10 Best Companies to Consolidate Credit Card Debt

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Refinancing credit card debt is one of the best steps you can take to get out of debt. Chances are, your credit cards have a high interest rate.

In addition to getting a lower interest rate, more of your monthly payment goes to the principal so you can get out of debt sooner.

Here are some of the best debt consolidation companies to qualify for excellent rates and terms.

The Top Companies for Refinancing Credit Card Debt

Each platform provides free rate quotes for your loan options. Consider comparing rates from several lenders to make sure you get the best repayment option.

We rank each lender with the highest Trustpilot score first. However, each lender has different lending options and may not be available in your state.

1. LendingPoint

If you have “Near Prime Credit” with a 600s credit score, online lending platforms can be a more affordable option than a regular bank. LendingPoint offers credit card refinancing loans between $2,000 and $36,500.

You may also be able to get a lower interest rate as the shortest repayment period is 24 months. The shortest repayment term is 36 months for most lenders.

If you need more time, the longest repayment period is 60 months.

Since LendingPoint is a direct lender, they offer next-day loan disbursement after approving your loan. As a result, you can receive your loan funds sooner than a peer lending platform.

LendingPoint Trustpilot score: 4.9 out of 5

Tip: Boost your credit score by lending money to yourself with Self Lender.

2. Upstart

Founded by ex-Google employees, Upstart is a pioneer in the lending industry. Young professionals with minimal credit history should consider Upstart. 

Instead of only using your credit report, Upstart considers these factors too:

  • Work history
  • Field of study
  • Future potential salary

Being in a lucrative career field means that you might get a lower rate than what other lenders offer. This detailed underwriting process makes this lender unique.

Besides credit card debt, you can also refinance student loans. Or consolidate other personal debts.

Your loan balance can be between $1,000 – $50,000. Three-year and five-year loan terms are your two repayment terms.

It takes two minutes to see if you qualify. If approved, Upstart will send you funds as fast as the next business day.

Upstart Trustpilot score: 4.9 out of 5

3. FreedomPlus

If your balance is at least $7,500, FreedomPlus offers competitive rates. Well-qualified borrowers can qualify for loan balances up to $50,000.

The repayment period is from 24-60 months.

FreedomPlus approves most loans within three hours. In most cases, you can receive your funds within 72 hours.

For extra flexibility, FreedomPlus let you choose your payment due date.

You might also qualify with a credit score as low as 620. This minimum credit score is more lenient than many lenders.

FreedomPlus Trustpilot score: 4.9 out of 5

4. LendingClub

LendingClub lets you consolidate up to $40,000 with a three-year or five-year repayment period. However, you may need a credit score in the 700s to qualify for the highest lending amounts.

You can apply as an individual borrower or with a co-borrower. It’s possible to qualify with a minimum 600 credit score.

There is a loan origination fee between 3% and 6% of the loan amount. This fee is common for most lenders but it’s the only fee this platform charges.

You can receive your funds within 48 hours of accepting the loan terms.

LendingClub Trustpilot score: 4.8 out of 5

5. OneMain Financial

You might prefer using a local bank to refinance credit card debt. OneMain Financial lets you complete the entire refinance process online.

If you desire, you can get an online quote but meet a local branch agent to finish the application process.

The loan amounts are between $1,500 and $20,000 with several repayment options.

One advantage of using OneMain Financial is that you can receive your funds the same day when your application is approved by noon Eastern. Some deposits may take up to two business days.

OneMain Financial Trustpilot score: 4.8 out of 5

6. Credible

Credible is one of the easiest ways to consolidate your credit card debt quickly. They are a loan comparison site that provides at least three lender quotes from highly-rated platforms.

You won’t pay any extra fees by using this service and your interest rate is the same as if you apply directly through the lender website.

You can request to borrow up to $100,000 through Credible’s lending network. Loans are available as small as $600.

