How to Pay off $5,000 in Debt

Get out of debt in as little as six months with low monthly payments

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Written by Lauren Nicholson | Edited by Jessica Sain-Baird | Reviewed July 17, 2024
  • You can pay off $5,000 in credit card debt by transferring it to a loan or balance transfer card, by paying off balances one by one or by making minimum payments.
  • Transferring your balances to a single loan or card with lower rates can save you money on interest and help you pay off debt faster.
  • Paying off $5,000 in debt can take anywhere from six months with a balance transfer card to almost 19 years if you just make minimum payments.
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How to pay off credit card debt

Paying off credit card debt isn’t easy, but it can be simple. Here are the best ways to pay off credit card debt if you can afford the minimum payments:

MethodWhat is it?Best forTime to debt-free
Credit card refinancing loanTransferring multiple credit card balances to a single loanPeople with multiple credit card balances and good to excellent creditTypically 2-7 years
Balance transfer credit cardTransferring multiple credit card balances to a single credit card with a promotional 0% APR periodPeople with good or excellent credit who can afford to pay off the debt in the intro periodTypically 6-21 months (assuming you can afford to pay the $5,000 before the intro period ends)
Debt snowball or debt avalanchePutting extra cash toward one balance at a time while making minimum payments on the other balancesPeople who can afford to pay more than the minimum but don’t qualify for lower rates with a refinancing loan or balance transfer cardDepends on how aggressively you pay down debt
Minimum payments on current credit card billsPaying only the minimum on each balancePeople who can’t afford more than the minimum paymentsCan be almost 19 years

Credit card refinancing loan

When you take out a credit card refinancing loan, you exchange multiple credit card balances for a single loan. Since these loans often come with lower interest rates than credit cards, refinancing your credit card debt with a loan could help you save hundreds or even thousands of dollars in interest.

As a bonus, you’ll trade several balances for one, saving you the headache of keeping track of multiple due dates.

Best loans to pay off $5,000 in debt

7.99% - 24.99%

36 to 84 months

$2,500 - $40,000

720

Pros
  • No upfront fees or penalty for paying off loan early
  • Fast funding
  • Check rates without damaging credit
  • Pays off creditors directly
Cons
  • Need good to excellent credit to qualify
  • Late payment fee

What to know

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When you get a debt consolidation loan with Discover, you can have your funds sent directly to your credit card companies as soon as the next business day. You’ll skip out on upfront administrative charges called origination fees, and you won’t have to pay a penalty for paying off your loan early if you happen to free up some extra funds in advance of your due date.

That said, you’ll need to make payments on time. Otherwise, Discover will charge a $39 late fee.

Read our full Discover personal loan review.

How to qualify

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To qualify for a Discover loan, you must meet the following criteria:

  • Minimum credit score: 720
  • Minimum individual/household income: $40,000
  • Be 18 or older
  • Have a valid Social Security number
  • Have a physical address, email address and internet access to submit your application online
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7.99% - 35.99%

24 to 72 months

$1,000 - $36,500

660

Pros
  • Get money as soon as next business day
  • Check rates without impacting credit
  • No fee for paying off loan early
Cons
  • No joint or cosigned loans
  • Upfront origination fee
  • High maximum APR

What to know

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You can trade your credit card debt for a LendingPoint loan as soon as the next business day after approval, and you can qualify with a credit score as low as 660.

That said, since borrowers with a fair credit score are likely to qualify for interest rates on the higher end of the annual percentage rate (APR) range, fair-credit borrowers may not save enough on interest to make refinancing credit card debt with LendingPoint worthwhile.

Read our full LendingPoint personal loan review.

How to qualify

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To get a loan from LendingPoint, you must meet their minimum criteria:

  • Minimum credit score: 660
  • Minimum annual income: $35,000
  • Be 18 years or older
  • Provide U.S. government-issued identification
  • Have a banking account and Social Security number
  • Not live in Nevada or West Virginia
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8.99% - 29.99% (with discounts)

Pricing Disclosure

Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to 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 receive a loan from SoFi. Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.

