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Best Credit Card Consolidation Loans
Credit card debt consolidation is a smart choice if you want to pay off your credit card balances faster and with lower interest rates. It’s an excellent strategy to improve your credit score as well as your financial life.
Best Credit Consolidation Loans for December 2024
Upgrade
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Thanks to its straightforward application process, almost instant funding, and flexible payment terms, Upgrade is applauded by numerous clients across the US. It offers many beneficial features, like paying creditors directly and checking your rates without affecting your credit score. Moreover, you can apply for a joint loan and qualify for more affordable loan terms. Read more
- •Co-signed credit card consolidation loans
- •Quick funding
- •Direct payments to creditors
Marcus by Goldman Sachs®
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Marcus has one of the lowest APR in the industry, which is why so many clients use its services. It also offers loans with flexible repayment terms. Moreover, this is one of the rare providers that provide loans without the origination fee or other fees. Read more
- •Smooth application process
- •Excellent mobile app
- •Flexible loan terms
Avant
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Founded in 2012, Avant is a Chicago-based online lender that offers unsecured and secured personal loans for borrowers with a low credit score. Customers praise its uncomplicated application process, functional mobile app, as well as option to change payment days. However, its interest rates can be too high, and the company also offers long term loans. Read more
- •Loan-tracking mobile app
- •Soft inquiry during the pre-application process
- •Flexible repayment terms
Happy Money
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Happy Money offers personal loans to consolidate credit card debt. The company’s loans go up to $40,000 with long repayment schedules. Happy Money doesn’t charge any fees aside from the origination fee. Read more
- •Borrow up to $50,000
- •Soft inquiry to check your loan rates
- •Competitive rates for a good credit score
Top Credit Card Consolidation Loans in 2024:
- Marcus by Goldman Sachs - Best for low interest rates
- Upgrade - Best for paying off debts directly
- Avant - Best for borrowers with low credit scores
- Happy Money - Best for clients with high credit card debts
Our Criteria for Evaluating Credit Card Consolidation Loans
Credit card debt consolidation loans are personal loans that let you pay off your credit card balances all at once. It means you have one bill to pay every month instead of several.
Because the loans generally have lower interest rates, there’s a good chance the monthly payment will be less than you were paying. Getting your credit card balances down to zero all at once is good for your credit score too.
To find the best possible solution for your budget, we chose only reputable lenders and compared them based on the following criteria:
Loan Amount
Credit card consolidation companies differ based on the minimum and maximum limits of the loans they make. It’s important to pick a lender whose loans will cover the total outstanding balance on your credit cards. Before you choose a lender, see how much you owe on your cards.
Although some lenders let you borrow more than your outstanding debt, it’s better for your financial health and your credit rating if you borrow only the amount you need to pay off your cards.
Interest Rates and Payments
It is the interest rate that determines the size of your monthly payments. Lenders generally offer lower rates than the interest you’re currently paying on your credit card balances. The best debt loan for you is the one with the lowest APR.
Most borrowers find the payments smaller than the combined minimum payments they were making to credit card companies.
Fees
Most lenders charge an origination fee at the beginning of the loan’s term. Lenders generally let you add it to the amount you are borrowing so you don’t need to come up with the cash. You should include the origination fee in your calculations as you decide how much you need to borrow.
In addition to origination fees, some lenders charge administration fees, fees for late payments, and fees for paying off the loan early.
Application Process
We prefer an easy, fast application process. When a company reviews your loan application, it should quickly send you one or more loan offers. The best providers may make a “soft” credit inquiry, which doesn’t affect your credit score, when deciding which loans to offer you.
In most cases, borrowed funds arrive in your bank account one business day after your loan is approved, but with some lenders, you might need to wait for a couple of days.
Repayment Schedule
It is better to pay off your loan quickly, but the shorter the term, the higher the monthly payments. The best repayment schedule is the fastest one you can afford. To ensure that you have plenty of options, you should choose loans whose providers offer flexible repayment terms. In most cases, loan terms can be as short as two years or as long as six.
Additional Features
Mobile apps, an auto-pay option, and changeable payment dates are available with some lenders. They’re not the most important factors in picking a loan, but if you’ve narrowed the list to two, these factors could make a difference.
Customer Reviews
It’s always smart to see what borrowers say about lenders. You can find lots of reviews at Trustpilot or the Better Business Bureau website. Borrower feedback can help you discover which lender offers the best service.