Remember, the sooner you refinance, the more money you save. Rate shopping takes time, but Credible speeds up the comparison process.

For example, Credible lets you refinance your credit card debt with interest rates as low as

2.49% to 35.99%

with autopay. If you currently pay 15% or 20% interest with your credit card, imagine the savings.

Credible Trustpilot score: 4.7 out of 5

Read our Credible review to learn more about this loan comparison website.

7. Best Egg

With Best Egg, you can refinance $2,000 to $50,000 of credit card debt. Repayment terms are between 36 months and 60 months.

An origination fee between 0.99% and 5.99% applies to all loans.

It’s possible to have two different loans from this lender at one time. However, you total loan balance cannot exceed $50,000.

Best Egg Trustpilot score: 4.7 out of 5

8. PersonalLoans.com

Another loan comparison site is PersonalLoans.com. You can get quotes from multiple lenders for loan balances between $1,000 and $35,000.

Depending on how much you refinance, you have between 3 months and 72 months (6 years) to repay the loan in full.

The PersonalLoans lender network consists of peer lenders and traditional banks. It’s possible to get approved for financing with a 600 credit score. Also, you need to earn at least $2,000 in monthly income to be considered by lenders.

PersonalLoans.com Trustpilot score: 4.6 out of 5

9. Upgrade

Upgrade offers debt consolidation personal loans of up to $50,000 with a repayment term between 24 months and 84 months.

The minimum borrowing amount is $1,000. While the interest rates are competitive, the origination fee can be relatively high between 2.9% and 8%.

One advantage of using Upgrade is that the lender may send your loan funds directly your credit card provider. You can also receive your funds within one business day.

Upgrade Trustpilot score: 4.6 out of 5

10. Tally

Tally is a mobile app available for iOS and Android devices. The app analyzes your credit card balances to recommend a repayment plan that can minimize your interest charges.

Instead of getting a traditional personal loan, you may qualify for a line of credit. If so, you monthly fee is $25 plus the line of credit APR.

This fee structure can be lower than what personal loan companies charge for the life of a loan.

In this situation, Tally makes a payment plan for you. Then they send payments to your credit card companies.

But when refinancing is cheaper, you can apply for a regular loan from one of the other lenders on this list.

You may still decide to use the basic Tally service that tracks your credit card payments and makes a personalized repayment plan. The monthly fee is $4.99.

Tally Trustpilot score: 4.4 out of 5

Read our Tally review to learn more about paying off your credit cards fast.

What Legit Consolidation Companies Look Like

There are dozens of companies that can refinance or consolidate your debt. Maybe they even call you or send a postcard in the mail.

They might be legit companies, but be careful. Not every company is working in your best interest if they have hidden fees.

The best debt consolidation loan companies do not charge these fees:

  • Application fee
  • Early payoff penalties
  • No temporary or “teaser” interest rates

However, many lenders charge an origination fee. If they charge this fee, it can be up to 6% of the opening balance and withheld from your loan disbursement.

Always read the “fine print” for any lender before you accept their offer. Look for any potential fees and penalties.

Fixed Interest Rates vs. Variable Interest Rates

In most cases, you should apply for a fixed interest rate loan first. You pay the same interest rate for the entire loan term. Even if interest rates rise, your rate stays the same.

With variable rate loans, your payments increase if rates rise. Make it easier, secure a fixed rate today. You will know exactly how much to pay each month until you pay the loan in full.

Only get a variable rate loan when you can pay off the balance in one year. For most people, it’s better to hedge your bets and choose a fixed rate loan.

You’ll still save money compared to your original interest rate. And you’ll have the extra peace of mind that comes with a fixed interest rate.

Some lenders only offer fixed interest rates. This makes the loan process easy since you only have one option. In this case, you just have to decide on how long the loan term needs to be.

Avoid These Types of Companies

You want to avoid debt relief and debt management companies. There are legit companies in this sector, but they can be expensive.

