November 27, 2022

Best Personal Loans for Credit Card Refinance | U.S. News

A personal loan for refinancing credit cards can offer a lifeline for consolidating credit card debt. The trick is finding the best debt consolidation loan to pay off credit cards at a lower interest rate that will help you save money.

Here’s how you can find the best debt consolidation loan with the most favorable terms that you have the best odds of qualifying for.

  • What are the best credit card debt consolidation loans?
  • What is credit card refinancing?
  • What is the smartest way to consolidate credit card debt?
  • Does credit card refinancing hurt your credit score?
  • What is the best loan to consolidate credit card debt?

What Are the Best Credit Card Refinance Loans?

LightStream

2.49% to 19.99% APR
$100,000 Max. Loan Amount
660 Min. Credit Score

Upstart

8.69% to 35.99% APR
$50,000 Max. Loan Amount
620 Min. Credit Score

Payoff

5.99% to 24.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Rocket Loans

7.16% to 29.99% APR
$45,000 Max. Loan Amount
Not disclosed Min. Credit Score

Avant

9.95% to 35.95% APR
$35,000 Max. Loan Amount
550 Min. Credit Score

SoFi

5.99% to 18.28% APR
$100,000 Max. Loan Amount
680 Min. Credit Score

Best Egg

4.99% to 29.99% APR
$50,000 Max. Loan Amount
640 Min. Credit Score

LendingClub

10.68% to 35.89% APR
$40,000 Max. Loan Amount
600 Min. Credit Score

Peerform

5.99% to 29.99% APR
$25,000 Max. Loan Amount
600 Min. Credit Score

Upgrade

7.99% to 35.97% APR
$50,000 Max. Loan Amount
Not disclosed Min. Credit Score

Discover

6.99% to 24.99% APR
$35,000 Max. Loan Amount
660 Min. Credit Score

Axos Bank

6.49% to 29.99% APR
$35,000 Max. Loan Amount
720 Min. Credit Score

FreedomPlus

7.99% to 29.99% APR
$40,000 Max. Loan Amount
620 Min. Credit Score

Prosper

7.95% to 35.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Lender

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2.49% to 19.99% APR
$100,000 Max. Loan Amount
660 Min. Credit Score

Lender

Learn More
8.69% to 35.99% APR
$50,000 Max. Loan Amount
620 Min. Credit Score

Lender

Learn More
5.99% to 24.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Lender

Learn More
7.16% to 29.99% APR
$45,000 Max. Loan Amount
Not disclosed Min. Credit Score

Lender

Learn More
9.95% to 35.95% APR
$35,000 Max. Loan Amount
550 Min. Credit Score

Lender

Learn More
5.99% to 18.28% APR
$100,000 Max. Loan Amount
680 Min. Credit Score

Lender

Learn More
4.99% to 29.99% APR
$50,000 Max. Loan Amount
640 Min. Credit Score

Lender

Learn More
10.68% to 35.89% APR
$40,000 Max. Loan Amount
600 Min. Credit Score

Lender

Learn More
5.99% to 29.99% APR
$25,000 Max. Loan Amount
600 Min. Credit Score

Lender

Learn More
7.99% to 35.97% APR
$50,000 Max. Loan Amount
Not disclosed Min. Credit Score

Lender

Learn More
6.99% to 24.99% APR
$35,000 Max. Loan Amount
660 Min. Credit Score

Lender

Learn More
6.49% to 29.99% APR
$35,000 Max. Loan Amount
720 Min. Credit Score

Lender

Learn More
7.99% to 29.99% APR
$40,000 Max. Loan Amount
620 Min. Credit Score

Lender

Learn More
7.95% to 35.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Lender

Learn More

APR

Max. Loan Amount

Min. Credit Score

2.49% to 19.99% $100,000 660

6.49% to 17.99% $20,000 Not disclosed

8.69% to 35.99% $50,000 620

5.99% to 24.99% $40,000 640

7.16% to 29.99% $45,000 Not disclosed

9.95% to 35.95% $35,000 550

6.99% to 19.99% $40,000 660

5.99% to 18.28% $100,000 680

4.99% to 29.99% $50,000 640

10.68% to 35.89% $40,000 600

5.99% to 29.99% $25,000 600

7.99% to 35.97% $50,000 Not disclosed

9.99% to 35.99% $25,000 600

6.99% to 24.99% $35,000 660

6.49% to 29.99% $35,000 720

7.99% to 29.99% $40,000 620

7.95% to 35.99% $40,000 640

Best for low interest

LightStream is the national online consumer lending division of SunTrust Bank, which in 2019 became Truist after merging with BB&T. The key feature of LightStream’s online personal loans is that they can be up to $100,000 and used for nearly any reason, outside of refinancing existing LightStream loans. Personal loans are available to borrowers with good to excellent credit in all 50 states.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 144 months
  • Better Business Bureau rating: A+

Best Features

  • A variety of loan uses are available.

