Best credit card consolidation loans of 2023

Want to manage your credit card debt? Learn how credit card consolidation loans can help you reach your financial goals. (iStock)

If you’re trying to keep track of multiple due dates for your credit cards, a credit card consolidation loan can allow you to pay off your high-interest credit cards and leave you with a single monthly payment. You might even be able to lower your interest costs.

When considering a credit card consolidation loan, it’s important to shop around to save on interest and find a repayment term that works for your financial situation.

If you want to consolidate credit card debt, Credible lets you easily compare personal loan rates from various lenders in minutes.

• What is a credit card consolidation loan?
• Why use a credit card consolidation loan?
• How do you apply for a credit card consolidation loan?
• Best credit card consolidation loans 
• Credit card consolidation loan FAQs

What is a credit card consolidation loan?

A credit card consolidation loan is an unsecured personal loan that you take out to pay off your current credit card debt. You’ll then begin making monthly payments on the new loan. 

You can also consolidate other forms of debt with a personal loan, but many lenders offer loans specifically for debt consolidation, and some personal loan lenders will pay your creditors for you directly. 

Why use a credit card consolidation loan?

Using a credit card consolidation loan may be a smart move because it can help you stay on top of your debt payments. Instead of paying multiple credit card bills with multiple due dates, you’ll only have one monthly payment to keep track of.

A credit card consolidation loan can also help you save money on interest, since many credit cards have higher interest rates compared to personal loans. The average interest rate for a 24-month personal loan was 9.09% as of November 2021, while the average credit card interest rate during that time was 16.44%, according to Federal Reserve data. This could add up to hundreds, or even thousands, of dollars in interest savings.

How do you apply for a credit card consolidation loan?

Applying for a credit card consolidation loan is generally a straightforward process, assuming you have the right documentation in place. Though each lender has its own application requirements, you’ll generally follow these steps to get a credit card consolidation loan:

• Decide on your loan amount. Determine which credit cards you want to pay off and add up all the debt so you’ll know exactly how much you need to borrow from a personal loan lender.
• Shop around. Comparing multiple lenders will allow you to find the best rate and terms for your financial situation. Getting prequalified with three to five lenders is a good starting point. This lets you see what rates a lender is likely to offer you, without affecting your credit score. Look at each lender’s repayment terms, interest rates, fees, loan amount and eligibility requirements.
• Apply. Apply with the lender you selected and submit any required documentation, such as bank statements, W-2s and pay stubs.
• Wait for approval and receive loan funds. After submitting your application, you may need to wait to see whether you’re approved. If the lender approves you, you’ll sign your loan agreement and provide the lender with your preferred funding method or bank details if you want to receive your loan funds via bank transfer. You may need to wait up to seven business days to receive the money, though many lenders fund loans as soon as the next business day.

Use Credible to help you easily compare credit card consolidation loans to see what you may qualify for, without affecting your credit. 

Best credit card consolidation loans 

If you need a loan to consolidate credit card debt, these five Credible partner lenders are a great place to start.

Best for bad credit: Avant

Avant discloses a low minimum credit score, and you can receive funding as soon as the next business day. Although the lender’s advertised rates may be competitive for borrowers with this credit profile, the lender does charge an origination fee of up to 4.75%.

• Minimum credit score: 550
• Loan amounts: $2,000 to $35,000
• Pros: Fast funding time
• Cons: Charges late and origination fees

Best for peer-to-peer lending: LendingClub

This peer-to-peer lender stands out because it allows cosigners. LendingClub has a low minimum loan amount if you only need to borrow a little money, but it does charge an origination fee of 3% to 6% of the loan amount. 

• Minimum credit score: 600
• Loan amounts: $1,000 to $40,000
• Pros: Allows cosigners; fair credit borrowers are eligible
• Cons: Charges late and origination fees

Best for high-income earners with good credit: LightStream

LightStream advertises some of the lowest personal loan rates, though you’ll need a good credit score to qualify. The lender offers a wide range of repayment terms and high loan amounts. 

• Minimum credit score: 660
• Loan amounts: $5,000 to $100,000
• Pros: Offers competitive rates and large loan amounts
• Cons: Doesn’t disclose minimum income requirements; not available in all states

Best for low fees: Marcus by Goldman Sachs

Marcus by Goldman Sachs allows borrowers to take out up to $40,000 with a three- to six-year term. While the lender doesn’t charge any fees, those with less-than-fair credit may not qualify. 

• Minimum credit score: 660
• Loan amounts: $3,500 to $40,000
• Pros: Doesn’t charge fees; offers an autopay discount
• Cons: Doesn’t disclose minimum income requirements

Best overall credit card consolidation loan: SoFi

SoFi offers loans of up to $100,000 with terms ranging from two to seven years. In addition to its competitive advertised rates, the lender stands out because borrowers receive access to unique benefits, such as investing advice and unemployment protection. 

