How to list your debts before consolidating

A complete debt list is the only way to know how much to borrow, which balances to include and whether a consolidation loan would actually lower your cost. Without it, borrowers often request the wrong amount or consolidate debts that were cheaper to keep.

The list takes about 30 minutes. You need recent statements or online access for every account. Once it is done, you can compare any personal loan offer against it in seconds, because you will know your blended APR, your total minimum payments and how long payoff would take at your current pace.

Many people start by searching for discover personal loans or similar options and fill in an application before they have the numbers. Doing the list first means you request exactly the right amount and can recognize a good offer when you see one.

Gather your most recent statement for every debt you owe: credit cards, store cards, personal loans, medical payment plans, buy-now-pay-later plans and any money owed to family. Include accounts with small balances too.

For each account, you will need the current balance, the APR, the minimum payment, the due date and, for loans, the number of payments left. Card statements show APR in the interest charge section. If an account has a promotional rate, note the end date and the rate that applies afterward.

Your free credit reports at AnnualCreditReport.com help you check you have not missed anything. They list every account reported in your name, though not always the current APR.

A useful debt list has seven columns: creditor, type, balance, APR, minimum payment, payoff amount and notes. The payoff amount matters most for consolidation, because it is what the new loan needs to cover.

A simple spreadsheet or a sheet of paper works. What matters is that every debt is on the same page, in the same format.

A sample borrower with four debts totaling $4,350 has a weighted APR of about 23.5% across all four and minimum payments that add up to $175 a month.

The medical plan at 0% should stay where it is; moving it into a loan would add interest. The three cards total $3,600 at a blended rate near 28%. A personal loan for about $3,600 at, say, 18% over 24 months would cost roughly $180 a month, slightly more than the three card minimums, but it would clear them in two years instead of five or more. If one of the cards is a Discover it card, list it the same way, using the payoff amount rather than the statement balance.

Your blended APR is each balance multiplied by its rate, added together and divided by the total balance. It is the number a consolidation loan has to beat to save money on interest.

For the three cards above: ($1,800 × 28.99%) + ($1,150 × 26.49%) + ($650 × 29.99%) = about $1,021 in yearly interest on $3,600, or a blended APR of roughly 28.4%. Any personal loan offer with an APR meaningfully below that saves money, as long as the term is not much longer than you would have taken anyway.

Use APR rather than interest rate when comparing, since a loan’s APR includes its origination fee. A 17% interest rate with a 6% fee over two years can produce an APR above 23%.

Include debts with APRs higher than the loan you expect to get, and leave out debts at 0% or very low rates, debts with special protections and debts you will pay off within a few months anyway.

Good candidates are cards and store cards above 20%, high-rate personal loans and BNPL plans that charge interest. Leave out 0% promotional balances you can clear before the promotion ends, federal student loans, which have repayment protections, and any secured loan such as an auto loan. Tax debt is usually better handled through an IRS payment plan.

Small balances deserve a second look. A $200 store card at 30% might be cheaper to pay off from savings than to add to a loan with an origination fee.

A payoff amount is the exact sum needed to close an account on a specific date, including interest accrued since the last statement. It is usually a little higher than the statement balance and is the right figure for a consolidation request.

Most card issuers show a payoff amount in the online account or will provide one by phone. Personal loan lenders issue payoff quotes valid through a stated date. Request quotes close to when you plan to apply, so the numbers are current.

Add the payoff amounts for every account you plan to include. That total, plus any origination fee the new lender will deduct, is the amount to request.

If the new lender deducts an origination fee from the deposit, request enough to cover it so the full payoff amount still reaches your creditors. Dividing the payoff total by one minus the fee rate gives the right figure.

For example, to pay off $3,600 with a 5% origination fee, request $3,600 ÷ 0.95, or about $3,790. The lender deducts $190, and $3,600 arrives. If the lender pays creditors directly, it will usually tell you the exact amount needed to cover each one.

Lenders with no origination fee make this simpler. Recent published reviews list no fee for discover personal loans, though their $2,500 minimum and good-credit requirements will not fit every list.

Compare every consolidation offer against your list using three numbers: the new APR versus your blended APR, the new payment versus your current total minimums and the total cost of the loan versus what the cards would cost at your current pace.

A good offer beats your blended APR by several points and ends in a reasonable time. An offer that only matches your blended APR may still be worth taking for the fixed end date, but it will not save much. An offer above your blended APR should usually be declined.

Our personal loan calculator shows the total cost of any loan, and our debt consolidation loans guide explains how lenders in our network review these requests. Shoppers comparing discover personal loan debt consolidation offers can line them up on the same sheet.

Once the loan funds, pay every account on your list the same day, then confirm each one shows a zero balance on its next statement. A written payoff plan prevents a balance from slipping through.

Add two columns to your list: date paid and confirmation number. Check off each account as you pay it. If the lender pays creditors directly, note the expected date and watch for each payment to post. Keep making minimum payments on any account until its payoff appears, so nothing reports late during the transition.

Then remove the cards from shopping sites and digital wallets. The list now becomes a record of what you cleared and a reminder of why the balances should stay at zero.

If no personal loan offer beats your blended APR, the list still gives you a plan: pay extra on the highest-rate balance first, keep minimums on the rest and move to the next balance when the first is gone.

That approach, often called the avalanche method, minimizes interest. Another, the snowball method, pays the smallest balance first for a quick win, which some people find more motivating. Either works far better than spreading extra money evenly.

A nonprofit credit counselor can also review your list for free and may suggest a debt management plan, which can lower card rates without a new loan.

Money owed to family or friends belongs on the list even if it carries no interest, because the payment still comes out of your budget. Usually, though, it should stay out of a consolidation loan, since replacing a 0% family loan with a 20% loan adds cost.

Write down the amount, any agreed repayment schedule and whether the lender is flexible. The main value of listing it is accuracy: your real monthly obligations include these payments, and a consolidation plan that ignores them can look more affordable than it is.

The same goes for rent arrears, overdue utility bills and money owed to a landlord. These can carry fees or shutoff risks, so they may deserve priority over a card balance even when the card has a higher APR. Note any deadline in the notes column.

If your minimum payments add up to more than about 40 percent of take-home pay, or you are using one card to pay another, the list is showing a problem that a consolidation loan alone may not fix.

Warning signs include balances that have grown over the past six months despite payments, regular cash advances, or borrowing to cover routine expenses such as groceries. In those cases, a new personal loan can buy time but rarely solves the underlying gap between income and spending.

A free session with a nonprofit credit counseling agency can help. Counselors review the list with you, build a budget and explain options such as a debt management plan. Many are members of national associations and offer services by phone. Starting there can save you from taking on a personal loan you would struggle to repay.

Update the list once a month for as long as you carry debt. Watching balances fall is motivating, and an up-to-date list makes it easy to spot a new charge or a rate change before it costs much.

Set a reminder for the day after your largest payment posts. Update balances and note anything unusual, such as a promo ending or a minimum payment change. If you consolidated, the list should eventually show one line: the new personal loan, shrinking every month.

People who begin with a search for discover personal loans or discover loans often skip this step. Keeping the list is what turns a one-time consolidation into a debt-free date.

A complete debt list tells you exactly how much to borrow, which debts to include and whether a consolidation offer is worth accepting. Build it before you apply, use payoff amounts, add any fee and compare every offer against your blended APR.

When you are ready, our application page takes about five minutes, and you can compare any offers you receive against the list before deciding. For the effect on your score, see does debt consolidation hurt your credit score.