Detailed Reviews of Credit Card Consolidation Loans
Upgrade
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
The lender has been around for a decade. In 2017 it started focusing on online and mobile banking systems that allow them to reduce fees on everyday transactions. More than 10 million clients have secured personal loans and lines of credit from Upgrade over the past three years.
In addition to loans, Upgrade offers credit monitoring and educational support tools for clients who want to improve their finances.
Types of Financing
Upgrade offers two types of financial products: personal loans and lines of credit. Upgrade is a direct lender, and its loans are available for borrowers who have good credit scores.
The lender offers an option to disburse funds directly to creditors.
Regardless of how many credit or debit cards you need to pay off, you can erase your balances directly through the Upgrade platform - and you’ll also get great discounts.
Another good thing about Upgrade is that you can apply for a loan with a co-signer. A co-signer signs for a loan and can help you get the loan amount you want. Only a few companies allow this option. A co-signer can also help you get better loan terms and more affordable rates. For lenders, it’s an extra guarantee that you’ll be able to pay off the loan.
Application Process
Upgrade is an online lender, so if you want to get a personal loan, you need to apply through the website. Even if you never applied for a loan online before, you’ll find filling out the application a smooth, fast process.
Before you apply for a loan and allow the lender to make a “hard” credit inquiry, you should confirm that Upgrade is the best choice for your personal needs. Once you arrive at the website, you’ll see boxes where you can type the loan amount you need and select the loan purpose.
This is a pre-qualifying stage of the application process. During this phase, the lender will make only a soft credit pull, which won’t affect your credit score.
As soon as your loan is approved, you can expect money in your account within one business day.
Loan Features
At Upgrade, you can apply for loans that range from $1,000 to $50,000. Its consolidation loans require a credit score of 560 or higher. It’s also not the best option for borrowers seeking competitive rates. The APR ranges from 9.99% to 35.99%.
Upgrade loans also include many fees. The origination fee ranges from 1.85% to 9.99%, which is much more than other lenders charge. Upgrade also charges a $10 fee for late payments.
However, the company allows you to choose your due date to fit your monthly cash-flow patterns, so you can avoid penalties. It also offers long-term loans: You can choose a three-year or five-year repayment period.
Bottom Line
Despite the high APR and fees, we consider Upgrade one of the lending industry’s best companies. The company allows you to choose your payment date and it encourages you to check your interest rate, maximum loan amount, and other details before you apply for a loan.
It also offers some other benefits, like the co-signer option, which could help you qualify for better terms. You can get a discount by allowing Upgrade to send funds directly to your creditors. However, the top APR of 35.99% means this lender is not suitable for borrowers with low credit scores.
Reasons to Apply:
- Smooth application procedure
- Schedule payment dates to fit your needs
- Check rates with a “soft” credit inquiry
- Lower APR for borrowers with good credit
Marcus by Goldman Sachs®
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Launched in 2016, Marcus is an online platform owned by US investment bank Goldman Sachs®. Marcus offers three financial products - certificates of deposit, online savings accounts, and personal loans.
Types of Financing
Marcus is best known for its high-yield personal savings accounts, but this online bank also offers unsecured personal loans for debt consolidation. Client reviews attest that Marcus is a good choice for borrowers who have an excellent of at least 720.
If you decide to use a personal loan to consolidate credit card debt with this lender, be sure to check your credit score first. Marcus loans are for borrowers who have accrued a good credit history, so if your credit score is blemished, you’ll probably have difficulties qualifying for a loan.
One benefit of working with Marcus is that the lender pays your creditors directly. You won’t have to worry about making multiple payments every month: just the one payment to Marcus.
Another benefit: You can check your rates and manage your loan with the lender’s mobile app. And you can set up auto-pay if you’d like.
Marcus offers only unsecured personal loans. The lender doesn’t provide co-signed or secured loans.
Application Process
If you want to apply, you can fill out forms on the website or telephone the company, where a sales consultant will take your information and step you through the process. Marcus makes loans in all 50 states, Puerto Rico, and Washington, DC.
Applicants must meet lender requirements that vary from state to state.
Before you apply for a loan, Marcus will check your credit with a “soft” inquiry that won’t jeopardize your credit score.
Like other companies we reviewed, Marcus will ask for personal information. After verification, the lender sends a loan offer.
Marcus says it sends the money to your account within couple of days after your loan is approved; you could receive funds in as little as 3 days.
