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Refinance vs Consolidation
Refinancing replaces one loan with a better one. Consolidation combines several debts into one. The right move depends on what you're trying to fix.
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Feature
Refinance
Consolidation
Number of debts
One
Multiple
Goal
Lower rate or payment
Simplify + save
Common products
Mortgage refi, auto refi, student refi
Personal loan, balance transfer, HELOC
Cost to open
Closing costs common
Origination fee typical
Impact on credit
Short-term dip
Short-term dip, then improvement
Our take
Refinance when you have one loan you'd like at a better rate. Consolidate when several high-rate balances are dragging on you every month.
Common questions
Can I do both?
Yes — many borrowers consolidate credit-card debt with a personal loan, then refinance their mortgage separately.
Will consolidation hurt my credit?
There's usually a small short-term dip from the hard pull, offset by lower utilization within a month or two.