Best credit card consolidation loans

Credit card consolidation loans are a great fit if you’re looking to save money on interest and simplify your monthly payments.

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as "Credible" below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

Curious about credit card consolidation loans? Read on to find out what these are and the best lenders to help you reach your financial goals. (iStock)

If you have high-interest credit card debt and are having trouble keeping track of when all your different payments are due, you might be considering a credit card consolidation loan. You might also consider consolidation as a way to lower the total interest costs of your debt.

When you take out a credit card consolidation loan — which is a personal loan that you use to pay off existing credit card debt — you’re left with a single loan, ideally with a lower interest rate. People choose these types of loans because they may save money and find it easier to keep on top of payments. 

You can use Credible to compare personal loan rates from multiple lenders in minutes.

What is a credit card consolidation loan?

A credit card consolidation loan is a type of personal loan that you take out to pay off your existing credit card debt. You’ll then start making monthly payments on the new loan. 

Generally, you can use any personal loan to consolidate other debts, although some lenders offer personal loans specifically intended for debt consolidation.

Why use a personal loan to pay off credit card debt?

Consolidating your credit card debt allows you to simplify your repayment plan because you’ll only have one loan to keep up with. 

Credit card consolidation loans may also help you save money, since many personal loan rates tend to be lower compared to credit cards. Depending on what you qualify for, you could save hundreds — or even thousands — of dollars in interest. The average credit card interest rate is around 16%, versus 9.41% for personal loans, according to Experian data. 

When you apply for a personal loan, your application will be evaluated based on factors such as your credit score, employment history, debt-to-income-ratio, income, loan amount, and loan term. Once approved, your lender will send you the loan funds, which you’ll use to pay off your credit card balances. Some lenders also offer the option to pay off your credit card balances directly.

Standard repayment terms for personal loans typically range from 12 to 60 months, though some lenders may offer longer repayment terms.

Best credit card consolidation loans 

The best way to find competitive rates and terms is to shop around with various lenders. To help you get started, here are the Credible partner lenders that offer credit card consolidation loans. 

Avant

Avant may give you a personal loan even if your credit is less than great.

  • Loan amounts: $2,000 to $35,000
  • Minimum credit score: 550
  • Loan terms: 2 to 5 years
  • Fees: Origination fee of up to 4.75%; late payment; dishonored payment
  • Might be good for: People with poor to fair credit

Axos Bank

Axos Bank doesn’t charge a prepayment penalty, making it a good option if you're looking to be debt-free sooner. 

  • Loan amounts: $5,000 to $50,000
  • Minimum credit score: 700
  • Loan terms: 3 to 6 years
  • Fees: Origination fee of up to 2%; late payment; insufficient funds
  • Might be good for: People with good to excellent credit

Best Egg

Best Egg offers competitive rates and considers other factors aside from your credit score, which means you may have an easier time qualifying for a personal loan.

  • Loan amounts: $2,000 to $50,000
  • Minimum credit score: 600
  • Loan terms: 2 to 5 years
  • Fees: Origination fee of 0.99% to 5.99%; late payment
  • Might be good for: People with fair to good credit

Discover

Discover offers long repayment terms and doesn’t charge any origination fees, which could save you some money. 

  • Loan amounts: $2,500 to $35,000
  • Minimum credit score: 660
  • Loan terms: 3 to 7 years 
  • Fees: Late payment
  • Might be good for: People who want more time to repay their loan

FreedomPlus

FreedomPlus may offer you a better interest rate if you use at least 85% of your loan funds toward consolidating debt, show proof of retirement savings, or add a cosigner.

  • Loan amounts: $10,000 to $50,000
  • Minimum credit score: Does not disclose
  • Loan terms: 2 to 5 years
  • Fees: Origination fee of 1.99% to 4.99%
  • Might be good for: People who want to consolidate high-interest debt

LendingClub

LendingClub allows cosigners for its personal loans and offers low minimum borrowing amounts, which is good if you don't need to consolidate a lot of debt. 