Loan Features
Marcus rates are fixed, which means the APR you sign up for won’t change during the life of the loan. Compared to other lenders on our list, Marcus has an excellent APR. If you have a good credit history, you can qualify for a loan with an interest rate as low as 6.99%.
The highest APR is 24.99%, which is still less than you’ll pay for loans from some other lenders.
Marcus offers its best rates to borrowers who use the auto-pay option. This is a good strategy for reducing your APR by 0.25%.
You won’t be surprised by additional fees. There are no origination fees or prepayment fees. If you make 12 consecutive monthly payments on time, you’ll get a reward: You can defer a month. Your loan’s term will be extended by one month, but you won’t pay any extra.
Marcus makes loans of $3,500 to $40,000, but the amount you qualify to borrow depends on your credit score, payment history, and other factors.
Bottom Line
Marcus is a terrific partner for those who have good or excellent FICO scores. However, borrowers with fair credit can also qualify and get affordable rates.
Reasons to Apply:
- Excellent mobile app
- Competitive rates
- Flexible loan terms
- Smooth application process
Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. Rates range from 6.99% to 24.99% APR, and loan terms range from 36 to 72 months. For NY residents, rates range from 6.99%-24.74%. Only the most creditworthy applicants qualify for the lowest rates and longest loan terms. Rates will generally be higher for longer-term loans. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. Receive a 0.25% APR reduction when you enroll in AutoPay. This reduction will not be applied if AutoPay is not in effect. When enrolled, a larger portion of your monthly payment will be applied to your principal loan amount and less interest will accrue on your loan, which may result in a smaller final payment. See loan agreement for details.
Avant
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
This reputable Chicago-based operator has provided more than $6.5 billion in funding to more than 800,000 borrowers since it was founded in 2012. Avant is focused on providing financial products for middle-income clients, allowing them to apply for various types of loans despite imperfect credit scores.
The BBB awards this lender an A rating, while Trustpilot gives it 4.5 stars of 5. Borrowers praise the lender’s financial products, helpful customer service staff, and excellent mobile app.
Types of Financing
Avant is well known for its secured and unsecured loans, including consolidation loans and loans for relocation, car repairs, home renovation, and other purposes. For credit card consolidation, Avant allows you to borrow a lump sum to cover the debts on all your credit cards, leaving you with a single monthly payment to make.
You can also sign up for an auto-pay option so you’ll make your payments on time. We think this is a great option. Regular payments are little miracles when it comes to improving your credit score.
Application Process
Avant allows you to apply for a loan through its website. Just type your personal details, the desired loan amount, and the loan purpose into a form at the website. The lender will then check your credit score. Don’t worry; at this stage, Avant makes only a soft inquiry that won’t affect your credit score.
After you complete the pre-application procedure, Avant sends you loan offers. You are not obliged to accept any of them. The company will not charge you anything for this service.
If you decide to take out a loan, you need to create an Avant account and verify your personal information first. Avant works like other lenders - before approving your loan, it reviews your personal details, Social Security number, address, and so on. The lender also inquires about your salary and other types of income such as child support and alimony.
Once your loan is approved, the funds will be in your account within one business day. You can use the Avant mobile app to check your account’s status, track payments, and manage your account.
Loan Features
Avant loans come with a high APR - as high as 35.99% if you have a low credit score. Even if you have a perfect credit score, the minimum APR is 9.95%, which we consider too high for this sort of loan.
The company also charges a high original fee: 4.75% of your loan amount. Each late payment will cost you $25.
Avant credit card consolidation loans start at $2,000. The maximum is low compared to what you can get from other lenders: $35,000.
Bottom Line
With long repayment terms, late fees, and high interest rates, Avant is not the best option for everyone. Borrowers with a low credit score could find it the best option, regardless of how high the monthly payments are. But if you can meet the qualifications from one of the other vendors on our list, you will probably save money.
Reasons to Apply:
- Mobile app for tracking your loan
- Simple online application
- Fast funding
- Flexible repayment
Happy Money
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Founded in 2009, Happy Money is a California-based lender marketplace that helps match qualified borrowers with lenders that specialize in personal loans for debt consolidation.
The company says its services have helped thousands of borrowers get out of debt and improve their credit score by an average of 40 points. Happy Money is accredited by BBB, which gives it an A+ rating.
