Compare debt consolidation loans for good credit

Advantages of consolidating debt with a good credit score

A good credit score can net you some of the most lucrative rates on consolidation loans, plus grant you access to coveted balance transfer credit cards featuring very low promotional APRs. Since debt consolidation rolls your existing debts into a single payment, a consolidation loan or balance transfer credit card can save you more money than if you paid your debts individually.

To qualify for a debt consolidation loan, you’ll typically need a low debt-to-income ratio in addition to having good credit. Your interest rates and loan amounts are based on your creditworthiness, meaning you’re looking at ideal terms if you have good credit.

Should I get a balance transfer card or a loan?

Banks, credit unions and online lenders offer personal loans to pay off debt, often with competitive, low rates. Balance transfer credit cards often offer a low APR for a period of time on the debt you transfer to the card. Both are suitable options for people with good credit.

Balance transfer credit cards can offer competitive rates on your transfer saving you on interest while you pay down your debt. This could be a solid option if you have debt on multiple credit cards with high APRs. But you generally can’t transfer debt between cards with the same provider.

Debt consolidation loan vs. balance transfer credit card

Compare balance transfer credit cards

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Name	Product	Balance Transfer Rate	Balance Transfer Fee	Purchase Interest Rate	Annual Fee		Min. Credit Score	Description
BMO CashBack Mastercard Finder Award		1.99% for the first 9 months (then 22.99%)	1%	19.99%	$0	Apply now More Info	Min. recommended credit score: 660	Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 1.99% on balance transfers with a 1% balance transfer fee for nine months.	Compare	loading Fetching your data...
Tangerine World Mastercard		1.95% for the first 6 months (then 19.95%)	3%	19.95%	$0	Apply now More Info	Min. recommended credit score: 600	Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).	Compare	loading Fetching your data...
Tangerine Money-Back Credit Card		1.95% for the first 6 months (then 19.95%)	3%	19.95%	$0	Apply now More Info	Min. recommended credit score: 600	Earn an extra 10% cash back (up to $100) on up to $1,000 of everyday purchases in the first 2 months Until May 31, 2022. Plus, get a 1.95% interest rate on balance transfers for the first 6 months (valid within the first 30 days of account opening, 1% transfer fee applies).	Compare	loading Fetching your data...
BMO Preferred Rate Mastercard Finder Award		3.99% for the first 9 months (then 12.99%)	1%	12.99%	$20	Apply now More Info	Min. recommended credit score: 660	Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.	Compare	loading Fetching your data...
BMO Rewards Mastercard		1.99% for the first 9 months (then 22.99%)	1%	19.99%	$0	Apply now More Info	Min. recommended credit score: 725	Get a bonus of 10,000 BMO Rewards points when you spend $1,000 in the first 3 months. Plus, get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.	Compare	loading Fetching your data...
BMO AIR MILES Mastercard Finder Award		1.99% for the first 9 months (then 22.99%)	1%	19.99%	$0	Apply now More Info	Min. recommended credit score: 660	Get 800 AIR MILES Bonus Miles (enough for $80 towards purchases with AIR MILES Cash). Get a rate of 1.99% on balance transfers for 9 months. A 1% fee applies to transferred balances.	Compare	loading Fetching your data...
Scotia Momentum No-Fee Visa Card Finder Award		0% for the first 6 months (then 22.99%)	N/A	19.99%	$0	Apply now More Info	Min. recommended credit score: 660	Earn 5% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). Plus, get a 0.00% introductory interest rate on balance transfers for the first 6 months with no balance transfer fee. Apply by August 31, 2022.	Compare	loading Fetching your data...
Scotia Momentum Visa Card		0% for the first 6 months (then 22.99%)	N/A	19.99%	$39	Apply now More Info	Min. recommended credit score: 660	Get a 0.00% introductory interest rate on balance transfers for the first 6 months. Apply by August 31, 2022.	Compare	loading Fetching your data...

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How do I compare options?

Review your circumstances — financial and otherwise — before choosing the best option. Consider the following:

• Your total debt. If your debt is particularly high, there might not be a consolidation loan available that can cover the cost of all of your debts. In this case, you might split your options between a loan and a balance transfer card to get a lower rate.
• Potential fees. While balance transfer cards can offer very low intro APRs, some charge transfer fees that depend on your transfer amount. Consolidation loans generally charge an origination fee or flat fee — often a percentage of the amount you’re borrowing.
• Your repayment plan. Both balance transfer cards and loans offer limited terms, so planning your monthly payments accordingly can get you out of debt before your term is up. Failure to make your payments on time can cost you fees and could end a balance transfer card’s promotional period.

Which option is better if I have good credit?

It’s understandable to be concerned about how consolidating your debt could affect your credit, especially when you have a good credit score to maintain. Applying for both consolidation loans or balance transfer cards can affect your credit, though not always negatively. Consider:

• Hard inquiries. Applying for a card or loan often results in a hard inquiry. This can hurt your credit in the short term, though usually for no longer than a year.
• Credit utilization. Paying off several of your credit cards can improve your credit score by lowering your credit utilization ratio. Closing these accounts, however, could negatively affect your credit, since your overall utilization rate will go up.
• Your credit mix. Having various types of credit open helps your overall credit score. If all your debt comes from credit cards, a consolidation loan can improve your credit score.
• On-time payments. Making payments on time is essential for your credit score. Missing even one payment on your new account could harm your credit.

How can I consolidate debt without hurting my credit?

To consolidate your debt without hurting your credit, make on-time payments and have a clear idea of your payoff date. Additionally:

• Focus on your new loan. Opening new accounts or continuing to use existing ones can quickly get out of hand after you’ve consolidated. Avoid overextending and focus on paying off your consolidated debt.
• Pay during your intro period. If you qualify for a balance card with a low APR intro period, try paying off your debt in full before the end of the period.
• Do the math. While debt consolidation can make your repayment easier, make sure the cards or loans you qualify for will actually save you money in the long run.

Bottom line

If you have good credit, debt consolidation can help you pay off your debts faster while saving on interest. Compare balance transfer cards against your options for consolidation loans to find the best solution for you.

Frequently asked questions

• Does transferring credit card balances affect my credit score?

  Applying for a balance transfer card typically requires a hard inquiry on your credit, which can negatively affect your score. This is also the case when applying for consolidation loans.

• Does transferring a balance close the account?

  No. Unless you specifically close an account after paying off your balance, your credit card will stay open.

• Can I use my credit card after debt consolidation?

  You can, but the purchase APRs are often high and you could accumulate more debt on top of what you’re trying to pay off.