Best Credit Card Debt Consolidation Loans

Average credit card consolidation loan rates

The rate you’ll get on a credit card consolidation loan depends on your income, credit score, and amount of debt you want to consolidate — but it mostly depends on your credit score. Almost 15,000 people took out a credit card consolidation loan through Credible over the last 12 months. Below are the average rates they received broken down by credit score:

Best credit card consolidation loan lenders of 2025

Credit card refinancing is the second-most common use for personal loans on the Credible marketplace. More than 23% of Credible personal loan borrowers used their loan to refinance credit cards in September 2025, with an average disbursed loan amount of $23,907.

What is credit card consolidation?

Credit card consolidation, a type of debt consolidation, is the process of rolling multiple credit card balances into one new loan with a single monthly payment.
You might consolidate credit card debt to lower your monthly payments and/or interest rate. Or you might just want to replace several monthly payments and different due dates with one, which could mean fewer missed payments and late fees. 

It’s common to consolidate credit card debt with a personal loan, home equity loan, or balance transfer credit card. However, you would only want to transfer balances to a new card if you’re eligible for a low or 0% APR promotion on a balance transfer. And ideally, you’d pay off the balance before the promotion expires and the rate adjusts to the card’s standard APR. Personal loans and home equity loans are often better choices for credit card consolidation (especially if you need years to pay off the new loan) since credit card APRs are much higher, on average, than rates on personal loans and home equity loans. 

How do credit card consolidation loans work?

You can use a few different loan types to consolidate credit card debt. The best choice for many borrowers is a personal loan — they have lower rates, on average, than credit cards, don’t require that you own a home or have home equity, and can be funded within days of your application. Here’s what to know about personal loans:

• Loan amounts: Depending on the lender and your qualifications, you could get a loan from $1,000 to $250,000. 
• Interest rates: Unlike credit cards, personal loan rates are typically fixed, meaning your payment won’t change if rates rise. The average APR on a 2-year personal loan was 11.14%, according to Federal Reserve data in October — much lower than the average credit card APR of 21.39%. Your APR depends on your income, credit score, and debt. Most personal loans cap rates at 35.99%.
• Repayment terms: Repayment terms typically range from 2 to 7 years. Though a few lenders, like BHG Financial, offer longer terms for credit card consolidation. While a longer term can mean smaller monthly payments, it can also lead to higher overall interest costs (and more time in debt).
• Fees: Like most loans, most personal loans have fees if you miss a payment or if your payment doesn’t go through. The one to look out for is an origination fee. This is an upfront fee, reflected in the loan’s APR, that can reduce the loan amount you receive — which means you could have to borrow more to offset the origination fee and fully pay off your cards. Not all lenders charge origination fees, and you're more likely to have one if your credit is less than excellent. 
• Funding times: Credit card consolidation loans are often funded within days of your loan’s approval. You have the option to receive the money directly, which could be as soon as the same day you apply with a handful of lenders. Or, the lender may be able to send funds to your creditors directly — this process could take 5 days or more, depending on the lender. 
• Eligibility criteria: Most lenders have minimum income, credit score, and debt-to-income (DTI) requirements. For example, you need to earn $25,000 annually to be eligible for an Upgrade loan or $100,000 annually to be eligible for a loan from BHG. Some lenders allow co-applicants or cosigners, which can boost your approval odds and help you get better rates.

Expert take: 

“Refinancing works well when you’re dealing with a single large debt and can secure a lower interest rate, saving money over time. Consolidation, on the other hand, is great for managing multiple debts, combining them into one payment, and possibly lowering the overall interest rate.” —Matt Schwartz, Co-Founder at VA Loan Network

Does credit card consolidation affect your credit score?

Credit card consolidation can affect your credit score in positive and negative ways. When you apply for a new loan, the lender will conduct a hard inquiry. This could bring your credit score down temporarily, by up to 10 points for up to one year. However, once you pay off your credit card debt, you could see a quick and significant boost in your credit score. This is because in paying off your cards, you decrease the amount of credit you're using — which contributes up to 30% to your score.

If you’re approved and agree to take out the loan, you’re adding to your credit mix as well. Credit mix is the different types of accounts you currently have, such as personal installment loans, retail accounts, mortgage loans, and credit cards. You don’t need to have one of each, but adding a new loan type could improve your score.

