A personal loan for refinancing credit card debt can help you save on interest and speed up your payoff process, and here’s how to find the best loan for your circumstances.
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Lender |
Learn More |
APR |
Max. Loan Amount |
Min. Credit Score |
|---|---|---|---|---|
 |
9.99% to 29.99% | $40,000 | Not disclosed | |
 |
8.24% to 35.97% | $50,000 | Not disclosed | |
 |
8.99% to 23.43% | $100,000 | Not disclosed | |
 |
6.50% to 35.99% | $50,000 | Not disclosed | |
 |
5.99% to 23.99% | $100,000 | 670 | |
 |
7.74% to 17.99% | $50,000 | 650 | |
 |
8.05% to 36.00% | $40,000 | Not disclosed | |
 |
7.99% to 29.99% | $50,000 | Not disclosed | |
 |
8.99% to 35.99% | $50,000 | 640 | |
 |
9.95% to 35.95% | $35,000 | 640 |
Happy Money offers Payoff personal loans designed to consolidate credit card debt. It operates in all but two states and provides loans of up to $40,000. Happy Money is not a bank and instead works with lending partners that originate the loans. The California-based financial wellness company takes a psychological approach to money matters.
Upgrade offers access to personal loans, the Upgrade card with a personal line of credit, rewards checking and credit monitoring and educational tools. Founded in 2017 in San Francisco, the firm also has operations offices in Chicago, Phoenix and Montreal.
SoFi, short for Social Finance, offers personal loans of up to $100,000 with terms between two and seven years. The lender was founded in 2011 and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, auto and student loan refinancing and home loans.
Upstart is a lending platform that uses artificial intelligence to improve access to affordable credit. Based in California and founded by former Google employees in 2012, Upstart also applies AI to reduce lending risks and costs for its bank partners. The lending intermediary provides unsecured personal loans from $1,000 to $50,000 to borrowers anywhere in the U.S. except West Virginia or Iowa.
LightStream is the online consumer lending division of Truist Bank. Low-interest fixed-rate loans from $5,000 to $100,000 are available for almost any purpose and backed by a $100 satisfaction guarantee. Borrowers have good to excellent credit and may receive funds as soon as the same day they apply from the website or mobile app.
Although PenFed Credit Union – officially Pentagon Federal Credit Union – serves members of the armed forces, military associations, veterans and retirees, and their families, a military connection is not required to become a member. The credit union offers personal loans for eligible members and eligible co-borrowers in all 50 states, as well as in Guam, Puerto Rico and Okinawa, Japan.
LendingClub connects borrowers and investors through its online marketplace. The company originated on Facebook and evolved into an extensive peer-to-peer lender, though it no longer offers peer-to-peer loans. Borrowers in all U.S. states and Washington, D.C., can apply for $1,000 to $40,000 loans with LendingClub.
Achieve, formerly FreedomPlus, is a digital personal finance company affiliated with Freedom Financial Network. Borrowers can get same-day decisions and quick disbursal for fixed-rate personal loans from $5,000 to $50,000. All personal loans are originated by New Jersey-based Cross River Bank.
Best Egg is an online lender founded in 2014 and owned and operated by financial technology company Marlette Holdings. Borrowers can access personal loans starting at $2,000 to cover medical bills, home remodeling projects and many other expenses. Loans are issued by New Jersey’s Cross River Bank and can be funded in as little as one business day.
Chicago-based Avant has lent $8 billion to borrowers since its 2012 founding. In partnership with WebBank, Avant offers secured and unsecured personal loans and a credit card. Most customers that receive loans have credit scores between 600 and 700, according to Avant.
Personal loan interest rates rose this week, trending higher for three-year and five-year loan terms. Here are the average personal loan rates offered to well-qualified applicants with a credit score of 720 or greater, as of Mar. 7:
- Three-year personal loan term: 17.3% (down from 18.34% a week ago).
- Five-year personal loan term: 18.94% (down from 19.7% a week ago).
Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit, as seen in the chart below:
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Credit card debt consolidation rolls multiple credit card balances into one loan.
With a personal loan for debt consolidation, you borrow a lump sum of money – ideally at a low interest rate. You then use that money to pay off some or all of your high-interest credit card balances.
Taking out a personal loan is one of the best ways to consolidate debt for consumers who have substantial credit card debt, says Mark Victoria, senior vice president and partnership program executive at TD Bank. Going forward, you have a single monthly payment to make toward the debt consolidation loan.
