BEST OF
Best Credit Card Consolidation Loans of April 2021
The best credit card consolidation loans offer low rates, flexible payment terms and direct payment to creditors. Compare your options for credit card consolidation.
A credit card debt consolidation loan is a personal loan that pays off your high-interest credit cards, reorganizing multiple payments into a single, fixed monthly payment over a set term.
Here are credit card consolidation loan options and other factors to help you decide if consolidation works for you.
A credit card debt consolidation loan is a personal loan that pays off your high-interest credit cards, reorganizing multiple payments into a single, fixed monthly payment over a set term.
Here are credit card consolidation loan options and other factors to help you decide if consolidation works for you.
Summary of Best Credit Card Consolidation Loans of April 2021
Lender | NerdWallet Rating | Est. APR | Min. Credit Score | Learn More |
---|---|---|---|---|
Best for Credit card consolidation loans | 5.99 - 24.99% | 640 | on Payoff's website | |
Best for Credit card consolidation loans | 5.94 - 35.97% | 580 | on Upgrade's website | |
Best for Credit card consolidation loans | 8.94 - 35.99% | 580 | on Upstart's website | |
Best for Credit card consolidation loans | 4.49 - 20.49% | 690 | on LightStream's website | |
Best for Credit card consolidation loans | 6.99 - 19.99% | 660 | on Goldman Sachs's website | |
Best for Credit card consolidation loans | 7.99 - 29.99% | 620 | on FreedomPlus's website | |
Best for Credit card consolidation loans | 8.05 - 35.89% | 600 | on LendingClub's website | |
Best for Credit card consolidation loans | 6.99 - 24.99% | 720 | See my rates on NerdWallet's secure website |
Our picks for
Credit card consolidation loans
on Payoff's website
Payoff
Min. Credit Score
Est. APR
Loan Amount
on Payoff's website
on Upgrade's website
Upgrade
Min. Credit Score
Est. APR
Loan Amount
on Upgrade's website
on Upstart's website
Upstart
Min. Credit Score
Est. APR
Loan Amount
on Upstart's website
on LightStream's website
LightStream
Min. Credit Score
Est. APR
Loan Amount
on LightStream's website
on Goldman Sachs's website
Marcus by Goldman Sachs
Min. Credit Score
Est. APR
Loan Amount
on Goldman Sachs's website
on FreedomPlus's website
FreedomPlus
Min. Credit Score
Est. APR
Loan Amount
on FreedomPlus's website
on LendingClub's website
LendingClub
Min. Credit Score
Est. APR
Loan Amount
on LendingClub's website
on NerdWallet's secure website
Discover® Personal Loans
Min. Credit Score
Est. APR
Loan Amount
on NerdWallet's secure website
Should I consolidate credit card debt?
If you’re struggling to keep up with credit card bills, consolidation can give you the breathing room you need to pay down debt. It can lower your payments, reduce interest costs and help you reduce debt quicker. Ideally, the rate you receive on the loan is lower than the combined interest rate on your credit cards. You’ll need good to excellent credit (690 to 850 on the FICO scale) to qualify for the lowest rates.
If your credit card debt is unmanageable — you can’t repay it within five years and the total balance equals half or more of your gross income — then debt relief may be more effective than debt consolidation.
How to get a credit card consolidation loan
Take these steps to start the credit card consolidation loan process.
Know your balances and rates: Add up what you owe on the credit cards you want to consolidate, sorted by total balances and interest rates.
Aim to consolidate cards with rates that are more than the annual percentage rate you can get on a consolidation loan, to save on interest. For example, if the rates on your credit card balances are between 15% and 30% APR, look for a consolidation loan of less than 15% APR.
A loan’s APR is its interest rate plus all fees, including origination fees. Personal loan APRs range from about 6% to 36%, depending on your credit score, annual income, debt-to-income ratio and where you get a loan.
Estimate your savings: Use a debt consolidation calculator to understand how much you can potentially save by consolidating.
The calculator shows your credit card’s combined APR, and you can view how different rates and loan terms impact your payment and savings.
Compare loan features: When shopping for loans, compare features as well as rates. Some lenders offer direct payment to creditors, which means they send your loan proceeds to your credit card issuers, simplifying the debt consolidation process.
Other features that may be important to you include free credit score monitoring, credit health tools or hardship programs that temporarily suspend payments if you lose your job. Time to funding is another consideration if you need a loan fast.
Pre-qualify and apply: Pre-qualifying with lenders lets you preview the rates and loan terms you may receive, with no effect on your credit score. It also makes it easier to compare loans from multiple lenders.
After pre-qualifying and comparing options, you can formally apply for a personal loan.
Get approved and funded: Debt consolidation loans can take one day to a week to get funded, depending on the lender.
If the lender directly pays your creditors, check to ensure the payments are applied to your balances. If direct payment isn’t offered, you’ll need to pay off each credit card with the money deposited to your bank account.
Get ready to make your first new loan payment, which will likely be one month after funding.
Credit card refinancing vs. debt consolidation
Refinancing credit card debt is similar to consolidation, but instead of getting a personal loan to pay off your credit cards, you get a low-interest credit card and transfer the balance from one or more existing credit cards onto the new card.
Refinancing is often called balance transfer, and many balance transfer credit cards offer a 0% introductory APR for a period of 12 to 18 months. Like personal loans, you'll need good or excellent credit to qualify for the lowest rates.
Unlike debt consolidation loans, there is no set repayment term on a credit card (just a minimum payment requirement), and rates are often variable instead of fixed.
Balance transfers work best if you have a small balance to consolidate ($15,000 or less), and only if the interest savings outweigh any fee required to carry out the transfer. Aim to pay off the balance in full before the zero-interest promotion expires and the APR resets to its normal, higher rate.
What to do after consolidating credit cards
Plan your payments: If you didn't opt for automatic payments at loan closing, doing so now makes for convenient and on-time monthly payments, helping you avoid late fees. Auto payments are one way to manage your loan payments.
Stick to a budget: The new loan payment should fit into a budget that allocates income toward your needs, wants, savings and debt. Budgeting can help you change your spending habits, spot areas to cut back and boost your cash flow.
Avoid new credit card debt: You’ll have a lot more spending power on your credit cards after consolidating them, and there may be some temptation to use them. Track your spending carefully and aim to keep your credit utilization ratio below 30% on each card.
Last updated on April 2, 2021
Methodology
NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.
To recap our selections...
NerdWallet's Best Credit Card Consolidation Loans of April 2021
- Payoff: Best for Credit card consolidation loans
- Upgrade: Best for Credit card consolidation loans
- Upstart: Best for Credit card consolidation loans
- LightStream: Best for Credit card consolidation loans
- Marcus by Goldman Sachs: Best for Credit card consolidation loans
- FreedomPlus: Best for Credit card consolidation loans
- LendingClub: Best for Credit card consolidation loans
- Discover® Personal Loans: Best for Credit card consolidation loans