  • Loans of up to $100,000 are available.

See full profile

Best for low minimum loan amounts

PenFed Credit Union serves members of the Armed Forces, Department of Defense, Department of Homeland Security, military associations, eligible veterans and retirees, and their families. However, military association is not required to apply for a loan or become a credit union member. The credit union offers personal loans for eligible members and eligible co-borrowers in all 50 states.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: $500 to $20,000
  • Repayment terms: up to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Terms of up to 60 months.

  • There are no origination fees.

  • Borrowers can get access to funds as early as the day after approval.

See full profile

Best for borrowers with no credit or poor credit

Upstart is an online marketplace lender that connects borrowers and investors to originate personal loans. It offers loans of up to $50,000 to borrowers with fair to excellent credit nationwide, with the exception of Iowa and West Virginia residents. Since it was established in 2012, more than $7 billion in loans have been originated. Many loan decisions made through the platform are automated and use artificial intelligence.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Upstart may accept applicants with fair credit or even those with no credit history, using artificial intelligence to quantify risk.

  • Upstart loans as low as $1,000 are available in most states.

  • The lender’s credit dashboard allows borrowers to see the impact of loan repayments and to modify payment dates.

See full profile

Best for debt consolidation

Payoff offers personal loans designed to consolidate credit card and other high-interest debt. It operates in most states and provides loans of up to $40,000.

Payoff is not a bank; instead, it works with lending partners that originate loans. The company, which considers itself a financial wellness firm, is based in California.

In 2017, Payoff launched a sister company called Happy Money, which takes a psychological approach to money matters. Today, Payoff is a service under the Happy Money umbrella.

Before You Apply

  • Minimum FICO credit score: 640
  • Loan amounts: $5,000 to $40,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Borrowers don’t face prepayment or late fees.

  • Borrowers can get preapproved with no hard credit check.

  • Some borrowers with fair credit may be eligible.

See full profile

Best for digital customer care

Rocket Loans offers personal loans to qualified borrowers in all U.S. states except Iowa, West Virginia and Nevada. These loans are designed for people with fair to excellent credit who need to borrow up to $45,000 for debt consolidation, home improvements, medical expenses and business or other expenses.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: $2,000 to $45,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Same-day loan funding is available in some cases.

  • No prepayment penalties apply.

  • An online application process is available.

See full profile

Best for risky borrowers

Since 2012, Avant has provided access to personal loans to more than 800,000 borrowers nationwide. Borrowers may qualify with fair to excellent credit and can borrow from $2,000 to $35,000.

Before You Apply

  • Minimum FICO credit score: 550
  • Loan amounts: $2,000 to $35,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A

Best Features

  • Loans as low as $2,000 are available.

  • Funding can happen as early as the next business day after approval.

See full profile

Best for no origination fee

Marcus is the consumer bank and lending arm of investment bank Goldman Sachs. Established in 2016, the lender offers personal loans of up to $40,000.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $3,500 to $40,000
  • Repayment terms: 36 to 72 months
  • Better Business Bureau rating: A+

Best Features

  • Marcus does not charge any fees on its personal loans.

  • Borrowers can adjust their payment due date.

See full profile

Best for loans of up to $100,000 with no fees

SoFi, short for Social Finance, offers personal loans of up to $100,000 to borrowers with very good to excellent credit. The lender operates nationwide, but does not offer personal loans in Mississippi, and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, student loan refinancing, home loans and small business financing.

Before You Apply

  • Minimum FICO credit score: 680
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 84 months
  • Better Business Bureau rating: A

Best Features

  • SoFi offers no-fee loans, including no late fees.

  • Loans of up to $100,000 are available.

  • Co-borrowers are accepted.

See full profile

Best for bad credit

Best Egg is a national online lender offering personal loans starting at $2,000 for a variety of purposes. Loans can be funded in as little as one business day.

Before You Apply

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loan funding typically takes one to three business days upon approval.

  • The minimum loan amount is $2,000 in most states.

  • Borrowers incur no prepayment penalty.

See full profile

Best for fair credit

LendingClub is an online marketplace that connects borrowers and investors through its network of lending partners. LendingClub initially launched on Facebook and has evolved into an extensive peer-to-peer lender. Borrowers in all U.S. states except Iowa and U.S. territories who have fair to excellent credit can get $1,000 to $40,000 loans with LendingClub.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $1,000 to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: not rated

Best Features

  • Loans of $1,000 or more are available.

