A credit card debt can be a stressful. Not only are you incurring interest charges, but you may also have to manage paying multiple bills each month. One solution is a credit card consolidation loan, but it can be challenging to find the right loan with the best interest rates and fees.
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A credit card consolidation loan allows you to reduce multiple payments into a single one, while potentially reducing your interest charges. That’s because credit card consolidation loans are personal loans, and will have a lower interest rate than most credit cards. So when you have one of the best credit card consolidation loans, you can potentially save hundreds, or even thousands of dollars while you pay off your debt sooner. Our team of financial experts reviewed and ranked more than 30 online lenders to help you get funded.
Top Picks for Best Credit Card Consolidation Loans
This lender is an excellent choice for those who have had credit problems and are looking to consolidate their credit card debt. For debt consolidation, they offer direct payments to pay off your credit card debts, and even feature a discount for doing so. You can get pre-qualified with only a soft credit pull, so it has no effect on your credit score. And most importantly, Upgrade has a minimum credit score of just 560, so it provides loans to those with fair or bad credit
Upgrade offers many options for its credit card debt consolidation loans including secured and joint loans. It also features a broad variety of repayment terms, and borrowers can take advantage of a 0.5% discount for using autopay. It also offers additional discounts for those who are checking account customers and those who opt for direct payment to creditors. However, it does impose both origination fees and late fees.
When you have credit card debt and serious credit problems, Upgrade is there to help. By offering credit card debt consolidation loans to people with credit scores as low as 560, and numerous opportunities for discounts, upgrade is a strong choice for those with fair or bad credit.
One way to consolidate and pay off your credit card debt is to take out a personal loan that’s secured by your home equity. Best Egg offers homeowners secured loan options that allow you to do this. It also offers direct payments to credit card issuers and loan amounts of up to $50,000. On the other hand, it does charge an origination fee of 0.99% to 5.99% and it doesn’t offer a discount for autopay. In fact, it doesn’t even offer a mobile app to help you manage your loan.
Best Egg has many compelling features for those who need to consolidate their credit card debts. At the top of that list is a secured loan option that allows homeowners to receive a lower interest rate than is possible with an unsecured loan. Other features include direct payments to creditors as well as loan amounts from $2,000 all the way up to $50,000. However, there’s no discount for autopay, and it does have an origination fee.
Best Egg can be a great option for those who have credit card debt and want to get a lower interest rate by taking out a secured loan. It simplifies paying off your debt by offering direct payments to creditors, and loans are available for amounts up to $50,000. However, you do need to have good or excellent credit to qualify.
Universal Credit stands out by offering the highest user reviews of all the personal loans we rated. Other things that make it ideal for credit card consolidation include a rate discount for direct payments to card issues and the option to change your payments date. It even includes free credit score access and a discount of half a percentage point for those who set up autopay. That said, it does have an origination fee, and there’s no option for joint loans or secured loans.
In addition to receiving the highest user reviews, Universal Credit offers several features for credit card consolidation. First, it gives you the option of direct payment to credit card issuers, which saves you some work and could save you a little bit of interest charges. It also gives you the ability to change your payment due dates and offers discounts for autopay. But it does charge origination fees and has no option for joint loans.
Users rate Universal Credit this highest, but you don’t have to take their word for it. When you consider features like free credit scores, direct payments to creditors and a discount for autopay, you may choose this lender for its terms alone.
LightStream is our best personal loan overall because of their high loan amounts and the many repayment terms they offer. This provider advertises some of the lowest rates in the business, and offers an auto-pay interest discount, if you choose that payment option.
The amount you can borrow with a LightStream personal loan varies based on the loan purpose, yet amounts up to $100,000 are available and loan terms can be up to 20 years. These loans come with no origination fees and no hidden fees, and a generous .50% auto-pay discount is available. Borrowers who qualify can expect interest rates from 3.49% to 19.99% with auto-pay.
To qualify, you need to have good credit that includes several years of credit history, sufficient income and assets to support your existing debt obligations and requested loan amount.
LightStream also has an app where customers can make payments, apply for new loans, track payment due dates, and track loan balances.
SoFi has quickly made a name for itself by offering a variety of loan products though its mobile app and desktop interfaces. So it’s no surprise credit card consolidation loans can be applied for with ease on your mobile device or desktop computer. Beyond that, its debt consolidation loans have no fees and offer co-sign loan options. There’s even a discount for autopay and unemployment protection.