Last but certainly not least, making on-time loan payments can give your score a boost. Payment history accounts for 35% of your overall FICO score, more than any other single category. On the other hand, missed or late payments can hurt your credit.

Related: How Does a Personal Loan Affect Your Credit Score?

Where can I get a credit card consolidation loan?

You can get a credit card consolidation loan from a bank, credit union, or online lender.  You’ll first need to decide which type of credit card consolidation loan to get: personal loan, home equity loan, or balance transfer credit card.

Personal loans are commonly used to consolidate credit card debt because they don’t require home equity, are quick to fund, and have much lower interest rates, on average, than credit cards. Many online lenders, banks, and credit unions offer personal loans. Keep in mind that some banks, such as Wells Fargo, only offer personal loans to existing customers. 

• Credit unions tend to have slightly lower rates than banks, generally maxing out around 18% APR. You’ll need to be a member or eligible for membership to apply. 
• Banks often have high-end rates in the mid-20% APR range. Credit requirements tend to be the most strict compared to other types of lenders.
• Online lenders often have maximum APRs of 36% and are more willing to work with borrowers with fair and bad credit.

Understanding this is important because if you can qualify for a personal loan from a bank or credit union with fair credit, you could get a lower rate relative to an online lender. If you have bad credit, an online lender may be your only option. If you have excellent credit, you could find a great rate from any type of lender. Before you apply, prequalify with several lenders (and several types of lenders, if possible) to get a sense which might approve your loan and at what rate. 

It's also important to keep customer service in mind. If you prefer a branch location with the option of face-to-face service, a bank or credit union is for you. If you want to manage your loan via app, an online lender is more likely to offer one or to offer a more streamlined version than most credit unions or banks.
 

Pros and cons of credit card consolidation loans

Pros

• Lower interest rates: Credit card consolidation loans typically have lower APRs than credit cards. According to the Federal Reserve, the average rate on two-year personal loans is 11.14% compared to an average rate of 21.39% for credit cards.
• Fixed interest rates: Most credit cards have variable interest rates, but credit card consolidation loans typically have fixed rates. Fixed interest rates mean consistent monthly payments.
• Simple interest: Credit cards often charge compound interest daily on your balance — this means that interest is added to your balance on which subsequent interest is charged. Most installment loans charge simple interest and amortize payments. Unlike credit cards, you won’t pay interest on unpaid interest.
• Single monthly payment: Consolidating multiple credit cards into a single monthly payment reduces administrative hassle. 
• Lower monthly payments: Getting a lower rate on your new loan may be the best way to reduce monthly payments. Opting for a long repayment period is another way (even if you can’t get a lower rate). And since credit cards often charge compound interest, balances can add up quickly and result in larger monthly payments compared to a personal loan for the same amount. 
• Shorter payoff period: With a lower interest rate on a credit card consolidation loan, you might be able to pay off your debt faster. 
• Potential credit boost: Paying off credit card debt could reduce your credit utilization significantly. This can result in quick score gains, especially if your credit utilization is high. In turn, repaying your credit card consolidation loan can improve or maintain a positive payment history, which also adds to your score. 

Cons 

• Best rates reserved for good credit: Without good or excellent credit, it may be challenging to qualify for an interest rate that saves you money.
• Potential fees: There may be costs involved with taking out a loan, such as an origination fee, which you should weigh against the potential savings of debt consolidation.
• Temporary fix: Consolidating debt can make repayment easier, but it doesn’t solve any underlying spending problems you may have or prevent you from racking up more debt in the future.

Are credit card consolidation loans worth it?