  • Loan amounts: $1,000 to $40,000
  • Minimum credit score: 600
  • Loan terms: 3 or 5 years
  • Fees: Origination fee of 3% to 6%; late payment
  • Might be good for: People who need a cosigner

LendingPoint

LendingPoint is a great fit for those who have low credit scores, and you have up to five years to repay the loan. 

  • Loan amounts: $2,000 to $36,500
  • Minimum credit score: 580
  • Loan terms: 2 to 5 years
  • Fees: Origination fee of 3% to 6%
  • Might be good for: People with poor or bad credit

LightStream

LightStream doesn't charge any fees and offers high loan amounts. You'll also qualify for a 0.50% rate reduction if you sign up for autopay. 

  • Loan amounts: $5,000 to $100,000
  • Minimum credit score: 660
  • Loan terms: 2 to 7 years
  • Fees: None
  • Might be good for: People who need a larger loan

Marcus

Marcus by Goldman Sachs is another lender that doesn't charge any fees. Marcus lets you defer one monthly payment, interest-free, if you’ve made on-time payments 12 months in a row. 

  • Loan amounts: $3,500 to $40,000
  • Minimum credit score: 660
  • Loan terms: 3 to 6 years
  • Fees: None
  • Might be good for: People who want tailored monthly payment options

OneMain Financial

OneMain Financial doesn't have a minimum credit score requirement, which makes it a great fit if your credit is below average. Plus, the lender offers fast loan funding and the opportunity to qualify for larger loan amounts for previous borrowers. 

  • Loan amounts: $1,500 to $20,000
  • Minimum credit score: None
  • Loan terms: 2 to 5 years
  • Fees: Origination fee
  • Might be good for: People with below-average credit

Payoff

Payoff offers debt consolidation loans, as well as tools to help you with your finances.

  • Loan amounts: $5,000 to $40,000
  • Minimum credit score: 600
  • Loan terms: 2 to 5 years
  • Fees: Origination fee of up to 5%
  • Might be good for: People who want to consolidate credit card debt

PenFed

PenFed allows cosigners and offers a wide range of loan amounts, though you'll need to become a PenFed member to take out a loan.

  • Loan amounts: $600 to $50,000
  • Minimum credit score: 660
  • Loan terms: 1 to 5 years
  • Fees: None
  • Might be good for: PenFed members who need a small loan or a cosigner

Prosper

Prosper is a peer-to-peer lender and doesn’t charge a prepayment penalty. 

  • Loan amounts: $2,000 to $40,000
  • Minimum credit score: 640
  • Loan terms: 3 or 5 years
  • Fees: Origination fee of 2.4% to 5%; late payment
  • Might be good for: People who want the option to pay off their loan early

SoFi

SoFi offers high borrowing amounts and longer repayment terms. The lender also offers perks to its borrowers, such as unemployment protection and career coaching. 

  • Loan amounts: $5,000 to $100,000
  • Minimum credit score: Does not disclose
  • Loan terms: 2 to 7 years 
  • Fees: None
  • Might be good for: People who like extra perks

Universal Credit

Universal Credit offers fast funding times and tools to assist borrowers in building their credit. 

  • Loan amounts: $1,000 to $50,000
  • Minimum credit score: 560
  • Loan terms: 3 to 5 years
  • Fees: Origination fee of 4.25% to 8%
  • Might be good for: People who want to build their credit

Upgrade

Upgrade offers fast funding, free financial education resources, and autopay discounts, but its loans aren’t available in West Virginia.  

  • Loan amounts: $1,000 to $50,000
  • Minimum credit score: 560
  • Loan terms: 2 to 6 years
  • Fees: Origination fee of 2.9% to 8%
  • Might be good for: People who want fast loan funding

Upstart

Upstart is geared toward borrowers with little or no credit history, and also considers your education and job history when you apply for a loan. 

  • Loan amounts: $1,000 to $50,000
  • Minimum credit score: 580
  • Loan terms: 3 to 5 years
  • Fees: Origination fee of up to 8%; late payment; returned check
  • Might be good for: People with little or no credit history

Credible lets you compare personal loan rates without affecting your credit score.

Other lenders to consider

The following three lenders are not Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform. But they may also be worth considering if you’re looking for a credit card consolidation loan.