  • Joint applications are accepted.

  • Borrowers can qualify with fair to excellent credit.

See full profile

What Is the Best Interest Rate on a Personal Loan?

When you shop around for the best personal loan interest rate, you can save. Compare your personal loan offers with national average trends for personal loans to know if you’ve found a good deal.

The average personal loan rate is 9.34%. Last week’s average rate was 9.93%.*

*Rate as of May. 21, 2021

Personal Loan Finder

Select your desired loan amount and loan purpose, your credit score range, and your state to see estimated annual percentage rates and loan terms.

What Is Credit Card Refinancing?

Credit card debt consolidation rolls multiple credit card balances into one loan.

With a personal loan for debt consolidation, you borrow a lump sum of money – ideally at a low interest rate. You then use that money to pay off some or all of your high-interest credit card balances.

Taking out a personal loan is one of the best ways to consolidate debt for consumers who have substantial credit card debt, says Mark Victoria, head of unsecured lending at TD Bank. Going forward, you have a single monthly payment to make toward the debt consolidation loan.

Credit card consolidation can offer several financial benefits:

  • You could save money on interest. If your consolidation loan has a lower interest rate than the annual percentage rate for the credit cards you pay off, you’ll pay less interest over time.
  • There are fewer payments to juggle. Going from multiple credit card payments each month to a single monthly payment can help streamline your financial life.
  • You may get out of debt faster. If you have a lower interest rate with a credit card debt consolidation loan, more of your monthly payment goes toward the principal.

There’s also a sense of relief. Debt consolidation gives you a concrete finish line when you know your debt will be paid off, says James Lambridis, founder and CEO of financial information site DebtMD. “An unsecured debt consolidation loan typically lasts from two to five years, so you can give yourself peace of mind that at the end of the term, you will be debt-free once and for all.”

What Is the Smartest Way to Consolidate Credit Card Debt?

You can use a balance transfer credit card to consolidate credit card debt at an introductory 0% interest rate. But balance transfer cards can be more limited than credit card debt consolidation loans.

You may need excellent credit to be approved for a high credit limit to cover all of your credit card balances. You should expect to pay a balance transfer fee, though this fee may be lower than the interest rate on a personal loan. Most balance transfer cards offer 0% interest for 12 to 18 months, which is a shorter term length than the typical personal loan.

Balance transfer cards are best suited for consolidating small credit card balances that you can pay off within the 0% promotional period. Personal loans can be a better solution for larger debt than you can expect to be approved for on a credit card and may take more time to pay off.

“If you don’t qualify for one of the top balance transfer credit cards, using a personal loan to consolidate debt is an excellent option. A loan gives you an opportunity to pay off your debt at a lower interest rate,” says Beverly Harzog, credit card expert and consumer finance analyst at U.S. News.

Other debt consolidation loans for credit card refinancing include home equity loans and 401(k) loans. These options can be problematic, as you risk losing your home or retirement savings if you default.

Does Credit Card Refinancing Hurt Your Credit Score?

Consolidating credit card debts using a personal loan can affect your credit score both positively and negatively. However, successfully paying off credit card debt using a personal loan should have a more positive than negative effect on your credit.

Applying for a loan to consolidate credit card debt can trigger a hard inquiry against your credit report, which can take a few points off your credit score. Most lenders allow you to check your rate and loan amount with a soft credit inquiry, which doesn’t affect your credit. Rate checks allow you to shop around for the best debt consolidation loan before you submit a formal application, which does trigger a hard inquiry.

Once you have a new loan open, that can affect the overall age of your credit. As a general rule, the older your account history, the better. Newer accounts could trim a few points off your score.

But inquiries and credit age are smaller factors than payment history and credit utilization, which a credit card refinancing personal loan can help with. Paying your new loan on time can improve your payment history, which accounts for 35% of your FICO score. If you’re paying off credit cards, that can improve your credit utilization ratio, which counts for 30% of your FICO score.

The two biggest mistakes to avoid with credit card debt consolidation loans are late payments and running up new balances on the cards you just paid off. Doing so can hurt your credit history and push you farther into debt.

Victoria says some people go in with the best intentions of consolidating into one loan at a lower rate. However, even though the debt has shifted, consumers should keep in mind that they still likely have access to the credit cards that got them there in the first place.

“Consolidating is the first step,” he says. “Changing spending habits should be the next priority.”

What Is the Best Loan to Consolidate Credit Card Debt?

