More than 4 in 10 Americans with credit card debt owe at least $15,000, according to our recent survey. For people who are looking to get rid of such high-interest debt, credit card consolidation loans can help.
“With a fixed-rate loan, you can eliminate high credit card fees and improve your credit score, all while reducing your interest rates and simplifying your finances,” said Alia Dudum, a spokeswoman for LendingClub, an online peer-to-peer lender.
But it can be easy to get overwhelmed by all the available credit card consolidation loans — another name for personal loans used for consolidation — and it’s not always easy to know how to compare their offers.
We’ve put together a list of the top personal loan companies that can help you pay off your credit card debt.
The best 5 credit card consolidation loans
There’s no one-size-fits-all best consolidation loan for everyone. Depending on your credit profile, goals, and personal preferences, one lender might be better than another.
So, the more information you have on potential lenders, the easier it will be to know which one works best for you.
Here are the top options. The APRs were current as of May 2, 2018. For the latest rates and terms, visit the lender websites below.
|Personal loan company||Origination fee||APR range||Loan amounts||Repayment terms||Minimum credit score|
|Citizens Bank||None||5.99% – 18.99%||$5,000 – $50,000||3, 4, 5, 6, and 7 years||680|
|Earnest||None||6.99% – 18.24%||$5,000 – $75,000||3, 4, and 5 years||680|
|SoFi||None||6.26% – 14.87%||$5,000 – $100,000||3, 5, and 7 years||None|
|FreedomPlus||0% – 5%||4.99% – 29.99%||$10,000 – $35,000||2, 3, 4, and 5 years||640|
|LendingClub||1% – 6%||6.16% – 35.89%||$1,000 – $40,000||3 and 5 years||600|
Citizens Bank: Best for existing customers
Citizens Bank offers an interest rate reduction of up to 0.50% if you meet certain requirements. You’ll get a 0.25% reduction if you sign up for automatic payments, and another 0.25% if you have a qualifying Citizens Bank account before you apply. Qualifying accounts include:
- Deposit accounts, including checking, savings, money market, and certificate of deposit
- Home loans, including mortgage, home equity, and home equity line of credit
- Other loans, including auto, student, and other personal loans
- Credit cards
The lender’s 680 minimum credit score requirement is high, but it offers the most flexible repayment terms. You can get a rate quote from Citizens Bank with a soft credit check, which doesn’t impact your credit.Visit Citizens Bank
Earnest: Best for borrowers with a strong financial profile
Earnest approaches the underwriting process in a way that’s different from a lot of lenders. Rather than focusing on your credit score, the lender considers your full financial profile, including factors such as:
- Savings patterns
- Employment history
- 401(k) and investments
- Growth potential
Of course, you’ll need to have a decent credit score of 680 to get approved. But a good overall financial picture could improve your chances of scoring a lower interest rate.
Like the other lenders listed, Earnest allows you to see your rate offers without undergoing a hard credit check.Visit Earnest
SoFi: Best for large credit card balances
You can borrow up to $100,000 from SoFi. The high amount might sound crazy, but it’s not unheard of for someone to be that deep in credit card debt. Another major perk to getting credit card consolidation loans from SoFi is that you can get help if you lose your job through no fault of your own.
The lender’s Unemployment Protection Program makes it possible to get up to 12 months of forbearance on your loan payments, in three-month increments. You also will have the chance to work with SoFi’s career coaching team to find a new job.
Other benefits of being part of the SoFi community include:
- A 0.125% rate discount on your new loan if you have another SoFi loan
- Career coaching available even if you’re employed
- Fees waived if you invest with SoFi Wealth
- Access to exclusive community networking events
- Seed financing for your business idea
While SoFi doesn’t require a minimum credit score, you likely will need good or excellent credit to gain approval for a loan. You can get rate quotes with a soft credit check.Visit SoFi
FreedomPlus: Best if you have excellent credit and a cosigner
FreedomPlus offers a wide range of interest rates, and its lowest rate doesn’t require any special discounts.
That said, the lender is clear about how you can get the best interest rate it offers. You’ll need excellent credit for a loan of $15,000 with a 24-month repayment period. Plus, you’ll need to qualify for two out of three other requirements, including:
- Adding a cosigner who has sufficient income
- Using at least 50% of the loan proceeds to pay off existing debt
- Showing proof that you have at least $40,000 in retirement savings
You can see which rates you might qualify for with a soft credit check. The loan might not be a good choice, however, if you have less than $10,000 in credit card debt because that’s the minimum loan amount.Visit FreedomPlus
LendingClub: Best for fair credit
“With LendingClub, borrowers save on average $300 per month when using personal loans to consolidate debt,” said Dudum. The company’s minimum credit score is 600, making it possible for people who don’t have good or excellent credit to qualify. But you likely will need a decent credit score or a cosigner to score a reasonable interest rate.
Also, it charges an origination fee, which can be as high as 6% of your loan amount. LendingClub will deduct the fee from the loan disbursement. So, if you borrow $10,000 with a 5% origination fee, you’ll receive $9,500. If you need the full $10,000, you’d need to borrow $10,527.
LendingClub’s range of interest rates is wide, so you can see your rate offer with a soft credit check.Visit LendingClub
Are these credit card consolidation loans right for you?
Credit card consolidation loans can make it easier to pay off your credit card debt. “Fixed interest rates and one, easy monthly payment makes your monthly cash flow more stable,” said Dudum. “You don’t have to worry about compounding additional interest or your balance increasing.”
But it’s important to look at all your options before applying for a loan.
For example, a balance transfer credit card with a 0% APR promotion can make it easy to pay down smaller balances without paying interest charges. But most of these cards charge high interest rates once the promotional period ends. So if you don’t pay off the balance in full, you could end up right where you were in the first place.
Compare credit card consolidation loans and balance transfer cards to determine which is better for your situation. Look at interest rates, fees, repayment terms, promotional periods, and other factors that are important to you.
As you take the time to research all your options, it’ll be easier to find the best one for your situation.
Improving your chances of getting approved
As you’re deciding between a balance transfer credit card and a credit card consolidation loan, consider what you’re eligible for and how to get approved with favorable terms.
“When you apply for a loan, we consider a few factors,” said Dudum, “including your loan application, information provided about you by credit bureaus, credit score, and other information that predicts the likelihood that you’ll make payments on time.”
If you’re having a hard time getting a quoted rate below what you’re paying on your credit card, check your credit report and see which areas you can improve. A few examples include:
- Check for errors you can dispute with the credit bureau.
- Pay down high credit card balances.
- Get caught up on late payments.
It can take time, but getting a consolidation loan with a low rate can save you a lot of time and money as you pay down your debt.
Note: Student Loan Hero has independently collected the above information related to credit card consolidation loans. The above lenders have neither provided nor reviewed the information shared in this article.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|