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.
While most personal loans charge some types of fees, SoFi offers credit card consolidation loans with zero fees — that means no late fees, prepayment penalties or origination fees. It also provides competitive interest rates starting at 8.99% and loan amounts of up to $100,000. And it offers a fast application process, with approval and funding possible as soon as the same day you apply. But you'll need good to excellent credit to qualify for the best rates, or you could end up paying up to 29.49%, which is worse than most credit cards.
Fixed rates from 8.99% APR to 29.99% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 3/06/23 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
With loan amounts from $1,000 to $200,000, rates starting at 6.94% and loan terms from 12 to 120 months, Credible has a wide range of options for credit card consolidation loans. It's a personal loan marketplace, not a direct lender, so you can review multiple offers with a single application, and it only takes a soft credit check to prequalify. And it has solutions for borrowers of all credit types. But its rates could go as high as 35.99%, some lenders may charge origination fees and it has some mixed customers.
Available in all states
Pros
Ability to compare multiple lenders with one application
Most consolidation loans are unsecured, but OneMain Financial offers a secured loan that can help you qualify for a better rate. Or, if you don't have sufficient collateral, OneMain also allows you to add a cosigner, which might be a good option if you have bad credit. But its rates are a little high — with APRs starting at 18% — and it charges origination fees up to 10%, making it a more expensive option than some of the competition.
Not available in: Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont
Not all applicants will be approved. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). If approved, not all applicants will qualify for larger loan amounts or most favorable loan terms. Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Loan approval and actual loan terms depend on your state of residence and your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). APRs are generally higher on loans not secured by a vehicle. Highly-qualified applicants may be offered higher loan amounts and/or lower APRs than those shown above. OneMain charges origination fees where allowed by law. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $500. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Visit omf.com/loanfees for more information. Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. North Dakota: $2,000. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
Time to Fund Loans: Funding within one hour after closing through SpeedFunds must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after loan closing.
Lightstream offers some of the lowest rates around, with APRs starting at 7.99% for credit card consolidation loans. It also doesn't charge origination fees or late fees, and it has loans up to $100,000, which is more than some lenders. Plus, it has a Rate Beat program and a generous 0.05% autopay discount. But you can't prequalify to check your rate like with most lenders, and it only accepts borrowers with good to excellent credit.
Unlike many lenders that offer credit card consolidation loans, Upstart considers more than just your credit score. It also considers your education and employment experience, making it ideal for borrowers with less-than-perfect credit histories. It also offers an easy application process and funding as fast as one business day. Loan amounts range from $1,000 to $50,000, and rates start under 7%. But it charges origination fees up to 12% and only offers two loan terms.
Not available in: Connecticut, Iowa, Maine, Maryland, Nevada, New York, Oklahoma, Oregon, West Virginia
Similar to many lenders, Happy Money charges origination fees on its consolidation loans, but that's it. It doesn't charge late fees, prepayment penalties or even fees for insufficient funds if your bank account comes up short. It also offers competitive rates starting at 8.95% and capped at 17.48% — much lower than most lenders' highest APR. But it only offers credit card consolidation loans, so you'll need to look elsewhere if you need funds for something else.
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:
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 and 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.
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 you can 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.
A credit card consolidation loan can 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 only have one monthly payment to budget for.
Anytime you apply for a consolidation loan, it requires a hard credit check, which can temporarily lower your credit score by a few points. But, if you get the loan and always make on-time payments, your credit score will actually improve and you’ll lower your overall debt burden.
What is a good rate for a credit card consolidation loan?
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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