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If you have high-interest credit card debt, consolidating that debt could help you save money and even repay your balances faster.
One way to do this is through a personal loan — this process is often referred to as either debt consolidation or credit card refinancing.
Here’s what you should know about debt consolidation vs. credit card refinancing:
- What is credit card refinancing?
- Credit card refinancing vs. debt consolidation
- Credit card refinancing vs. balance transfer cards
- How to choose between credit card refinancing and balance transfer cards
What is credit card refinancing?
Credit card refinancing is when you take out a personal loan to pay off your credit card debt. This leaves you with just one loan and one payment to manage.
If you can qualify for a lower interest rate or need to reduce your monthly payment, refinancing your credit card debt might be a good idea.
However, it’s important to consider both the pros and cons of credit card refinancing before deciding if it’s right for you.
Pros
- Could lower your interest rate: Depending on your credit, you might qualify for a lower interest rate than what you’ve currently been paying. This could save you money on interest charges and even help you pay off your loan faster.
- Reduce your monthly payments: If you opt to extend your repayment term through refinancing, you could lower your monthly payment — lessening the strain on your budget. Just keep in mind that choosing a longer repayment term means you’ll pay more in interest over time.
- Combine multiple cards: Refinancing lets you consolidate your credit cards into one loan, which could help make your debt much easier to manage.
Cons
- Might be hard to qualify if you have bad credit: You’ll typically need good to excellent credit to qualify for a personal loan. While some lenders offer debt consolidation loans for bad credit, these usually come with higher interest rates compared to good credit loans.
- Could come with fees: Some personal loan lenders charge fees — such as origination fees — that will add to your overall loan cost.
- Doesn’t reduce debt: Although you might end up paying less in interest, you’re still responsible for all of your original debt. Additionally, you could end up in debt again down the road if you don’t change your financial habits.
If you decide to take out a personal loan to refinance your credit cards, it’s important to consider how much that loan will cost you in the future. This way, you can prepare for any added expenses.
You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Learn More: Debt Consolidation vs. Personal Loan: What Is the Difference?
Credit card refinancing vs. debt consolidation
There is no difference between credit card refinancing and debt consolidation — both refer to the process of taking out a personal loan to pay off your credit card debt.
Before you get a personal loan for credit card consolidation, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders below that offer personal loans for debt consolidation in two minutes.
| Lender | Fixed rates | Loan amounts | Min. credit score | Loan terms (years) |
|---|---|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.95% - 35.99% APR | $2,000 to $35,000** | 550 | 2, 3, 4, 5* |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.79% - 17.99% APR | $5,000 to $35,000 | 740 | 1, 2, 3, 4, 5 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.99% - 29.99% APR | $5,000 to $35,000 | 600 | 2, 3, 4, 5 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99% - 24.99% APR | $2,500 to $35,000 | 660 | 3, 4, 5, 6, 7 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 29.99% APR | $7,500 to $50,000 | Not disclosed by lender | 2, 3, 4, 5 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 10.68% - 35.89% APR | $1,000 to $40,000 | 600 | 3, 5 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 15.49% - 35.99% APR | $2,000 to $36,500 | 580 | 2, 3, 4 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 2.49% - 19.99% APR | $5,000 to $100,000 | 660 | 2, 3, 4, 5, 6, 7 (up to 12 years for home improvement loans) |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.99% - 19.99% APR1 | $3,500 to $40,0002 | 660 (TransUnion FICO®️ Score 9) | 3, 4, 5, 6, 7 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 18.00% - 35.99% APR | $1,500 to $20,000 | None | 2, 3, 4, 5 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.99% - 17.99% APR | $600 to $20,000 (depending on loan term) | 670 | 1, 2, 3, 4, 5 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.95% - 35.99% APR | $2,000 to $40,000 | 640 | 3, 5 |
|
||||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.99% - 18.83% APR | $5,000 to $100,000 | Does not disclose | 2, 3, 4, 5, 6, 7 |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.93% - 35.93% APR7 | $1,000 to $50,000 | 580 | 3 to 5 years 8 |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.94% - 35.97% APR | $1,000 to $50,000 | 580 | 2, 3, 5, 6 |
|
||||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.46% - 35.99% APR4 | $1,000 to $50,0005 | 580 | 3 to 5 years4 |
|
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Credit card refinancing vs. balance transfer cards
Another option for consolidating credit card debt is a balance transfer card. Instead of using a personal loan to pay off your old cards, you’ll move your balances to a new card.
If you’re considering credit card refinancing vs. a balance transfer card, here are some important points to keep in mind:
| Debt consolidation loan | Balance transfer card | |
|---|---|---|
| Average APR | Varies | 16.13% |
| Repayment time | 5 to 20 years (with Credible partner lenders) | N/A |
| Credit needed | Good to excellent | Good to excellent |
| How loan is funded | Lump sum payment sent to borrower (some lenders will pay creditors directly) | Balances are transferred to new card |
Check Out: How Debt Consolidation Loans Can Help Your Credit Score
How to choose between credit card refinancing and balance transfer cards
While both credit card refinancing and balance transfer cards can be used to consolidate debt, there are situations that could make one a better choice over the other.
Here are a few situations where credit card refinancing could be a good option:
- You want to consolidate multiple kinds of debt. If you other kinds of debt in addition to credit cards that you’d like to consolidate — such as medical bills or other loans — then a personal loan for debt consolidation is a better choice.
- You can get a lower interest rate. Personal loans usually come with lower interest rates than credit cards. This could make a debt consolidation loan a good option if you want to save as much as possible on interest while getting out of credit card debt.
- You want a fixed monthly payment. Most personal loans come with fixed interest rates, which means your payment won’t ever change.
On the other hand, a balance transfer card might be a better choice if:
- You can get a card with a 0% APR period. If you can take advantage of a 0% APR introductory period on a balance transfer card, you could avoid paying any interest. Just remember that you’ll have to pay off the card by the time this period ends.
- You don’t owe very much. If you have a smaller balance and get a card with a 0% APR period, you might have an easier time paying off your card in time so you won’t get stuck with interest charges down the line.
- You want to earn rewards. Some balance transfer cards offer rewards like cash back, points, or miles. But be careful — if you’re focused only on earning rewards, you could end up deeper in debt.
If you decide to get a personal loan to consolidate your credit cards, remember to consider as many lenders as possible to find the right loan for your situation. This is easy with Credible — you can compare your prequalified rates from multiple lenders in two minutes.
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Keep Reading: Debt Relief Programs: Options to Reduce Debt
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
