According to data compiled by the Federal Reserve, a clear majority of American credit card users — 57% — use credit cards for convenience and for rewards like cash-back and travel points, and don’t carry balances from month to month.
That’s the good news. The bad news: the other 43% of American credit card users do carry balances from month to month. In 2019, the average credit card user had an average balance in the neighborhood of $6,200, according to Experian.
Carrying credit card balances is costly. Annualized credit card interest rates typically range from around 10% to more than 25%, depending on prevailing benchmark rates, cardholder creditworthiness, and other factors. Compared with lower-interest options like home equity loans and lines of credit, rates like that raise financing costs by hundreds or thousands of dollars each year. Those costs complicate cardholders’ efforts to break the cycle of carried debt and move toward debt freedom.
For many cardholders carrying hefty balances from month to month, the solution is more debt — temporarily. Consolidating credit card debt is a popular use case for unsecured personal loans, which are more plentiful than ever thanks to rapid growth in low-overhead branchless lenders. If credit card debt has you at your wit’s end, you owe it to yourself to contemplate a debt consolidation solution.
Best Companies to Consolidate Credit Card Debt
Many of the best companies for credit card debt consolidation loans also appear on our list of the best personal loan companies in general, so you can rest assured that you’ll be in good hands with any of these providers. Still, after reading over this list, do take the time to use one of these personal loan quote aggregators to quickly sift through multiple quotes from reputable providers and find the best loan configuration for your needs:
Bear in mind, also, that personal loan proceeds come with few usage restrictions — one of several significant personal loan benefits. If your impetus for applying for a personal loan is to consolidate credit card debt, you should certainly prioritize that purpose. But if you’re approved for a bigger principal and can afford somewhat higher monthly payments, you’re free to use the proceeds for other purposes too — perhaps a long-delayed home improvement project or settling up hefty medical bills.
Here are some of the top providers to consider for credit card debt consolidation loans.
1. Upstart
Upstart works with multiple bank lenders to deliver optimal rate and term combinations based on borrowers’ funding request, credit scores, geographical location, and employment status. Unlike many debt consolidation loan providers, Upstart caters to borrowers across the credit spectrum, including those without enough credit data to calculate their FICO score. The biggest drawback: high origination fees, especially for borrowers with fair or limited credit.
- Borrowing Range: $1,000 to $50,000
- Term Options: 36 months or 60 months
- Origination Fees: Up to 8%
- Prepayment Penalty: None
- Credit Requirements: Fair to excellent, although Upstart does accept borrowers with credit histories too limited to produce FICO scores. Generally, the minimum FICO score to apply is 620, but California borrowers can qualify with scores as low as 580. Upstart also considers noncredit factors such as employment status and history, educational attainment, and career specialty or degree.
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2. Payoff
Payoff specializes in credit card debt consolidation loans for borrowers with solid but unspectacular credit. Because it’s a relatively small company that does only one thing, credit card debt consolidation borrowers can trust that Payoff will be responsive to their needs. Payoff’s loans are also mostly free of fees, with the exception of an origination fee that’s charged to all but the best-qualified borrowers.
- Borrowing Range: $5,000 to $40,000
- Term Options: 24 to 60 months
- Origination Fees: 0% to 5%
- Prepayment Penalty: None
- Credit Requirements: Fair to excellent. Payoff’s minimum FICO score is 640 and borrowers must not have any current delinquencies when they apply. Otherwise, Payoff is vague about its credit and noncredit qualification requirements, noting only that specific qualification factors include debt-to-income ratio, age of credit history, credit utilization, and open and satisfactory (nondelinquent) trades.
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3. Marcus by Goldman Sachs
Backed by a household-name financial institution, Marcus by Goldman Sachs stands out thanks to competitive rates and terms, a total lack of origination fees, and a one-month payment-and-interest holiday after 12 consecutive months of timely payments. Also, unlike some debt consolidation lenders, Marcus uses your loan proceeds to pay off your credit card accounts directly (with your permission) — saving you the step of paying them yourself.
Marcus’s biggest drawback is a strict underwriting process that excludes subprime borrowers, even those with ample incomes. You may need to work on building or rebuilding your credit before applying.
- Borrowing Range: $3,500 to $40,000
- Term Options: 36 months to 72 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Good to excellent. Marcus does not market to subprime borrowers. The best rates and terms are reserved for applicants with high credit scores and incomes. Applicants with credit scores much below 700 are unlikely to qualify.
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4. SoFi
Once a niche player in the student loan refinancing business, SoFi is now a diversified fintech company offering personal loans, mortgage products, day-to-day money management support through SoFi Money, and wealth management services through SoFi Invest.
For debt consolidation clients, SoFi’s upsides are clear: relatively low rates and favorable loan terms, including long repayment timetables that keep monthly payments low. However, SoFi is quite choosy, so if your credit is limited or impaired in any significant way, you’re unlikely to secure approval for a debt consolidation loan here.
- Borrowing Range: $5,000 to $100,000
- Term Options: 24 to 84 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Excellent. SoFi has strict underwriting requirements, so borrowers with credit scores below 700 will struggle to qualify. Even borrowers with higher scores could struggle to gain approval, depending on the overall strength of their credit profiles and noncredit factors like income and employment.
For more information, check out our full SoFi review.