To save money, consolidate your debt yourself. Yes, doing it yourself takes effort. But give it a try first with the companies we recommend.

Debt management companies charge a monthly fee between $50 and $100. These companies will negotiate lower rates for your credit cards and other loan debt. And they will help you apply for a debt consolidation loan.

So they do help you. But in truth, you can do both of these tasks yourself.

For the convenience, these companies are better than nothing. If it’s the only way to consolidate your debt, do it. Having someone else make a plan for you to get debt-free is better than staying in debt.

You might also consider these companies if you have sub-prime credit. That is a credit score below 580. Most banks won’t lend you money with a credit score below 580.

Debt management companies can lend you money to refinance credit card debt at a lower interest rate.

If you go this route, verify the company is legit. Ask the National Foundation of Credit Counselors. For many, this is the leading agency for credit counselors.

What to Do When You Consolidate Your Debt

This is not a “get out of jail free card” to borrow more money. You must still repay your current balance. The only difference is that you’ll pay less in interest.

These three tactics below will help you stay on track.

Follow the Debt Snowball Method

To repay your debt faster, you should pursue Dave Ramsey’s Baby Steps. His debt snowball strategy focuses on paying the smallest debt balance first. If you have two identical balances, choose the highest interest rate first.

Try our debt snowball calculator to get started.

Sell Your Unused Items for Extra Payments

The lenders we recommend won’t charge you an early payment penalty. So challenge yourself to pay off your debts sooner by making extra payments.

An easy way to do this is to sell your unused items. Use the proceeds to make extra monthly payments.

The sooner you make an extra payment, the less interest you pay overall. Even if it’s only an extra $20 a month, it’s still progress.

To help us get out of debt, I sold my $20,000 car. Then I replaced it with a $4,000 vehicle. The extra cash was used to pay off debt. You can also find some extra cash by selling some of these items:

Make Extra Money with a Side Hustle

When selling your used items isn’t enough, you can start a side hustle. You can earn extra cash with your knowledge and muscle!

The beauty of side hustles is that they are a source of recurring income. You work as much or little as you want with side hustles. So flexible gigs let you can balance work and family too!

Other Ways to Pay off Your Credit Card Debt

In some cases, it doesn’t make sense to consolidate your credit card debt. These are three cases when you shouldn’t consolidate or refinance:

  • The interest rate is not lower
  • Loan fees negate any interest rate savings
  • You don’t have enough debt to consolidate

But this doesn’t mean you must continue making the minimum monthly payment. Below are a few ways you can save money without refinancing.

Negotiate a Lower Interest Rate With Your Current Lender

If you have a history of on-time payments, you might be able to get a lower interest rate. Credit card companies don’t want to lose your business to another lender.

Call the credit card company and ask for a lower rate. For instance, you pay 15% instead of 20% APR.

In some cases, they might reduce your rate for several months. This can be enough time to repay your balance in full.

And it’s less hassle than applying for a loan and having to transfer funds.

Sign Up for a 0% APR Credit Card

This is also called a “balance transfer credit card offer.” You will pay a balance transfer fee of up to 3%. But your balance doesn’t accrue interest for several months.

A credit card with a 0% APR can save you big money too! You won’t pay interest during the promotion period. So you can transfer your current balances to the new card and enjoy interest-free payments.

Just make sure you can pay off the balance before the 0% interest ends. For most cards, you have between 12 and 18 months.

After the promo period ends, you pay the regular interest rate again. So only choose this option if you are responsible with credit cards.

We still prefer refinancing credit card debt with a debt consolidation loan when you need several years to repay your balance.

But this can be a cheaper option if you have a small balance.

Pull From Your Savings

Avoid the 3% balance transfer fee and opening yet another credit card. You can borrow money from yourself. And no credit check is necessary either.

If you have money in your savings account, make extra payments.

Then repay yourself in the coming months with interest-free payments. This is the tactic my wife and I took to make the final payments on our loans. The money we saved by getting out of debt sooner exceeded the interest we would have earned.

