Debt consolidation
What happens when the consolidation loan does not cover every balance?
Do this first
Any old debt the loan does not pay is still due. List each bill and due date beside the new loan payment. Keep paying until the old lender says the debt is paid. If the bills do not fit, ask about payment help before they are due.
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Make a payment list now
Scroll across to see all columns.
| Bill | What to record |
|---|---|
| New loan | Payment, first due date, and payment account. |
| Each old debt | Balance after the payoff posts, payment due, and date. |
| Any disputed amount | The amount, creditor contact, and written response. |
For example, $9,000 sent toward $10,000 of old debt leaves $1,000 unpaid, before new interest or charges. The payment on that remainder does not vanish because you have a new loan.
Ask the creditor for its current balance and due date. If a payment is too high, ask what help is available and how it changes fees or credit reporting. Get an agreed change in writing.
Only paid balances move into the new loan
The new lender may pay old debts or send cash to you. An old bill stays due until that lender receives the payoff.
A payoff can come up short for more than one reason
- A deducted origination fee reduces available cash.
- A product maximum is below the full payoff need.
- Trailing interest posts after the payoff quote.
- A creditor receives funds after the next due date.
Partial payoff can increase monthly pressure
Check the next part of your offer
Plan for every payment still due
If the combined payments are too high, ask the creditors about help before they are due.