Best Credit Card Consolidation Loans in December 2023

Discover: Best for repayment assistance options

Happy Money: Best for personalized service

Laurel Road: Best for midsize credit card consolidation loan

LightStream: Best for long-term credit card consolidation loan

Prosper: Best for peer-to-peer lending

SoFi: Best for credit card consolidation loan with no fees

Upstart: Best for bad-credit borrowers

The process for getting a credit card consolidation loan is similar to getting any other personal loan:

1. Determine your needs

Before consolidating your credit card debt, you’ll need to know what credit card APRs you’re paying. This will help you determine whether the personal loan offers you receive are competitive for your personal situation.

To figure out what loan amount you should apply for, you’ll also need to add up all of your current card balances. Make sure that the math makes sense before committing — once your credit cards are consolidated, the process can’t be reversed.

2. Research lenders

Don’t necessarily choose a loan from the first lender you find. When making a big financial decision like taking out a consolidation loan, you’ll want to see what’s out there first. For instance, some lenders specialize in bad-credit loans, while others cater to those with excellent credit. Researching lenders can help ensure that you get the consolidation loan with the best terms, based on your financial situation.

3. Prequalify

Prequalification doesn’t hurt your credit score and is an important step in the consolidation process. By prequalifying, you can see what lenders can offer you in terms of funding amount, monthly payment and interest rate. Prequalify for several lenders and see how they stack up.

4. Apply for a loan

Once you’ve decided which lender you’d like to work with, you’ll have to apply for the personal loan. This process will involve a hard credit check and a detailed review of your credit history and financial situation. You’ll likely have to include several documents confirming your identity and information.

5. Pay off your debt

Once you’ve been approved, your lender may help you pay off your credit card issuers — but some might not. You may have to pay the debts yourself once you receive the loan funds in your bank account. Then, you’ll begin to pay off the new consolidation loan on a monthly basis.

Everyone’s financial situation is unique, and your decision whether to consolidate credit card debt will ultimately come down to whether the terms of your new loan would be better than the debt payments you’re already making.

 When it makes sense to consolidate credit card debt

• If it lowers your monthly debt payment, making it more manageable to pay on time
• If you can find a better APR on a personal loan than what you’re paying on credit cards
• If you’re having a difficult time deciding which debt payments to pay off first or how quickly

 When it doesn’t sense to consolidate credit card debt

• If you can’t find a personal loan with a lower APR than the rates you’re paying on your credit card debt
• If you don’t want to take another hard credit check or you’ve opened several new accounts recently
• If you don’t think you can make the new monthly payment consistently

If you’re stuck in credit card debt and looking for a way out, there are options for debt management aside from a consolidation loan:

 Talk to your credit card issuer

Sometimes your credit card company may be willing to help work out a payment plan to let you repay your debts, especially if you’ve fallen behind due to an extenuating circumstance, like a severe financial emergency or unexpected job loss. They want to make sure you’ll be able to pay the debt in full, so they might agree to smaller payments over a longer timeframe.

 Debt management plan via credit counseling

Credit counselors provide services to debtors, including contacting creditors to help negotiate, crafting debt management plans and providing budgeting advice. These accredited professionals often work for nonprofit companies that help people get out of debt and set them up for financial success. Their advice could be helpful if you’re in credit card debt.

 Debt snowball or debt avalanche method

There are many theories on the best way to pay off debt fast. Two common methods are the debt snowball or debt avalanche. With the snowball method, you’ll focus on paying off the smallest debts first to build momentum and work your way toward bigger debts; with the avalanche method, you’ll pay your highest interest debt first, regardless of size. Under either plan, you’ll also make minimum payments on all other debts.

 Balance transfer credit card with 0% APR offer

Some credit card issuers offer cards designed to help pay off credit card debt. With a balance transfer card, you can move some — or even all — of your credit card debts to a new card. If it has a 0% APR introductory period (which often lasts over a year), you can make payments with interest paused. But beware: If you don’t successfully pay off the card by the end of that period, you could wind up deeper in debt.