The answer is often yes, especially if you use an installment loan, like a personal loan or home equity loan, to consolidate credit cards. Here’s why:

When credit card consolidation is worth it

• You could get a lower interest rate: The interest rate indicates how much you owe the lender to carry the debt. A higher rate means higher cost. You can save money — sometimes a lot of money — if you consolidate or refinance your credit cards with a lower-interest-rate loan.
• You could lower your payment: A lower interest rate can lower your monthly payment, but so can a longer repayment period. If you need to save or spend on other needs now, it could make sense to extend your debt payoff timeline with a 5-year, 7-year, or longer-term loan even if you end up paying more in interest, overall. 
• You can improve your credit score, quickly: Credit cards are a type of revolving credit, which means they factor into your credit utilization ratio — a measure that impacts your credit score. Credit utilization is the amount of available credit you’re using. If you use an installment loan to pay off revolving credit lines, you can significantly reduce your credit utilization. This can lead to significant score improvements once your paid-off balances are reported the bureaus — typically, monthly.
• You can simplify repayment: If you’re simply tired of tracking multiple credit card payments, you could consolidate to have one new payment. Just make sure you won’t pay more (or much more) for the convenience. Use a credit card consolidation calculator to compare the total interest on a credit card consolidation loan to the interest you’re on track to pay without the new loan.  

However, there are also instances when refinancing or consolidating credit cards may not be worth it. 

When credit card consolidation isn't worth it

• You can’t afford the new payment: If the new payment is more than you can comfortably afford, consolidation is not a good idea. 
• The new loan is more expensive: Even if you can lower your monthly payment, it may not be worth it if you’ll pay more in overall interest. Caveat: If a lower monthly payment can help save your credit, it could be worth increasing your overall cost. 
• You’re not saving enough money to justify a new loan: A new loan often has another cost — a hard credit check at application. This can ding your score by up to 10 points for up to 1 year. If the advantages of consolidating aren’t that great in your particular situation, it might not be worth the credit hit. 
• You’re paying off a joint credit card with an individual account: This could be worth it, but you should use caution. Unlike a joint account, you’re solely responsible for an individual account. For instance, if you pay off a joint credit card you have with your spouse and later divorce, the new debt could remain yours alone. 
• You’re trading unsecured debt for secured debt and are struggling: Home equity loans can be an appealing way to consolidate credit card debt since rates tend to be even lower than personal loans. But that’s because your home is on the line. If you don’t pay your credit cards, you could be hounded with collection calls but the lender doesn’t have immediate recourse to take your property. Whereas, if you don’t pay a home equity loan, you could lose your home. 

Credit card refinancing vs. debt consolidation

Credit card refinancing and debt consolidation are both strategies for managing your credit card debt. They're effectively the same as both use a new type of loan to pay off existing debt — with a new interest rate, repayment term, and monthly payment.

Technically, debt consolidation can include paying off other loan types as well as or instead of credit cards; credit card refinancing is when you only pay off one or more credit cards with a new loan. You can use different loan types for credit card refinancing — a personal loan, home equity loan, or balance transfer credit card. But you may be limited to using a home equity loan or personal loan for debt consolidation since you often can't use a credit card to pay off certain types of debt.

Alternatives to consolidating credit card debt

Sometimes, debt consolidation isn’t the best financial move. Depending on your situation, it may not save you money or be worth the effort. Other times, consolidation simply isn’t practical for the size or extent of your debt. If any of these scenarios applies to you, consider the following alternatives: 

• Debt avalanche: With the debt avalanche method, you pay off your accounts according to interest rate, from highest to lowest. This prioritization removes your most expensive debts first, saving you money and speeding debt payoff. 
• Debt management plan: A debt management plan is a type of debt relief that involves working with a credit counselor. Instead of making monthly payments to a debt consolidation loan lender, you pay a credit counseling organization each month. This organization then pays your creditors and may negotiate lower interest rates to make debt payoff more manageable.
• Debt settlement: Debt settlement involves clearing your debt by negotiating a lower payment than what you actually owe — or paying a debt settlement service to do so. Debt settlement could make sense under extreme circumstances, especially if your credit is already severely damaged. However, using a debt settlement service involves fees, could hurt your credit further, and success isn’t guaranteed. 

Warning: You could incur late payment fees and severe credit damage if a debt settlement service advises you to stop making payments while it negotiates a settlement. A “settled” account will remain on your credit report for seven years from the original date of delinquency. 

Methodology

Credible's rating system incorporates 1,216 data points across 32 partner and non-partner lenders. We rate lenders based on these weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathers information from lender websites and directly from our partners. We consider partner lenders' statistics over a 12-month period — including average rates, average funding times, and average credit scores for approved applicants. Each data point is verified by a senior editor to make sure it's accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of these relationships, we have access to the most current interest rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, approval rates overall and by lender, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.