Credit card consolidation can offer several financial benefits:
- You could save money on interest. If your consolidation loan has a lower interest rate than the annual percentage rate for the credit cards you pay off, you’ll pay less interest over time.
- There are fewer payments to juggle. Going from multiple credit card payments each month to a single monthly payment can help streamline your financial life.
- You may get out of debt faster. If you have a lower interest rate with a credit card debt consolidation loan, more of your monthly payment goes toward the principal.
There’s also a sense of relief. Debt consolidation gives you a concrete finish line when you know your debt will be paid off, says James Lambridis, founder and CEO of financial information site DebtMD. “An unsecured debt consolidation loan typically lasts from two to five years, so you can give yourself peace of mind that at the end of the term, you will be debt-free once and for all.”
Credit card consolidation has its drawbacks, as well:
- You might pay more interest. Not all loans are guaranteed to provide a lower interest rate than your credit cards, so do the math and make sure the consolidation will be monetarily worth it.
- You might grow your debt. When you pay off a card’s balance, you free up that card to use again – and thus add to your debt. Be sure to stop using the credit card while you pay off the consolidated loan.
Find the Personal Loan That’s Right for You
Consolidating credit card debts using a personal loan can affect your credit score both positively and negatively. However, successfully paying off credit card debt using a personal loan should have a more positive than negative effect on your credit.
Applying for a loan to consolidate credit card debt can trigger a hard inquiry against your credit report, which can take a few points off your credit score. Most lenders allow you to check your rate and loan amount with a soft credit inquiry, which doesn’t affect your credit. Rate checks allow you to shop around for the best debt consolidation loan before you submit a formal application, which does trigger a hard inquiry.
Once you have a new loan open, that can affect the overall age of your credit. As a general rule, the older your account history, the better. Newer accounts could trim a few points off your score.
But inquiries and credit age are smaller factors than payment history and credit utilization, which a credit card refinancing personal loan can help with. Paying your new loan on time can improve your payment history, which accounts for 35% of your FICO score. If you’re paying off credit cards, that can improve your credit utilization ratio, which counts for 30% of your FICO score.
The two biggest mistakes to avoid with credit card debt consolidation loans are late payments and running up new balances on the cards you just paid off. Doing so can hurt your credit history and push you farther into debt.
Victoria says some people go in with the best intentions of consolidating into one loan at a lower rate. However, even though the debt has shifted, consumers should keep in mind that they still likely have access to the credit cards that got them there in the first place.
“Consolidating is the first step,” he says. “Changing spending habits should be the next priority.”
If you’re interested in the best debt consolidation loan to pay off credit cards, it helps to know how to compare consolidation loan companies. As you’re shopping around for a personal loan to eliminate credit card debt, consider these factors:
- Minimum loan amount.
- Maximum loan amount.
- Minimum and maximum loan repayment terms.
- Interest rate and APR.
- Loan fees, including origination fees, late payment fees and prepayment penalties.
- Funding and payment options.
- Minimum credit score and income requirements.
- Customer service reviews.
When looking for the best credit card debt consolidation options, it’s important to figure out what works best for your budget. That also means taking into account what your new monthly payment would be for a loan. Understand how long it will take you to pay it off and what you’ll pay in interest.
“You should only consolidate your debt if you’re able to lock yourself in at a lower interest rate and/or lower your monthly payment,” Lambridis says. He cautions that a lower credit score could translate to a higher interest rate on a credit card consolidation loan, potentially overriding any savings benefit.
Find out how fast you’ll receive funds: Some loan companies offer funding as soon as the next business day. If the lender offers direct payment, it can send funds directly to your creditors to pay off accounts.
Flexible payment options can help, too. Some lenders may allow you to set your payment due date, which can help you balance monthly payments in a way that works best for you.
- Consider the debt avalanche method. Pay off your credit card balances beginning with the highest APR, and therefore save the most money because you’re getting rid of high-APR debt first.
- Try the debt snowball method. Pay off your balances from the smallest debt to the largest debt. You’ll pay more interest, but this method will continually give you the psychological boost to keep going.
- Use a balance transfer credit card. If your credit is good enough, you may be able to open a credit card with a high credit limit and an introductory 0% APR, which may last 12 to 18 months. This would give you a chance to pay down your credit card debt without accruing more interest.
- Seek credit counseling. If you feel like you’re drowning in debt and have no hope of getting rid of it, speak with a credit counselor from an agency accredited by the National Foundation for Credit Counseling. Counseling will help you clarify what you need to do next.
U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.
To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.
To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.
To recap, here are the picks:
Best Personal Loans for Credit Card Refinance of March 2023
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who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.