24 to 84 months

$5,000 - $100,000

680

Pros
  • Money as soon as the same day
  • No mandatory fees
  • Check rates without damaging credit
  • Pays off credit cards directly
Cons
  • Better starting APRs available with other lenders
  • Must borrow at least $5,000

What to know

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Not only does SoFi offer credit card refinancing loans, but you’ll also get a 0.25% discount on your interest rate if you allow SoFi to pay your credit card company directly. SoFi offers competitive rates — you can see them without damaging your credit by prequalifying for a loan.

If your credit card debt doesn’t quite reach the $5,000 mark, consider another lender on this list. SoFi loans start at $5,000, and you should only borrow what you absolutely need.

Read our full SoFi personal loan review.

How to qualify

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To qualify for a SoFi loan, you must meet the following requirements:

  • Minimum credit score: 680
  • Residency: U.S. citizen, eligible permanent resident or non-permanent resident (including DACA recipients and asylum seekers)
  • Be at least the age of majority in your state
  • Have sufficient income from employment or other sources, or have an offer for a job that starts within 90 days
  • Live in an eligible state
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9.99% - 35.99% (with discounts)

24 to 84 months

$1,000 - $50,000

580

Pros
  • Check rates without impacting credit
  • Get money within one business day
  • Pays off creditors directly
  • No penalty for paying off loan early
Cons
  • Charges upfront fee
  • High maximum APR
  • Late payment fee

What to know

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Upgrade offers a slew of benefits for borrowers refinancing credit card debt. You can prequalify for a loan, pay off your credit card company directly and avoid a prepayment penalty for paying off your loan early. If you do refinance your credit cards with an Upgrade loan, you’ll need to pay a one-time origination fee of 1.85% - 9.99%. Upgrade also charges a fee for late payments.

Read our full Upgrade personal loan review.

How to qualify

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To get a loan through Upgrade, you’ll need to meet these requirements:

  • Minimum credit score: 580
  • Be a U.S. citizen, permanent resident or live in the U.S. on a valid visa
  • Be at least 18 years old, or 19 in Alabama and certain other states
  • Have a bank account
  • Have a valid email address
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7.40% - 35.99%

36 or 60 months

$1,000 - $50,000

300

Pros
  • See rates without impacting credit
  • Available to borrowers with poor credit
  • Fast funding
Cons
  • Charges upfront fee called an origination fee
  • Only two loan term options

What to know

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Upstart offers the most competitive starting interest rates of the lenders on this list, making them a solid choice for borrowers with excellent credit who want to refinance credit card debt. While you may qualify for an Upstart loan even if you have bad credit, Upstart’s high maximum APR may not save you money on interest payments.

Note that Upstart only offers two term lengths: 36 or 60 months. If neither of those terms work for you, consider another lender on this list.

Read our full Upstart personal loan review.

How to qualify

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To get a loan with Upstart, you’ll need to meet these eligibility requirements:

  • Minimum credit score: 300
  • If you don’t have a credit score, you must have graduated from or be currently enrolled in an eligible advanced-degree-granting program
  • Be 18 years or older
  • Have a Social Security number
  • Have a U.S. address
  • Have an email address
  • Have a U.S. banking account
  • Be employed, have a job offer to start within six months or have another regular source of income
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Balance transfer credit card

Paying down credit card debt without spending a cent on interest may sound too good to be true, but it’s possible with a balance transfer credit card. Balance transfer cards often come with an introductory 0% APR period that lasts from six to 21 months.

If you can afford to pay off your debt during the promotional APR period, a balance transfer card may be your best bet. For example, with $5,000 of debt, a six-month intro APR balance transfer card would allow you to pay off your debt interest-free with $833.33/month payments. Meanwhile, a 21-month intro APR balance transfer card would allow you to pay off your debt interest-free at $238.10/month.