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5. LightStream
LightStream is a division of SunTrust Bank, a major brick-and-mortar bank that routinely appears on our list of the best bank account promotions. SunTrust’s support undoubtedly contributes to LightStream’s unusually wide range of loan principals and terms. LightStream’s interest rate range is on the lower side too, with well-qualified borrowers enjoying rates in line with the typical home equity line of credit. And the 0.25% autopay discount is nice. But LightStream isn’t appropriate for credit-impaired borrowers.
- Borrowing Range: $5,000 to $100,000
- Term Options: 24 months to 144 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Good to excellent. LightStream makes clear that borrowers with limited credit histories or impaired credit are unlikely to qualify for funding, but doesn’t get into specifics about credit score, income, or debt-to-income ratio cutoffs.
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6. Prosper
Prosper is a popular peer-to-peer (P2P) lender that uses contributions from its vast pool of individual investors to fund reasonably priced loans across the credit spectrum. Prosper does charge unavoidable origination fees that increase in inverse proportion to credit quality, and rates for less-qualified borrowers can soar well above 20% — higher than the typical credit card. Still, well-qualified borrowers enjoy excellent rates and terms, and Prosper is often one of the few reputable debt consolidation options available to applicants with impaired credit.
- Borrowing Range: $2,000 to $40,000
- Term Options: 36 months or 60 months
- Origination Fees: 2.41% to 5%
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. Prosper is transparent about the minimum requirements borrowers must meet: income greater than $0, at least three open credit records (credit trades), a debt-to-income ratio below 50%, fewer than five credit inquiries within the past six months, and no bankruptcy within the past 12 months. Although these requirements exclude borrowers with seriously limited credit, Prosper does not exclude borrowers with low FICO scores. However, Prosper does reserve the best rates and terms for borrowers with credit scores well above 700 and incomes above $100,000.
For more information, check out our full Prosper review.
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7. LendingClub
LendingClub is the leading P2P personal loan provider in the United States. Using funds contributed by individual and institutional investors, LendingClub provides debt consolidation loans to borrowers across the credit and income spectrum. Like Prosper, LendingClub reserves the best rates and terms for well-qualified borrowers, and borrowers with impaired credit face interest rates higher than the typical credit card.
- Borrowing Range: $1,000 to $40,000
- Term Options: 36 months or 60 months
- Origination Fees: 2% to 6%
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. LendingClub caters to borrowers of all stripes, including subprime borrowers who can struggle to qualify for loans elsewhere.
For more information, check out our full LendingClub review.
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8. Axos Bank
Axos Bank issues short- and medium-term debt consolidation loans to borrowers with very good (or better) credit. With low origination fees that can be waived entirely for well-qualified borrowers and terms as short as 12 months, Axos is a low-cost option for those able to meet its underwriting criteria. Just don’t expect to gain approval if you have any significant blemishes lurking on your credit report.
- Borrowing Range: $5,000 to $35,000
- Term Options: 12 to 60 months
- Origination Fees: 0% to 2%
- Prepayment Penalty: None
- Credit Requirements: Very good to excellent. Axos Bank says it caters to borrowers with FICO scores above 720 and at least two years of “well-established” credit history, without saying precisely what that means. This isn’t a suitable option for credit-impaired borrowers.
For more information, check out our full Axos Bank review.
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9. Discover Personal Loans
Discover Personal Loans has the backing of a major financial institution with a reputation for customer-friendliness. Despite its corporate pedigree, Discover Personal Loans is surprisingly agile, with a rapid approval process that supports next-day funding in many cases and a direct payment option that allows borrowers to have Discover pay off their credit card debts directly. Other perks include no origination fees or prepayment penalties. The biggest drawbacks: no short-term borrowing options and unclear underwriting requirements.
- Borrowing Range: Up to $35,000
- Term Options: 36 to 84 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Fair to excellent. Discover doesn’t divulge specific underwriting criteria beyond a $25,000 minimum household income, but does indicate that its process considers a range of credit and noncredit factors.
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10. Upgrade
Upgrade sets itself apart with a rapid funding process that can take as little as 24 hours to work through. That’s certainly welcome news for borrowers who can’t stand to deal with credit card debt any longer. Its biggest downsides include high origination fees and unclear underwriting requirements that provide few clues about applicants’ chances of acceptance.
- Borrowing Range: $1,000 to $35,000
- Term Options: 36 months or 60 months
- Origination Fees: 2.9% to 8%
- Prepayment Penalty: None
- Credit Requirements: Upgrade discloses little about its underwriting requirements. However, it does make clear that it considers noncredit factors, which could be helpful for borrowers with impaired or limited credit.
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Final Word
All of the companies on this list offer reasonably priced personal loans with borrower-friendly terms and few if any restrictions on use, making them ideal for use as credit card debt consolidation loans.
The best option for your own needs will depend on your credit score, how much you need to borrow, how long you’re willing to take to repay your loan, and the maximum monthly payment you can comfortably afford. This is why the importance of using a personal loan quote aggregator like Credible or Fiona can’t be overstated. You’re much more likely to find a loan that works for you when you take this step, rather than applying for the first loan you come across.
Don’t sleep on debt consolidation loan alternatives either. Tally, a credit management tool whose credit lines may help cardholders with carried balances reduce their overall interest expenses, is worth a closer look, for example. The bottom line: If you know you need help paying down credit card debt, it’s out there. You only need to know where to look.
Are you planning to refinance high-interest credit card debt? Which of these companies looks most appealing to you?
