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Debt Consolidation
With our debt rescue program, you can take control of high-interest loans and credit cards.
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Make life easier with debt rescue
Anyone who has multiple loans and credit cards knows just how difficult it is to manage all the different rates and terms. It can also be expensive. Simplify your finances and save money by consolidating high-interest debt with a lower-rate Mountain America loan.¹
Consolidating debt means taking out a new loan to pay off multiple existing debts. Ideally, debt consolidation allows a borrower to obtain better terms and/or rates. Once the debt is consolidated, the borrower pays just one monthly payment.
Debt consolidation can be an excellent financial tool to reduce debt and/or payments. However, it isn’t right for everyone. Compare the following advantages and disadvantages to see if debt consolidation is a good fit for you.
- It may reduce your interest rate.
- You may be able to lower your monthly payments.
- There are fewer payments to keep track of each month.
- It could improve your credit score over time.
- Promotional incentives are sometimes available.
- Some consolidated loan types, such as home loans, may lose tax advantages.
- A lower interest rate may not be available.
- It could result in a longer payoff schedule or potentially higher monthly payments.
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Our members saved over $174 million in loan interest in 2023.2
Debt consolidation FAQs
Who qualifies for debt consolidation?
A loan officer will review each applicant’s creditworthiness, debt-to-income ratio and other factors to determine who qualifies for a consolidation loan and how much they qualify for.
Can debt consolidation help me lower my monthly payments?
It could, but it depends on the specific terms of the debts being consolidated compared with the terms of the consolidation loan. Some factors that affect monthly payments are length of the loan, interest rate, amount owed and minimum payment.
Can I consolidate secured debts such as a mortgage or car loan?
Yes. You can consolidate secured debt to an unsecured or secured loan. Keep in mind, when consolidating secure debt with another secured loan, there needs to be enough equity in the property to accommodate the value of the consolidated loans.
Will debt consolidation hurt my credit?
There may be a slight decrease in your credit score by having a new inquiry and a new credit line on your credit report, but this may be outweighed by other factors of debt consolidation. There are many reasons why a score may change. Scores are calculated each time they are requested, taking into consideration the information that is in your credit file from a particular consumer reporting agency at that time. As the information in your credit file changes, credit scores can also change.
Is debt consolidation the same as debt settlement?
No. With a debt settlement, a borrower is asking a lender to take less than the amount owed as payment. With debt consolidation, existing creditors are paid in full and the balance is owed to the new lender.
Are there fees associated with debt consolidation?
That depends on the lender. At Mountain America, there are no application or balance transfer fees, but a borrower will pay interest on the balance.
Additional resources
Debt Consolidation—Is it For You?
When Consolidating Debt Is (and Isn't) a Good Idea
- Refinanced loans only. All loans subject to credit approval. Results may vary.
- $174 million based on loans refinanced to Mountain America Credit Union.
