- High consumer ratings and customer service reviews.
- Many discounts and repayment options.ย
- Joint and co-signed loans available.
Best Credit Card Consolidation Loans for August 2024
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Loans are often used to consolidate existing debt, such as credit card balances, allowing you to reduce your overall interest charges, simplify the repayment process, and lower your monthly payment amount. With a credit card consolidation loan, you can take advantage of these benefits and pay off your credit cards as soon as your new loan is funded.
Here are some of the best credit card consolidation loans, including their key features.
Titel | APR | Term | Min. credit score | Loan amount |
---|---|---|---|---|
OneMain Financial | 18% to 35.99% | 34 to 60 months | Undisclosed | $1,500 to $20,000 |
Discoverยฎ Bank | 7.99% to 24.99% | 36 to 84 months | 660 | $2,500 to $40,000 |
Upstart | 7.8% to 35.99% | 36 or 60 months | 300 | $1,000 to $50,000 |
Lighstream | 9.49% to 25.49% | 24 to 240 months | 660 | $5,000 to $100,000 |
Happy Money | 11.72% to 17.99% | 24 to 60 months | 640 | $5,000 to $40,000 |
Best Egg | 8.99% to 35.99% | 36 to 60 months | 640 | $2,000 to $50,000 |
Upgrade | 8.49% to 35.99% | 24 to 84 months | 580 | $1,000 to $50,000 |
Upgrade is a top-rated personal loan lender with a 4.5 out of 5 star rating on TrustPilot with more than 39,500 reviews. Upgrade offers personal loans ranging from $1,000 to $50,000, which can be used to consolidate and pay off existing credit card balances or other debts. Repayment terms on single-borrower or joint loans can vary from 24 to 84 months, and Upgrade offers a number of different discounts for things like having an Upgrade checking account or enrolling in autopay.
Upgrade consolidation loans have an origination fee ranging from 1.85% to 9.99%, which will increase your loanโs total cost. Borrowers also need a relatively good credit score (usually 600 or higher) to be approved and to qualify for Upgradeโs best interest rates.
OneMain Financial offers both secured and unsecured personal loans that can be used to consolidate credit card debt or cover large expenses. Online pre-approval is as fast as 10 minutes, with some approved borrowers receiving funds within one hour. Joint applications are accepted if you want to consolidate shared debt, such as credit cards you have with your spouse, or if you just want to unlock better loan terms.
Repayment terms stretch from 34 to 60 months, and OneMainโs loan limits, which range from $1,500 to $20,000, are lower than those of other lenders. Origination fees also apply on OneMain Financial personal loans and can be as high as 10%, depending on your location and the loan options you choose.
Discover is a household name that offers personal loans, credit cards, bank accounts, and other financial products. With a Discover personal loan, you can consolidate $2,500 to $40,000 in credit card or other debt with no origination or application fees and a competitive interest rate. Online pre-approval is available without a hard inquiry, and youโll have between three and seven years to repay your loan.
There are no rate discounts for things like autopay, and Discover doesnโt issue joint loans. Youโll also need a household income of at least $25,000 and a credit score of 660 or higher to qualify.
Borrowers looking to consolidate $1,000 to $50,000 in credit card debt may want to consider Upstart for a personal loan. Funding is available in as little as a day with an online pre-approval that wonโt affect your credit. Borrowers must meet Upstartโs $12,000 annual income requirement, but those with a credit score of just 300 (or even borrowers with little to no credit history) can still be approved.
Origination fees apply and can sometimes be as high as 12%. Repayment terms are somewhat limited, ranging from just 36 or 60 months in length. Upstart also doesnโt allow joint or co-signed loans.
If youโre looking to consolidate a lot of credit card debt or other balances, LightStream can give you access to $5,000 to $100,000, with funding as fast as the same business day. It offers flexible repayment terms, from 24 to 240 months, with no origination fees on new loans. Autopay discounts are also available for borrowers who enroll.
Loans start at $5,000, so youโll want to look elsewhere if you only have a small amount of credit card debt. Unfortunately, LightStream doesnโt offer online pre-approval, and personal loans are limited to borrowers with good or excellent credit.
A payoff loan through Happy Money is a specialized product designed to help borrowers consolidate their credit card debt. You can only use the loan to pay off existing debt, but Happy Money streamlines the process by paying your creditors directly, so you can avoid the hassle of doing it yourself. You can shop for rates and loan offers online in minutes without affecting your credit, and loans are available from $5,000 to $40,000.
Origination fees do apply, and vary by loan amount, repayment term, and the lender chosen. Borrowers must also have a credit score of 640 or higher to qualify, and loan funds canโt be used for anything other than credit card consolidation.
Whether youโre looking for better loan terms or a lower rate, a secured loan may be an option. Best Egg offers credit card consolidation loans secured by collateral such as the fixtures in your home. While borrowers are required to have a credit score of at least 640, Best Egg also considers non-credit factors when approving applications.
Repayment terms range from 36 to 60 months, and origination fees as high as 8.99% apply to most loans. Best Egg loans are not available in Iowa, Vermont, or West Virginia.
To pick the best credit card consolidation loans and lenders, we looked at a number of factors, including the lendersโ minimum and maximum loan limits, available interest rates, and whether or not origination fees were charged (and if so, what those fees were). We also looked at repayment term options, whether borrowers could get rate discounts, and how quickly loan funds are typically disbursed by each lender.
