: Add up the balances and APRs of all debts you want to pay off.
: Unlike a home equity loan, your physical assets are not at risk if you default.
: You borrow a lump sum to pay off several smaller debts.
: Lenders prefer a DTI ratio below 36%. Ratios above 43% may make approval difficult at institutions like Harvard Federal Credit Union .
: It is only effective if the new loan's interest rate is lower than the average of your existing debts.
