Debt consolidation
An origination fee can leave a debt-consolidation payoff gap
Quick answer
A fee taken from the loan can leave old debt unpaid. If you borrow $10,000 and the lender takes 10%, only $9,000 is left for payoffs. You would still owe $1,000 of the old $10,000 debt, plus the new loan. Check this gap before you sign.
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Check each payoff before accepting the loan
Use the lender’s cash-after-fees figure, not just the loan amount. Match it to the payoff amounts for the dates the money will arrive. Interest or a fee posted later can change an old balance.
- List the debts you want paid and their payoff amounts.
- Confirm what cash reaches each creditor.
- Identify any amount left unpaid and its next payment.
- Compare the combined payments with the money you have for bills.
If cash is short, ask what options are available. Do not assume that a larger loan is approved or affordable. You may need to leave a debt out, use other cash, or choose another plan.
The remaining card balance stays outside the loan
In this example, the old debts total $10,000. The loan pays $9,000, so $1,000 stays due. New interest or a late payoff can add to that gap.
Partial payoff can leave 2 payment systems
Check the next part of your offer
Make every selected balance reach zero on paper first.
Then check the full cost. Make sure you can pay the monthly bill.