PNC Bank

PNC Bank offers low loan amounts and doesn't charge common fees, such as origination fees or prepayment penalties. 

  • Loan amounts: $1,000 to $35,000
  • Minimum credit score: Does not disclose
  • Loan terms: Check with lender
  • Fees: Late payment
  • Might be good for: People who want a smaller loan

Rocket Loans

Rocket Loans offers relatively low loan amounts and doesn’t charge prepayment penalties, but the lender’s repayment terms are limited.  

  • Loan amounts: $2,000 to $45,000
  • Minimum credit score: Does not disclose
  • Loan terms: 36 or 60 months 
  • Fees: Origination fee of 1% to 6%; late payment; returned check
  • Might be good for: People who don’t mind limited repayment terms

Wells Fargo

Wells Fargo offers a lot of customization with its wide range of personal loan amounts and terms, though you may need to be an existing customer to qualify for the best rates. 

  • Loan amounts: $3,000 to $100,000
  • Minimum credit score: Does not disclose
  • Loan terms: 12 to 84 months 
  • Fees: Late payment; returned payment
  • Might be good for: Existing Wells Fargo customers

Methodology

Credible evaluated the best credit card consolidation loan lenders based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, and fees. Credible’s team of experts gathered information from each lender’s website, customer service department, and via email support. Each data point was verified to make sure it was up to date.

How to get a credit card consolidation loan

To get a credit card consolidation loan, follow these steps:

  • Determine how much you need to borrow. Add up all your existing credit card debt to figure out the amount you’ll need to borrow from a personal loan lender.
  • Compare lenders. Shop around and compare rates and terms from at least three lenders. This ensures you’ll find the best loan for your financial situation. Look at features such as rates, fees, repayment terms, and application requirements.
  • Apply for the loan. Once you’ve selected a lender, fill out an application and submit the required documents, such as proof of income, bank statements, and W-2s.
  • Receive your loan funds. After you’re approved, give the lender your bank information (or details for another funding method). Depending on your lender, you could receive your funds as soon as the next business day, though some personal loans can take up to seven business days or longer to fund.

If you’re ready to apply for a loan, Credible lets you easily compare personal loan rates to see what you may qualify for.

Should I take out a credit card consolidation loan?

Before taking out a credit card consolidation loan, consider these benefits and drawbacks:

Benefits of credit card consolidation loans

  • Save on interest — Personal loans typically have lower interest rates compared to credit cards, which will help you save money over the life of the loan.
  • Fixed monthly payments — You’ll know exactly what you’re paying each month, which could make it easier for you to budget loan payments.

Drawbacks of credit card consolidation loans

  • May be difficult to qualify for the best rates — You typically need a high credit score to get the lowest rates. If you have less-than-stellar credit, you may pay higher interest rates.
  • You might get hit with fees — Some lenders charge origination fees, prepayment penalties, and late fees in order to take out a personal loan.

Once you’ve paid off your credit card debt, it’s important not to rack up more credit card charges, which could negate the point of a debt consolidation loan.

Will a credit card consolidation loan hurt my credit score?

Whether a credit card consolidation loan will hurt your credit depends on the type of credit inquiry that a lender runs. When you apply for prequalification, lenders typically run a soft credit check, which won’t hurt your credit.

When you officially apply for a new loan or other financial product, lenders conduct a hard credit inquiry to pull your credit reports. This may cause a drop in your credit score, though it’s usually temporary. Your credit score will typically go back up within a few months, and if you consistently make on-time payments, you may see your score climb even higher. 

Can I get a credit card consolidation loan with a 500 credit score?

You can get a credit card consolidation loan with a 500 credit score, but it might be more challenging. Many lenders offer personal loans to people with bad credit, but if you’re approved you’ll likely pay a higher interest rate than someone with good credit. Some lenders consider other factors beyond your credit score when you apply for a loan, though you may need to meet minimum income requirements. 

If you’re having trouble qualifying for a credit card consolidation loan because of your credit, consider applying with a cosigner who has good or excellent credit. This can increase your chances of getting approved for a loan, and you may receive a better rate than you would by applying on your own.