Here’s the catch: You’ll need good (or even excellent) credit to qualify, and most cards charge a balance transfer fee of 3% to 5% of your balance when you transfer your debt to the card.

Debt snowball or debt avalanche

If your credit score doesn’t qualify you for low enough rates with a refinancing loan or balance transfer card, you can pay off your credit cards using a debt repayment strategy.

With the debt snowball method, you’ll focus on paying off your smallest debts first. You’ll put any extra money you have toward your smallest balance until it’s paid off, then tackle the next smallest. In the meantime, you’ll continue to make minimum payments on all your cards.

With the debt avalanche method, you’ll pay off cards with the highest interest rates first. Any additional income goes toward the card with the highest APR, and when this balance is paid off, you’ll focus on the balance with the next highest interest rate. Again, you’ll continue to make minimum payments on all your cards.

A recent LendingTree study shows that both debt repayment strategies are effective, so choose one and stick to it until you’re debt-free.

Minimum payments

If you can’t afford to pay more than the minimum and don’t qualify for balance transfer cards or refinancing loans with low rates, you can pay off your debt by making minimum payments on your credit cards.

This is an expensive — and lengthy — way to pay off your debt. A LendingTree study shows that it would take almost 19 years to pay off $5,000 in credit card debt with a 20.99% APR, and you’d make over $12,000 in total payments.

If you want access to better debt repayment methods, take the time to improve your credit score. The better your score, the more likely you’ll be to qualify for low interest rates with a credit card refinancing loan or even 0% APRs with a balance transfer card. The less you spend on interest, the more money you can put toward your debt and the faster you’ll pay it off.

How to get out of debt when you can’t afford payments

If you’re living paycheck to paycheck and you can’t afford to pay the minimum on your credit cards, you have options to pay off your debt. A credit counselor can help you create a debt management plan to pay off your credit card debt in three to five years. You can also work with a debt settlement company to negotiate your debts.

Once you’ve exhausted other debt relief strategies, you can consider filing for bankruptcy to clear your debts.

Frequently asked questions

You’re taking on too much credit card debt if you have to carry a balance on your credit card from month to month in order to make ends meet. High credit card interest rates — an average of 24.80% as of June 2024 — make credit cards one of the most expensive ways to borrow money.
 
While even the most responsible credit card users may need to carry a balance from time to time, the best way to use credit cards is to pay off your balance on time and in full every month.

If you miss a credit card payment, you’ll likely need to pay a late fee, and you’ll be subject to a higher interest rate called a penalty APR. Your credit will take a hit once your payment is over 30 days late.
 
Your credit card company will send your debt to a collections agency if you don’t make payments. If you don’t pay a debt in collections, the debt collections agency can sue you.

Your monthly payments will depend on your interest rate and the length of the loan. Spreading out your payments over a longer period of time will mean lower monthly payments but more money spent on interest over the life of the loan.
 
You can use a loan calculator to determine your monthly payments.

How we chose the best loans for paying off $5,000 in debt

To select the best loans for paying off $5,000 in credit card debt, we considered lenders that offer credit card refinancing loans or loan consolidation. We systematically reviewed and rated lenders based on the following criteria:

  • Accessibility. For this list, we excluded lenders that require membership to get a loan (e.g., credit unions), and we rated the remaining lenders based on how easy it is to apply and qualify for a loan.
  • Rates and terms. We awarded points to lenders based on the competitiveness of their rates and term lengths. Lenders received points for having few (or no) required fees and offering discounts on interest rates.
  • Repayment experience. In order to assess the customer repayment experience, we turned to reputable third-party sources like Trustpilot and the Consumer Financial Protection Bureau. We also considered whether lenders offered unique perks to ongoing customers, like free credit scores or financial coaching.

Of the 30 lenders we reviewed, only five made the cut for the best loans to pay off $5,000 in credit card debt.