With its all digital application, SoFi makes it easy to apply for a credit card consolidation loan. In fact, you can even get prequalified with just a soft credit check, and no effect on your credit score. However, SoFi’s credit card consolidation loans require at least a 680 credit score, so they aren’t for those with fair or bad credit. And while you can get a co-signer, they don’t offer secured or joint-loan options. Also keep in mind that the minimum loan amount is a rather high $5,000.
SoFi is all about offering financial services with a seamless digital experience, and their credit card debt consolidation loans are no exception. But when you add in features like no origination fees and loans up to $100,000, SoFi becomes a stong contender for your next credit card consolidation loan.
PenFed stands for the Pentagon Federal Credit Union, which was created to offer financial services to members of the military and their families. Today, anyone can join with no military service required. And when you work with a non-profit credit union instead of a for-profit bank, you can expect plenty of customer-friendly policies including no origination and prepayment fees as well as joint and secured loan options.
To apply for a credit card debt consolidation loan, you must first join the credit union. The minimum credit score is 650, and loans start at $600. And it’s great to see that there are no prepayment or origination fees. However, you also don’t have the option for an autopayment discount, as seen with debt consolidation loans from other providers. And although you can manage your account with a mobile app, you can’t change your payment due date.
If you’d prefer to work with a non-profit credit union, then PenFed is a great choice for your credit card debt consolidation loan. With low minimum credit scores and loan amounts, these loans are very accessible. And with no origination and prepayment fees, their loans are affordable as well.
Marcus by Goldman Sachs - Best for Good and Excellent Credit
You probably know Goldman Sachs as an investment bank, but Marcus is its online banking brand. Marcus by Goldman Sachs offers especially competitive credit card consolidation loans for applicants with good or excellent credit. This means having a FICO credit score of 660 or higher. Options include numerous loan terms and direct payments to creditors, but don’t expect co-signed loans, joint loans or secured loan options.
To qualify for a credit card debt consolidation loan, you have to have a credit score of 660 or above, and options include loans from $3,500 to $40,000. Loan terms can vary from three to six years with many options in between. But as you might expect from an old-school investment banking company, they prefer you call them by phone, and don’t even offer online chat or social media contact options.
This is a great option for those without serious credit problems who want to work with a really established institution. It also offers credit card consolidation loans with no fees, and direct payment options, but don’t expect much in the way of 21st century online customer service.
Discover Personal Loans - Best for Easy Application Process
Direct payments to creditors with debt consolidation loans
Pros & Cons
Highly functional mobile app.
Next day funding.
Direct payments to creditors.
Many repayment term options.
No discount for autopay.
No co-sign or joint options.
No secured loan options.
When you’re looking for a credit card debt consolidation loan provider that offers the fastest and most simple application process, then consider Discover. While Discover might be best known as a credit card issuer and payment network, its debt consolidation loans can be filled out and managed online and through their mobile app. It can even fund loans the next business day with numerous term options. Other benefits include direct payments to creditors and no origination fees.
Discover Personal Loans offers credit card debt consolidation loans between $2,500 and $35,000, with no origination fees. Terms vary from three to seven years. There are also no prepayment penalties and Discover is widely known for offering excellent customer support. If you need to speak with someone, it offers 100% U.S.-based loan specialists who are available seven days a week. However, it doesn’t offer a rate discount for autopay, as many loan providers do.
Discover Personal Loans offers online applications and fast funding, which may be enough to sway many borrowers. But on top of that, it features a variety of payment options and has no origination fees. If you don’t need cosign or joint loans, this could be a strong option to consider.
OneMain Financial - Best for Qualification Leniency
When you have had serious credit problems, it can be extremely hard to qualify for a credit card debt consolidation loan. But OneMain Financial is one of the few lenders in this space that doesn’t have a minimum credit score, so it can’t hurt to apply. In fact, it’s designed for borrowers with low credit scores, and it offers several secured lending options. However, it does charge an origination fee and there’s no discount for autopay.
OneMain Financial can offer credit card consolidation loan options to all borrowers, with no minimum credit score required. It looks at the applicant's entire credit and income history, not just the credit score. It features secured loan options as well as joint loans. That said, you can expect higher interest rates than some competitors as well as origination fees.
