If you’re feeling overwhelmed by Credit card debt, you’re not alone. Most adults in the U.S. have at least one credit card account, and the average credit card balance was $5,313 in the last half of 2020, according to Experian.
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However, there are options that could help you more easily manage credit card debt — such as credit card refinancing. Through refinancing, you might get a lower interest rate or even pay off your credit card debt faster.
Here’s what you should know about credit card refinancing:
- What is credit card refinancing?
- What are the benefits of refinancing debt?
- How much could you save by refinancing your credit cards?
- How do I find the best credit card refinancing loan?
- Is refinancing a credit card a good idea?
- Alternatives to credit card refinancing
What is credit card refinancing?
Credit card refinancing — also known as credit card consolidation or debt consolidation — is when you take out a personal Loan to pay off your credit cards. This leaves you with just one loan and one payment to handle.
Learn More: What Is a Personal Loan?
What are the benefits of refinancing debt?
There are several potential benefits of refinancing your credit card debt. For example, you could:
- Get a lower interest rate: The average credit card interest rate is 16.13% — though some borrowers will end up with higher interest rates, depending on their credit as well as the credit card issuer. But if you refinance your credit card debt, you might qualify for a lower interest rate, depending on your credit. This could save you money on interest charges and even help you pay off your credit card debt faster.
- Reduce your monthly payment: If you opt for a longer repayment term through refinancing, you could reduce your monthly payments and lessen 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 debts from multiple credit cards: It can be difficult to keep track of multiple credit cards with different interest rates and payments. Through refinancing, you can combine the debt from each of your credit cards into one new loan. In many cases, you also have the option of consolidating other types of debt along with your credit cards, such as medical bills or unsecured personal loans.
Check Out: Pay Off Credit Card Debt ASAP With a Personal Loan
How much could you save by refinancing your credit cards?
It’s also possible that you can pay off your credit card on your own — however, refinancing might help you save money along the way.
But if you refinanced the balance into a new three-year loan with the average personal loan interest rate of 11.75%, you’d pay $1,017 in interest. This means you’d save $406 in comparison to paying off the card without refinancing.
If you decide to refinance your credit cards with a personal loan, be sure to consider how much that loan will cost you over time and whether the savings are worth it for you. 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: How to Negotiate a Lower Credit Card Interest Rate
How do I find the best credit card refinancing loan?
To find the best credit card refinancing loan for your needs, it’s important to compare as many personal loan lenders as you can.
Here are several areas to consider as you shop around and research your options:
- Interest rates: The interest rates you qualify for are mainly determined by your credit as well as your repayment term. You’ll typically need good to excellent credit to qualify for the lowest personal loan interest rates.
- Repayment terms: Personal loan repayment terms usually range from one to seven years, depending on the lender. It’s usually a good idea to choose the shortest repayment term you can afford to save as much as you can — especially since shorter terms tend to come with lower interest rates. But if you need a lower monthly payment, then a longer term might work better for you — though you’ll pay more in interest over time.
- Fees: Personal loans sometimes come with fees — such as origination fees or late fees — which could add to your overall loan cost. Keep in mind that if you take out a loan with one of Credible’s partner lenders, you won’t have to worry about prepayment penalties.
If you’re ready to find a credit card refinancing loan, Credible can help. You can compare your prequalified rates from our partner lenders in the table below that offer personal loans for credit card refinancing in just two minutes.
| Lender | Fixed rates | Loan amounts | Min. credit score | Loan terms (years) |
|---|---|---|---|---|
| 9.95% - 35.99% APR | $2,000 to $35,000** | 550 | 2, 3, 4, 5* | |
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| 6.49% - 29.99% APR | $5,000 to $35,000 | 740 | 1, 2, 3, 4, 5 | |
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| 5.99% - 29.99% APR | $5,000 to $35,000 | 600 | 3, 5 | |
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| 6.99% - 24.99% APR | $2,500 to $35,000 | 660 | 3, 4, 5, 6, 7 | |
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| 7.99% - 29.99% APR | $7,500 to $50,000 | Not disclosed by lender | 2, 3, 4, 5 | |
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| 10.68% - 35.89% APR | $1,000 to $40,000 | 600 | 3, 5 | |
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| 15.49% - 35.99% APR | $2,000 to $25,000 | 580 | 2, 3, 4 | |
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| 3.99% - 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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| 6.99% - 19.99% APR1 | $3,500 to $40,0002 | 660 (TransUnion FICO®️ Score 9) | 3, 4, 5, 6, 7 | |
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