Unfortunately, it’s easy for credit card debt to get out of control. All it takes is an emergency or two, a job loss or poor spending habits to find yourself with more credit card debt than you can easily pay off. In fact, the average US household with credit card debt carries a balance of about $6,000, according to the Federal Reserve of St. Louis.
But a credit card consolidation loan can be a good option to help lower or eliminate high-interest credit card debt. Check out our top picks for consolidation loans, with options for borrowers with a range of credit scores.
Our loan experts compared dozens of lenders before narrowing down the best personal loans for credit card consolidation in the current market, and we regularly review our selections. Factors we consider include loan amounts, interest rates, fees, reputation and customer reviews.
Factors weighed in our methodology for the best consolidation loans include:
We currently don't have that product, but here are others to consider:
How we picked these
What is the Finder Score?
The Finder Score crunches 6+ types of personal loans across 50+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
How to prequalify for a credit card consolidation loan
Prequalifying for a consolidation loan can give you an idea of the rates and terms you might qualify for without affecting your credit, and it’s a good way to compare consolidation lenders to find the best deal. Here’s how it works:
Fill out an online application, call or visit a physical location.
Undergo a soft credit check.
Find out if you prequalify.
Review your loan offer.
Compare offers from multiple lenders.
Formally apply with a hard credit check.
5 tips to get the lowest-rate credit card consolidation loan
The whole point of getting a credit card consolidation loan is to refinance your debt at a lower rate and save money. Here are a few ways that can help you get the best rate.
Get a cosigner. A friend or family member with excellent credit, who’s willing to cosign your loan, can help you qualify for the most competitive rate.
Check your credit. Get a free copy of your credit report and look for any errors or inaccuracies. If you find any mistakes, you can dispute them, have them removed and watch your credit score jump. The higher your score, the lower the rate you’ll qualify for.
Look for rate discounts. Lenders often have relationship discounts, autopay discounts or others that can lower your rate. For example, SoFi offers a 0.25% rate discount if you choose to have it pay your creditors directly.
Compare multiple lenders. Prequalifying with three or four lenders can help you find the best deal.
Watch out for fees. If a lender offers you a low interest rate, but tacks on a 10% origination fee, it may not be worth it. If your credit is good, you should be able to qualify with a lender that doesn’t charge origination fees.
Alternatives to credit card consolidation loans
If you don’t qualify for a personal loan for debt consolidation or just want to explore more options, consider these alternatives to taking out a loan.
Credit counseling. Many nonprofit credit counseling agencies offer free or low-cost services to help you develop a budget and a debt repayment plan rather than resorting to a loan.
Use a debt repayment strategy. To tackle credit card debt on your own, consider an avalanche or snowball repayment method. The avalanche strategy involves paying as much as possible on your highest-interest debt first while paying the minimums on other cards. The snowball method suggests focusing on your smallest debt first and working your way up.
Get a side gig. Bring in some extra cash in your free time by picking up a side hustle and using that money to pay off your credit cards.
Sell your stuff. Purge yourself of belongings you don’t use anymore and put that money toward your debt. You can use Craigslist, Facebook Marketplace or have an old-school garage sale.
Negotiate with creditors. If you’re really having a tough time paying down your cards, talk to your creditors to see if you can get a reduced rate or come up with an alternative payment plan.
Consider debt settlement. If you think your credit card debt is going to drive you to bankruptcy, look into a debt settlement program. It can be risky and expensive, however, so consider it only as a last resort.
Frequently asked questions
A credit card consolidation loan may be a great idea if you can refinance your debt at a lower interest rate than you're paying on your cards. You'll not only save on interest charges, but you'll have just one monthly payment to budget for.
Applying for a consolidation loan requires a hard credit check, which can temporarily lower your credit score by a few points. But if you get the loan and consistently make on-time payments, your credit score will actually improve and you'll lower your overall debt burden.
Any rate lower than what you currently pay on your credit cards is a "good" rate. Even an APR that's only a couple of points lower can save you hundreds or even thousands of dollars in interest, depending on how much you owe.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf.
See full bio
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Learn how to pay off credit card debt faster and possibly with a lower APR. Find out if credit card consolidation hurts your credit score.
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Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
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