• Minimum credit score: Does not disclose
• Loan amounts: $5,000 to $100,000
• Pros: Doesn’t charge fees; offers investing advice
• Cons: Doesn’t disclose minimum income or credit score requirements

Credible makes it easy to see your prequalified personal loan rates from these and other lenders, all in one place.

Other lenders to consider

The following three lenders aren’t 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.

Earnest

Earnest partners with lending platform Fiona to match you with personal loan options.

• Minimum credit score: Varies depending on lender
• Loan amounts: $1,000 to $250,000
• Pros: Flexible repayment terms
• Cons: No guarantee of loan approval

Laurel Road

Laurel Road doesn’t charge any fees on its personal loans, and you can choose from repayment terms of three, four or five years. 

• Minimum credit score: Does not disclose
• Loan amounts: $5,000 to $35,000
• Pros: Offers an autopay discount
• Cons: Few repayment terms

Mariner Finance

Mariner Finance offers repayment terms ranging from one to five years, as well as personalized service.

• Minimum credit score: Does not disclose
• Loan amounts: $1,000 to $25,000
• Pros: Offers smaller loan amounts if you don’t need a large personal loan
• Cons: No repayment term longer than five years

Methodology

Credible’s main goal is to give consumers the resources to make more confident financial decisions. To determine the best credit card consolidation lenders, Credible looked at data with various weightings for categories such as fees, time to fund loans, repayment terms, loan amounts and overall customer experience. Credible ranked all the lenders in this list using these categories and weightings to arrive at a rating out of five stars. 

Credit card consolidation loan FAQs

Here are answers to some common questions about credit card consolidation loans.

What are the benefits of credit card consolidation?

Credit card consolidation has two main benefits: simplifying your monthly payments and saving on interest.

Since you’re paying off all your credit card debt with one consolidation loan, it may be easier to keep up with payments. Many credit card consolidation loans come with fixed interest rates, so you’ll know exactly how much you’ll need to pay each month and when your loan will be paid off, helping you plan better. 

What are the drawbacks of a personal loan to consolidate credit card debt?

Getting a credit card consolidation loan is still taking out a loan, so you’ll want to make sure you can fit the monthly payments into your budget. Plus, if you plan on using your credit card after paying off the debt, it may negate the point of getting a consolidation loan in the first place. Getting deeper into debt could hurt your financial situation and ability to get approved for credit products in the future. 

While you can save money on interest with a credit card consolidation loan, you’ll only qualify for the best rates if you have good to excellent credit. If you have fair credit, you may be able to find competitive rates, but if you have bad credit, you may not receive an interest rate on a credit card consolidation loan that’s lower than the interest rate you’re paying on your current credit cards. 

Even if you qualify for the lowest rates, you could be hit with origination fees for processing your loan, late fees if you miss a payment, or prepayment penalties for paying the loan off ahead of schedule. That’s why it’s important to check the lender’s terms and compare loans so you understand all costs involved before signing a loan agreement. 

Should you get a balance transfer credit card or credit card consolidation loan?

Transferring your high-interest credit card balances to another credit card with a lower interest rate could help you save money, but it comes with its own advantages and disadvantages. 

Here are some things about balance transfer credit cards to consider before making your decision:

Pros

• If you can get a 0% introductory APR credit card and pay off the balance before the promotional period ends, you won’t pay any interest.
• Some credit cards may earn you rewards or cash back.

Cons

• You may be charged a fee for each balance that you transfer to the new card (typically 3% to 5% of the transferred amount).
• You may have a limit to how much you can transfer.

Here are some things about credit card consolidation loans to consider before you make your decision:

Pros

• You may be able to get a lower APR compared to a credit card.
• You’ll have a fixed repayment term and interest rate, so you’ll know exactly how much your monthly payments will be and when you’ll pay the loan off.

Cons

• Depending on your credit, you may not be approved for the amount you need or for the lowest interest rate.
• The lender may charge origination or application fees for processing your loan.

How long does it take to get approved for a credit card consolidation loan?

How long it takes to get approved for a credit card consolidation loan depends on the lender, your bank and whether you’ll need to submit additional documentation during the application process. Some lenders offer loan funding in as little as the same or next business day after approval. Others can take up to seven days to send the loan funds to your bank account.

Can you get a credit card consolidation loan with a low credit score?

If you have a low credit score, you may be able to get a credit card consolidation loan. But it can be more challenging to meet a lender’s minimum credit score requirements for approval. Some lenders specialize in loans for people with bad credit, but keep in mind that you’ll most likely pay a higher interest rate. Other lenders consider factors beyond your credit score, such as your income, when deciding whether to loan you money.

If you’re having trouble getting approved for a credit card consolidation loan, or you want a better rate, consider submitting an application with a cosigner who has good to excellent credit. It’s a smart idea to talk with your cosigner to make it clear how you plan to repay the loan, and to make sure they understand they’ll be responsible for making your loan payments if you aren’t able to.