If you are in the market for a credit card consolidation loan, follow these tips to compare lenders and help determine which loan company is right for you.
The most important thing to do is shop around before you choose a lender. Many lenders today offer online pre-approval without affecting your credit, so you can see what loan terms youโll be offered without dinging your score. This will also help you find a loan with the right repayment terms for your budget.
Some lenders charge fees on personal loans, whether youโre using the funds for debt consolidation or another purpose. These added costs, usually origination fees, can be as much as 12% of your total loan amount. Avoid these fees if possible.
Some lenders may disburse the loan funds directly to you, so you can repay your existing creditors. Others might send the loan funds directly to the credit card issuers, saving you the extra step.
In order to qualify for a credit card consolidation loan, youโll need to meet each lenderโs eligibility requirements. Here are some top things lenders will look at when assessing your application.
The stronger your credit history, the less risk you pose to a lender. Some lenders donโt have minimum credit score requirements while others may only accept borrowers with good or excellent credit. Depending on your score and credit history, some lenders may be a better match for you than others. A higher credit score will typically open up more favorable loan options as well, such as higher loan limits, longer repayment terms, lower fees, and lower interest rates.
Many lenders have minimum credit score requirements, which you must meet before being approved for a consolidation loan. Others will look at your income when determining your ability to repay the debt by measuring your debt-to-income ratio (DTI).
While you may be approved for a credit card consolidation loan, you might not qualify for the maximum that a lender offers. Your requested loan amount will affect your chances of approval, and personal factors such as your credit score, desired loan term, and household income will influence the loan amount for which youโre approved.
If youโre unsure whether a credit card consolidation loan is the right choice, here are some alternatives to consider.
Some credit cards have promotional balance transfer offers for cardholders who have other credit card balances. These offers usually include a low interest rate or even 0% APR for a specific period of time on the balances transferred over. You will pay a fee, but itโs usually eclipsed by the APR savings.
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Instead of consolidating multiple credit cards into one loan, you can also refinance a single credit card balance. This is often the easiest solution if you arenโt carrying multiple balances.
If you have equity in your home, you can tap into it with a home equity loan, home equity line of credit (HELOC), or cash-out refinance loan. Any of these will allow you to draw funds against your home equity, which you can use to pay off other debt.
Just be careful: While credit card debt is (typically) unsecured, home equity debt uses your home as collateral. If you default on a home-secured loan, your home could be at risk.
Under a debt management plan, you work with an organization to negotiate a repayment plan with your creditors. These plans, which often extend over three to five years, will bring your accounts current and may even lower interest rates. You work with a debt counselor and pay the agency, which forwards your payments to creditors.
If you are overwhelmed with unsecured debt balances, such as credit cards and personal loans, a debt settlement company like National Debt Relief may be able to help you pay less to creditors than your current balances.
National Debt Relief doesnโt offer loans. Itโs a settlement company that negotiates with your creditors to reduce balances, especially if you are already behind on payments or in collections.
Borrowers should know that debt settlement programs can hurt credit scores. Even if balances are reduced, these plans can still come with hefty fees that average between 15% and 25% of the final balance owed.
However, if obtaining a consolidation loan is not an option, you may want to consider consulting a debt settlement company as a last resort.
Still want to know more about credit card consolidation loans? Here are a few more takeaways to keep in mind.
Credit card consolidation combines two or more credit card balances into one new account, whether a personal loan, balance transfer, or other loan product. This new loan is used to pay off your existing creditors and clear out those balances; youโll then continue making payments on your new loan or account moving forward.
By consolidating credit card balances, youโll simplify and streamline the debt-repayment process. Instead of making payments on multiple accounts, youโll only have one account to manage and make payments on moving forward.
The best time to get a credit card consolidation loan is when you have more than one credit card balance and you either have an opportunity to reduce your overall interest rate, need to adjust your monthly payment obligation, or want to remove a co-borrower from an existing debt. If you qualify for a consolidation loan, you may be able to save money, reduce your monthly payments, get out of debt sooner, or, in some cases, all three.
A credit card consolidation loan is a personal loan used to pay off and replace existing credit card balances. This loan may allow you to lower your overall interest rate and pay less in finance charges over the course of your debt repayment. You can also use a consolidation loan to adjust your monthly payment amount to better suit your budget, and you may get out of debt sooner than planned.
Refinancing and replacing credit card debt with a consolidation loan can hurt your credit score initially. This is because you are applying for and taking out a new loan, and adding an additional credit account to your credit report. However, as you pay off your credit card(s) and begin making payments on this new installment loan, your credit score will rebound, often rising higher than before.
Many loan companies will help you consolidate credit card debt. The right one for you depends on your credit score, how much you need to borrow, finding the right repayment terms, and whether you want a lender that will pay off your creditors directly. Some popular options include our recommendations above.
An unsecured personal loan is usually your best choice for consolidating credit card debt. It replaces unsecured debt with a new unsecured debt, hopefully at a lower APR, without your having to provide collateral to a lender. Many unsecured personal loans offer competitive interest rates and flexible repayment terms, allowing you to pick the lender and product that best suits you and your budget.
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