Credit card consolidation loans from OneMain Financial are an attractive option for those with fair or poor credit, as you can expect it to take into account your entire financial picture. This can be ideal for those who have had financial problems, but now have a strong income and a good recent payment record.
Happy Money is the new name for the company formerly known as Payoff, and it offers a great credit card loan consolidation option for those who need flexible terms. It offers a wide range of loan amounts and loan terms, as well as the option to change your payment due dates.
Happy Money offers unsecured loans that allow direct payments to creditors. They also offer flexible payment dates and can fund loans within two days. However, APR’s can be higher than competitors and there’s no discount for autopay. Loan amounts are offered between $5,000 and $40,000, and a minimum credit score of 600 is required.
If you’re looking for a credit card debt consolidation loan with flexible terms, then Happy Money is worth considering. It features a variety of loan terms, amounts and other options, as well as direct payments to creditors.
How to Choose The Best Credit Card Consolidation Loan
Once you’ve decided that a credit card consolidation loan is the best way for you to pay off your debt, how do you find the best one? Thankfully, our experts used numerous factors to rank the available lenders.
When you’re looking for the best credit card consolidation loan, here’s what you need to pay attention to:
Loan Features: Look at the key features such as the loan terms, loan amounts and loan use limitations.
Interest rates and fees: Be aware of all of the different types of fees, as minimum and maximum interest rates that may apply.
Application process. Examine the application information requirements, and take a look at whether it requires a hard-pull or soft-pull of your credit report, and what the impact on your credit score will be. You also want to know what the funding time is and any distinctively competitive offerings.
Qualification process. Find out what the loan’s minimum credit score is, as well as the income requirements. If applying with another person, learn if a co-signer or joint application is an option. And if applying to a credit union, you’ll want to know what the membership requirements are.
Customer support. Do they offer live customer service representatives? What are the other ways they offer support?
Online user reviews. Look for reviews on independent review sites like Trustpilot.
Perks and Bonuses. Does the loan provider feature other service offerings like payment flexibility, advertising transparency and advanced technology.
Best Credit Card Consolidation Loans - Main Features
Min. credit score
2 to 7 years
2 to 5 years
3 to 5 years
2 to 7 years
3 to 5 years
Marcus by Goldman Sachs
3 to 6 years
Discover Personal Loans
3 to 7 years
What is a Credit Card Consolidation Loan?
A credit card consolidation loan is a personal loan that’s used to pay off the balance of existing credit cards. Once the balance is paid off, then you’ll only have a single loan to make payments on every month. And most importantly, a credit card consolidation loan should offer a lower interest rate than your credit card accounts.
Should You Consolidate Credit Card Debt?
When you can qualify for a credit card consolidation loan that offers a lower interest rate, then it can save you a lot of money. Other reasons to consolidate your credit card debt include having a lower monthly payment, or
However, there can be some alternatives to personal loans, such as balance transfer credit cards that offer 0% APR promotional financing. And if you are close to paying off your credit card balances, then you may not need to consolidate them.
Credit Card Refinancing vs. Debt Consolidation
If you are considering credit card refinancing instead of a debt consolidation personal loan, then it’s important to consider the differences as well as the benefits and drawbacks of each.
First, credit card refinancing means using a balance transfer credit card to consolidate your debt, while true debt consolidation means taking out a personal loan. Refinancing your debt with a credit card can offer an interest free promotional financing period, but it will eventually expire. And when it does, you’ll be back to incurring interest charges at the standard interest rate. You’ll also be bound by other credit card terms including the same minimum payment, late fees and potential penalty interest rate. And if you continue to use the credit card for daily purchases, you’ll add more to your balance and it will take longer to get out of debt.
But with a debt consolidation personal loan, you’ll pay off your credit card debt, and can enjoy a lower interest rate for the life of the loan. You’ll also have different terms and conditions that can be more favorable than a credit card.
How to Get a Credit Card Consolidation Loan
Getting a credit card consolidation loan can be a great way to pay off your debts, but there are several steps that you should follow to apply for one.
Research your debts. First, make a list of your current debts, their interest rates and your monthly payments. This way, you’ll understand the total amount of debt that you need to consolidate, and what interest rate you will need to receive to justify the new loan.
Check your credit. You can use one of many free services to check your credit scores. And if you notice any problems, you’ll want to check your credit reports as well. Thankfully, you are entitled to a free copy of your credit reports from AnnualCreditReport.com, which is the only source of free credit reports that’s authorized by Federal Law. If you find out that your credit score is either “Good” or “Excellent,” about a 700 or better FICO score, then you’re likely to qualify for a personal loan with an APR that’s lower than your credit cards. If your credit score is below 700, then it can be much harder to find a personal loan with a low interest rate.
Shop around. Compare the terms and conditions of various loans. Finding the lowest interest rate is the most important thing for most borrowers, but you’ll want to consider the factors as well.
Apply for the loan. This process involves gathering and submitting the necessary documents including those that verify your identity and your address, as well as verify your income. At the same time, you’ll want to closely examine your loan document’s terms including fees and prepayment penalties, if any.
Close on the loan, and make payments. Once the loan is finalized, or closed, you’ll need to ensure that all of your other loans are paid off and have a zero balance. You’ll also want to set up a system to ensure that you make timely payments. Your lender might offer a way to make payments automatically, or you can set up recurring payments through your bank.
What to do After a Credit Card Debt Consolidation
Once you have successfully consolidated your credit card debt, what comes next? You’ll want to set up a personal finance system that allows you to manage your finances without getting back into credit card debt. Here are several strategies you could consider:
Cancel your credit cards. After getting in and out of credit card debt, many people prefer to simply avoid credit cards. You may wish to close your accounts, but that could have negative effects on your credit.
Keep the accounts open. You could also choose to keep the accounts with no annual fees open, but keep the cards in a secure place and use them rarely, if ever. However, you’ll need to make an occasional charge to ensure the accounts aren't closed for inactivity.
Find an alternative method of payment. Without using credit cards, you’ll need to use something else to make purchases. Choices include bank debit cards, prepaid debit cards and cash. Each has its own advantages, drawbacks and costs that you’ll need to weigh.
Alternatives to Credit Card Consolidation Loans
While personal loans are popular, they aren’t the only way to consolidate credit card debt. Here are some other alternatives:
Balance transfer credit cards. There are many credit cards that offer 0% APR or reduced APR balance transfers. These promotional financing offers last from a minimum of six months to as long as 21 months. After the promotional financing rate expires, the standard interest rate will apply.
Home equity line of credit. If you own your own home, then you could qualify for a line of credit that’s secured by your equity. You can then use this line of credit to pay off your credit card debts. And as a secured loan, you should receive a very low interest rate compared to your credit cards.
Home equity loan. Like a home equity line of credit, a home equity loan is an installment loan that uses the equity in your house as security. This loan is then used to pay off your outstanding credit card debts.
Cash out refinancing. Another option is to refinance your house and take cash out. That’s when your new loan exceeds the remaining balance in your old loan, and the difference is returned to the borrower. Since mortgage loans tend to have very low interest rates, you should receive a much lower rate than your credit cards offer.
Retirement savings loan. There are 401(k) plans that allow you to borrow from your retirement savings. These loans can be used to pay off credit card debt, and when they are repaid, your retirement savings is restored. There are numerous requirements and regulations that affect these kinds of loans, so you’ll want to do plenty of research before proceeding.
Finding the best credit card consolidation loan is not simple, but our guide can make it much easier than starting from scratch. And while your credit card debt can seem overwhelming right now, finding the right personal loan can reduce your many payments to a single, manageable bill. Most importantly, you should be able to enjoy a lower interest rate and pay far less in interest charges. And when you’ve paid off your credit card balances, you’ll have the opportunity to start over with your finances and manage them more efficiently and effectively.
Frequently Asked Questions(FAQ)
Does Credit Card Refinancing Hurt Your Credit Score?
No. Once you’ve refinancing your credit card debt, you’ll have the same amount of debt as before. And with fewer debts, and possibly lower monthly payments, you may even see your credit score increase. If you don’t close your credit card accounts, then you’ll also have more available credit, which can help your score.
How does credit card debt consolidation work?
When you take out a single loan that allows you to pay off multiple outstanding credit card balances, then you have consolidated your debts. Doing so allows you to make a single payment instead of multiple monthly payments. And if your debt consolidation loan has a lower interest rate, then you’ll save money on interest charges and potentially pay off your debt sooner.
Is credit card debt consolidation a good idea?
It can be a good idea when you can qualify for a credit card consolidation loan that offers a lower interest rate. This allows you to save a lot of money on interest charges, and possibly make a lower monthly payment. However, if you are close to paying off your credit card balances, then you may not need to consolidate them.