But when using your savings, don’t tap your emergency fund to pay off your credit card debt.

How Does Refinancing Credit Card Debt Affect Your Credit Score?

Another question you might have is how refinancing credit card debt affects your credit score. We have all heard about why it is best to have good credit versus bad credit.

When you apply for a loan, the lender pulls your credit report and credit score with a hard pull. As a result, your credit score will drop a few points. But it will soon improve for these reasons:

  • Your credit card balances go to $0
  • You make fixed monthly loan payments that the lender reports to the credit bureau
  • Your debt-to-credit ratio drops as you repay the loan balance

So after the initial credit score ding from opening a new credit account, your score will improve.

FAQ’s

Refinancing credit card debt isn’t hard. But the process might be confusing at first because you have several options. This section helps you figure out the best way to refinance credit card debt.

How Do You Refinance Credit Cards?

Compare different loan offers from multiple companies and then apply for the best one. When you submit your application, the lender conducts a hard credit pull to see your entire credit report. This is necessary to either approve or decline your loan request.

After the lender approves your loan request, they deposit the money into your bank account. So it’s up to you to send the money to your credit card company.

How Much Can You Save Refinancing Credit Card Debt?

Is it worth the hassle to refinance your debt? The answer depends on how much money you can save.

Here are two quick scenarios to show how much money you can save. Let’s assume you have $15,000 in credit card debt. And it has a 15% interest rate.

Option 1: Make the minimum monthly payment
To be clear, with this option you don’t consolidate your debt. Also, this example assumes you don’t add to the balance amount. And remember to make all payments on time. Late payments mean late fees.

Your estimated minimum monthly payment will be $337 for the next 376 months. That’s 31 years of payments! And you pay $18,229 in total interest. Remember, your original $15,000 balance becomes $36,458. In other words, twice your original balance amount.

Option 2: Consolidate Your Debt for 5.99% Interest
This option is a two-year loan and 5.99% interest. You make higher payments each month, but only pay about $1,000 in interest. That’s a savings of $17,000 when you consolidate debt! Even if you need to get a five-year loan, you can still save money.
To see these savings, you need a two-year loan with a $655 monthly payment. It might seem hard at first, but pinching pennies for two years is worth the reward.

When Should You Consolidate Credit Card Debt?

In most cases, you save money when you refinance debt. But there are exceptions to every rule. Only refinance when you will pay less in interest and fees than keeping the balance on your credit card.

Summary

In brief, the sooner you choose to consolidate your credit card debt, the more cash you save.

Lowering your interest rate will save you a lot of money and can reduce your monthly payment. When possible, make extra payments to become debt-free sooner and improve your credit.

Disclaimers

For example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.9. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% to 35.99%, with the lowest rates for the most creditworthy borrowers.

Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All personal loans made by WebBank, Member FDIC.

Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade’s lending partners. Information on Upgrade’s lending partners can be found at https://www.upgrade.com/lending-partners/.

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. All loans made by WebBank, member FDIC.

All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $14,000.00, and with a term equal to 24 months.  Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you qualify.

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 6.95% 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%; the average origination fee is  5.2% (as of 12/5/18 YTD).*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.

Fixed rates from 5.99% APR to 21.16% (with AutoPay). SoFi rate ranges are current as of January 30, 2020 and are subject to change without notice. See APR examples and terms. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have excellent credit and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including credit score, credit usage and history, years of experience, our ability to verify your income and employment and other factors. The SoFi 0.25% AutoPay interest rate reduction applies if you make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. AutoPay is not required to obtain a loan.

If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.

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Comments

  1. Josh,
    This is an excellent article. You have covered the subject well and I appreciate the time and energy it took to gather the information, organize it and put it in a format that lends to a common sense approach to getting out of debt. I found it very informative and helpful in some of the decisions we are now making since we are retiring.
    Thanks for the article.

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