How do I decide which debts to consolidate and which to leave alone?
Consolidate the high-interest, unsecured debts, mainly credit cards and high-rate personal loans, where a single lower-rate loan clearly reduces your blended interest. Leave alone debts that already carry low rates or special protections. Federal student loans, for example, should almost never be rolled into a private consolidation loan, because you'd lose access to income-driven repayment, forgiveness programs, and deferment options.
Also leave secured debts like your mortgage and auto loan out of the mix unless refinancing them specifically makes sense on its own terms. The test for including a debt: is its rate higher than the consolidation loan's rate, and does it lack valuable borrower protections? Add up your current blended rate versus the new loan's rate before committing. Model it at wealthserene.com/tools/debt-payoff.
Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →