run.

Different debt consolidation options come with their own set of interest rates and fees. For example, some personal loan lenders charge origination fees, while a home equity loan can incur appraisal fees and closing costs. Even a credit card balance transfer can come with a fee.

Debt consolidation has the potential to save you money, but it’s not guaranteed. To save money, you’ll have to consolidate your debt into another form of financing that has a lower APR than what you’re currently paying on your debts. Before you consolidate debt, it’s important to take a look at your current credit card and loan agreements to determine the APR you’re paying, so you can shop around for financial products that will save you money.

If your goal is to get out of debt faster, consolidating your debts can be a smart move. Consolidating with a personal loan, for example, can give you the option to choose a short loan term, so your debt will be paid off sooner. And if you get a lower APR than what you’re currently paying on your debts, then you can pay off your debt faster even if you pay the same amount of money toward your debt each month.

There are several places to seek a consolidation loan, including banks, credit unions and online lenders. You can also see if you prequalify for a loan through LendingTree’s network of lenders using our personal loan marketplace. Just fill out a single form, and you’ll know if you’re eligible within minutes.

Secured debt is tied to an asset you own, called collateral. Some borrowers can more easily qualify for a secured loan and even pay less in interest. But if you stop repaying the loan, the lender has the right to claim that collateral and sell it to settle the debt. Home equity loans are a type of secured debt that can be used for consolidation.

Unsecured debt doesn’t require that you have or put up collateral for the loan. Personal loans and credit cards are examples of unsecured debt. With no collateral on the line, lenders will rely more on an applicant’s credit score to decide whether to extend a loan and how to determine your APR.