If you’re interested in the best debt consolidation loan to pay off credit cards, it helps to know how to compare consolidation loan companies. As you’re shopping around for a personal loan to eliminate credit card debt, consider these factors:

  • Minimum loan amount
  • Maximum loan amount
  • Minimum and maximum loan repayment terms
  • Interest rate and APR
  • Loan fees, including origination fees, late payment fees and prepayment penalties
  • Funding and payment options
  • Minimum credit score and income requirements
  • Customer service reviews

When looking for the best credit card debt consolidation options, it’s important to figure out what works best for your budget. That also means taking into account what your new monthly payment would be for a loan. Understand how long it will take you to pay it off and what you’ll pay in interest.

“You should only consolidate your debt if you’re able to lock yourself in at a lower interest rate and/or lower your monthly payment,” Lambridis says. He cautions that a lower credit score could translate to a higher interest rate on a credit card consolidation loan, potentially overriding any savings benefit.

Find out how fast you’ll receive funds: Some loan companies offer funding as soon as the next business day. If the lender offers direct payment, it can send funds directly to your creditors to pay off accounts.

Flexible payment options can help, too. Some lenders may allow you to set your payment due date, which can help you balance monthly payments in a way that works best for you.

View More Best Credit Card Refinance Loans

Best for peer-to-peer loans of up to $25,000

Peerform is a marketplace lending platform that connects borrowers nationwide with investors. Borrowers with a credit score of 600 or higher may qualify for loans of up to $25,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $4,000 to $25,000
  • Repayment terms: undisclosed
  • Better Business Bureau rating: A

Best Features

  • Some borrowers with fair credit may qualify.

  • Borrowers can complete the entire loan process online.

See full profile

Best for loan amounts of up to $50,000

Upgrade is an online lender that offers personal loans and lines of credits nationwide. Borrowers can qualify for up to $50,000 in financing.

Lender Highlights

  • Minimum FICO credit score: Not disclosed
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loans and lines of credit are available up to $50,000.

  • Borrowers can complete the entire loan process online.

See full profile

Best for FICO scores between 580 and 669

LendingPoint, which specializes in loans for borrowers with fair credit, has offered online personal loans since 2014. The lender, operating in 49 states and the District of Columbia, provides loans as large as $25,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $2,000 to $25,000
  • Repayment terms: 24 to 48 months
  • Better Business Bureau rating: A+

Best Features

  • Loan funds are available as soon as one day after approval.

  • Borrowers with fair credit may qualify.

See full profile

Best for low costs

Discover is a digital bank and payment services company known for its credit cards. But Discover also offers other products including fixed-rate personal loans of up to $35,000 to borrowers in all 50 states and Washington, D.C. The lender boasts no fees as long as you pay on time.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $2,500 to $35,000
  • Repayment terms: 36 to 84 months
  • Better Business Bureau rating: A+

Best Features

  • Discover has no fees other than a late fee.

  • Customizable loan terms from 36 to 84 months.

  • Borrowers get free access to their FICO credit score.

See full profile

Best for flexible loan terms

Axos Bank launched in 2000 and is owned by San Diego-based Axos Financial. You won’t find any brick-and-mortar branches, but the bank has offices throughout the country. Aside from personal loans, Axos Bank offers CDs, plus checking, savings, money market and retirement accounts.

Before You Apply

  • Minimum FICO credit score: 720
  • Loan amounts: $5,000 to $35,000
  • Repayment terms: 12 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • The loan application process is completely digital because Axos Bank is online only.

  • Flexible loan terms are one to five years.

  • You can borrow between $5,000 and $35,000.

See full profile

Best for below-average credit

FreedomPlus is an online lender offering personal loans ranging from $7,500 to $40,000. Loans are available to qualified borrowers with a minimum FICO credit score of 620.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $7,500 to $40,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Borrowers with fair credit may qualify for a loan.

  • Loans of up to $40,000 are available.

  • Same-day approval is available, with loans funded in as little as 48 hours.

See full profile

Best for post-sales support

Prosper is a peer-to-peer lending marketplace that allows borrowers to apply online for fixed-rate, fixed-term loans. Prosper matches borrowers with partner investors including Sequoia Capital, Francisco Partners, Institutional Venture Partners and Credit Suisse Fund. Since its founding in 2005, Prosper has expedited more than $18 billion in loans. Prosper lends to borrowers with fair to excellent credit with a minimum 640 FICO score.

Lender Highlights

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Prosper offers preapproval with a soft credit check.

  • Small-dollar loans of $2,000 or more are available.

  • Joint personal loans are available.

See full profile

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who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.

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