Types of Financing
The first thing you should know is that Happy Money isn’t a direct lender. It collaborates with Green State Credit Union, Teachers Federal Credit Union, First Tech Federal Credit Union, US Alliance Financial, Alliant, Blue Federal Credit Union, MSUFCU, and Veridian Credit Union. It is these companies that fund your loan.
However, the money will be transferred from Happy Money to your account, so the loan you get is a loan from Happy Money.
Unlike other lenders, Happy Money offers loans only for credit card debt consolidation. These loans are unsecured, meaning that you don’t need to provide collateral to qualify.
Application Process
Getting a loan at Happy Money starts with an online form on the company’s website. It requires personal information like your name, address, and Social Security number. The company will also check your credit score, but don’t worry. At this stage of the application, Happy Money makes only a “soft” inquiry that will not affect your credit score.
Happy Money is well known for its low credit score requirements. You can secure a loan with a minimum credit score of 640.
In addition to checking your credit score, the company will also ask you about your monthly income. To qualify, Happy Money requires a debt-to-income ratio of 50% or less. It means that the total of your monthly debt payments must be less than half of your monthly gross income.
Happy Money loans are available for US citizens except for residents of Massachusetts and Nebraska.
Loan Features
Happy Money is an excellent solution for borrowers who need a significant amount of money to cover their debts. The loans range from $5,000 to $40,000. If your credit score is good enough, you can qualify for the company’s most competitive rates.
The APR can be as low as 7.99%, which is a better deal than you’ll find at most of Happy Money’s competitors. The maximum APR is 29.99%.
To cover administrative costs, many lenders charge an origination fee, which is typically rolled into the loan. For example, if you need to borrow $10,000 to pay off your credit debt, the lender might make you a loan of $10,200 and deduct a 2% origination fee.
Origination fees range from 0% to 5% depending on your credit score, loan amount, and other factors. At Happy Money, the minimum repayment term is two years and the maximum is five years.
Happy Money doesn’t charge application fees, monthly administration fees, or even late payment fees. You should still make your payments on time, however. Late payments are reported to credit bureaus and they can reduce your credit score.
Bottom Line
The company has a competitive APR, and although it does charge an origination fee, there are no other fees to worry about. Customers praise the lender’s prequalification process, during which you can check your rates without affecting your credit score.
Reasons to Apply:
- No application fee
- Increase your credit score by up to 40 points
- No late payment fees
- Long repayment terms
Why a Credit Card Debt Consolidation Loan Makes Sense
If you have high credit card balances that you carry from month to month, you should consider credit card debt consolidation. There are many ways to consolidate your debt. A personal loan is one of the most popular and cost-effective.
Most online lenders make these kinds of loans, either as separately advertised financial products or as normal personal loans. The process for applying for a loan to pay off credit cards is the same as applying for any other financial product. A lender reviews your personal details, credit score, and credit history, then creates an offer.
To make the most of this option, you need to have a good credit score. That might be challenging, especially if your credit score has been compromised by the same factors that have left you swimming in high-interest debt. But even with a bad credit score, you can qualify for a loan that pays off your debt immediately and reduces your monthly payments.
Although it might be difficult to find a lender, we still think that this is the best way to consolidate debt, and here is why:
- Fast and easy: Debt consolidation loans help you consolidate credit card debt quickly. The high-interest credit card payments are gone and you can focus on a fresh start with a single low monthly payment. When you’re swamped with credit card debt, a consolidation loan is like a fresh start.
- Save money: A credit consolidation loan saves you money too. Instead of paying sky-high interest rates to credit card companies, you pay a much more reasonable sum to a single lender who charges a reasonable rate and spreads out payments over time. The better your credit, the lower the interest rate and the more money you’ll save.
- Improve your credit: If you’ve had credit struggles, you can still qualify for solid offers. Once you get a loan and start making payments on time, your credit score will start to rise as well.
FAQ
Do consolidation loans hurt your credit score?
No. On the contrary, a debt consolidation loan can help you improve your credit score by paying off your credit card debt and replacing it with a single low monthly payment. Make those payments regularly and your score will gradually rise.
Are credit card consolidation loans a good idea?
Consolidations give you a fresh start and help you preserve your credit rating. The danger is that once you’ve consolidated your debt and paid it off with a loan, your pockets are bulging with credit cards that have $0 balances. Temptation can induce you to get yourself in over your head again. You must make and keep a promise to yourself about using your credit cards strategically and paying off the balance every month.
How long does debt consolidation stay on your credit report?
Financial information such as taking out a loan stays on your credit history for seven years.