Key takeaways
- Consolidation works when the new loan's APR and term produce a lower total cost than your current debts.
- In our example, moving $6,000 of card debt at 24.99% to a 36-month loan at 28% APR saves about $1,412 and clears the debt 22 months sooner.
- The trade-off is a higher monthly payment, so your budget must support it.
- The biggest risk is running card balances back up after consolidating.
How debt consolidation with Regional Finance works
You take one fixed-rate installment loan and use the proceeds to pay off several existing debts, usually credit cards. You then make a single fixed monthly payment until the loan is gone.
Regional Finance's large installment loans range from $2,501 to $35,000 with terms of 18 to 60 months, which covers most consolidation needs. Unlike a credit card, the loan has an end date, so every payment moves you closer to zero.
See the product details on our Regional Finance debt consolidation loans page.
Worked example: does consolidation save money?
Suppose you owe $6,000 on credit cards at 24.99% APR and pay a steady $180 a month. Compare that with a $6,000, 36-month installment loan at 28% APR.
| Option | Monthly payment | Months to payoff | Total paid |
|---|---|---|---|
| Keep paying cards ($180/mo at 24.99%) | $180.00 | 58 | $10,346.75 |
| Installment loan (28% APR, 36 months) | $248.18 | 36 | $8,934.53 |
Even with a higher APR than the cards, the loan saves about $1,412 and finishes 22 months sooner. The savings come from the shorter, enforced payoff schedule, not from a lower rate.
The catch is the payment, which is about $68 higher each month. If you could pay $248 toward the cards, you would save even more without a new loan. Consolidation helps most when the structure keeps you on track.
When Regional Finance consolidation makes sense
Good fit
Several card balances near or above the loan's APR, steady income and a firm commitment to stop new card spending.
Poor fit
Balances already at low promotional rates, unstable income, or a habit of re-using cleared cards.
Consider first
A 0% balance transfer card or a credit union loan if your credit qualifies for them.
Get help
A nonprofit credit counselor can review a debt management plan as an alternative.
Step-by-step: consolidating debt the right way
- List every debt with balance, APR and minimum payment.
- Get exact payoff amounts from each card issuer.
- Prequalify using a soft credit check to see a realistic APR and term.
- Compare total cost of the loan against your current path.
- Pay off every card immediately when funds arrive; some lenders can pay creditors directly.
- Set up autopay on the new loan to avoid late fees.
- Keep cards open but unused to protect your credit utilization and history length.
Check what you need to apply on the Regional Finance requirements page.
Risks and how to avoid them
- Re-borrowing: Freeze or remove saved card numbers from shopping sites.
- Long terms: A 60-month term can cost more than the debts you replaced.
- Collateral: If a vehicle lien is required, missed payments risk your car.
- Add-ons: Ask whether credit insurance is optional and what it adds to the cost.
For a broader introduction, read our guide to Regional Finance loans.
Consolidation loan vs other debt relief options
A consolidation loan is only one way out of high-interest debt. Each option fits a different situation, and choosing the wrong one can cost more or damage your credit.
| Option | How it works | Credit impact | Best for |
|---|---|---|---|
| Installment consolidation loan | New fixed-rate loan pays off old debts | Hard inquiry, then positive if paid on time | Steady income, several card balances |
| Balance transfer card | Moves balances to a card with a 0% promo period | Hard inquiry, utilization shifts | Good credit and payoff within the promo |
| Debt management plan | Nonprofit counselor negotiates lower rates; one monthly payment | Cards usually closed; neutral to positive over time | Those who need structure and lower rates |
| Debt settlement | Negotiate to pay less than owed | Significant negative impact; possible tax on forgiven debt | Last resort before bankruptcy |
| Bankruptcy | Court-supervised discharge or repayment | Severe, long-lasting | Unmanageable debt after other options |
If you are considering settlement or bankruptcy, speak with a nonprofit credit counselor or attorney first. Be wary of any company that charges fees before it settles a debt, which federal rules prohibit for telemarketed debt relief.
Building a budget that supports one payment
Consolidation succeeds or fails on your monthly budget. The new payment must fit comfortably, with room left for irregular costs such as car repairs and annual bills.
- Write down take-home pay for a typical month, not your best month.
- List fixed costs: rent, utilities, insurance, transportation and the new loan payment.
- Add variable costs: groceries, fuel and household items, based on the last three months.
- Set aside a small buffer for irregular expenses, even $25 to $50 a month.
- Review monthly and adjust spending before a shortfall turns into new card debt.
Many borrowers find it helpful to schedule the loan payment for the day after payday. Paying the loan first, then spending what is left, keeps the plan on track.
Finally, celebrate milestones. Paying off one-third of the balance is real progress, and noticing it makes the remaining months easier.
What to ask Regional Finance about a consolidation loan
A consolidation loan has a few details that matter more than on other borrowing. Before you sign with Regional Finance or any lender, get clear answers to these questions.
- Will the lender pay my creditors directly, or will funds come to me?
- Is the origination fee deducted from proceeds, and will the net amount cover every payoff?
- What is the total of payments for 24, 36 and 48 months so I can compare terms?
- Is collateral required for this amount in my state?
- Are any optional insurance products included, and can I decline them?
- How are extra payments applied if I want to finish early?
Write the answers next to your own debt list. If the Regional Finance offer does not beat your current path on total cost, or does not fit your budget, it is fine to walk away and explore the other options above.
Debt consolidation FAQ
Can I use a Regional Finance loan to pay off credit cards?
Yes. Installment loans are commonly used for debt consolidation. Confirm the total cost is lower than your current repayment path.
Will consolidating hurt my credit score?
A hard inquiry and new account may cause a small, temporary dip. Lower card utilization and on-time payments can help your score over time.
How much can I borrow to consolidate?
Large installment loans range from $2,501 to $35,000, subject to state rules and your credit profile.
Is there a penalty for paying the loan off early?
No prepayment penalty has been reported, so extra payments reduce interest. See paying off a loan early.
See if consolidation could work for you
Send a free loan request and compare offers from participating lenders without affecting your credit score.
Apply Now