Credit Card debt is a situation almost everyone would find themselves except you are one of the top earners in the country.
According to a report by CNBC, nearly 25% of Americans are going into credit card debt just to pay for the basic necessities. This makes it increasingly important to get rid of underlying debt to prevent piling up to amounts that would take a lifetime to pay off.
What is Credit Card Consolidation?
A way to quickly and economically pay off credit card debt is through credit card consolidation. Credit card consolidation involves the merging of multiple credit card balances into a single monthly payment.
Rather than having multiple due dates, interest rates and fees to watch out for, you will only have to worry about one.
Credit card consolidation should only be considered if you plan on making positive changes to your spending habits to prevent you from falling back into debt.
Consolidating your debt would temporarily hurt your credit score, but you should be able to gain more points once you are in the clear.
When choosing a credit card consolidation loan company, make sure you check the lender’s profile, features, loan terms, interest rates, and the fees they charge.
Different lenders have different requirements so you will have to take your time to go through the requirements and qualifications before applying.
Below we have listed the Best Credit Card Consolidation Loans Companies to consider.
PayOff offers debt consolidation loans that are used to only pay credit card debt. There are many reasons why PayOff should be a top choice to consider and this is not just because of its low-interest rate alone.
PayOff doesn’t charge check processing fees, late fees, prepayment fees or request for a down payment before approval of the loan. However, it charges origination fees which could be anything from 1% to 5% depending on the loan amount.
To qualify for a loan from Payoff, you will need to have a minimum credit score of 640, a credit history of 2 years and an annual income not less than $40,000.
PayOff’s interest rate also depends on a number of factors which include the credit score and credit history of the borrower. Borrowers with a good credit score could be charged an interest rate as low as 5.99% while those with average credit scores can see this rate rise to 24.99%.
PayOff still remains one of the best choices to consider if you are looking for a credit card consolidation loan between $5,000 and $35,000.
Marcus by Goldman Sachs is one of the best credit card consolidation companies on the internet and for a good reason. While its minimum credit score requirement for qualification is quite high, it offers several other features that would make many borrowers prefer to patronize it.
Marcus’ interest rates are quite similar to those of PayOff. They offer interest rates ranging from 6.99% to 24.99%. Your credit score, credit history and the length of the loan will determine the actual interest rate you will end up with.
A minimum credit score of 660 is needed to qualify. Other qualification requirements include a minimum annual income of $40,000, a valid U.S bank account and tax ID.
The thing that makes Marcus special and different from most lenders is that it does not charge any kind of fees during and after the loan application process. With Marcus, you wouldn’t have to worry about origination fees, late fees, prepayment fees, and any other fee.
Marcus loan amount is between $3,500 and $40,000 and is repayable between 36 to 72 months.
3. Lending Club
Lending Club is a top lender and is probably one of the largest lenders on the internet with over $40 billion in disbursed funds. The fact that it is a reputable brand makes it a great choice to opt for, however, it does come with its own flaws.
Although it requests a minimum credit score of 600, its interest rates are quite high at between 6.9% to 35.89$. The loan amount is between $1,000 and $40,000, and is repayable within 3 – 5 years.
With Lending club, you would have to worry about a ton of fees. Origination, late payment, and check processing fees are just a tip of the iceberg and you will be required to pay more fees depending on your loan terms.
LightStream is a great option to consider if you have a credit score higher than 660. Loan amounts range from $5,000 to $100,000 with interest rates as low of 3.99% for those with a great credit score and 16.99% for those with an average credit score.
LightStream is a great option to consider because you wouldn’t have to worry about origination fees and late payment fees when repaying the loan.
Their loan period is between 2 – 7 years which is just enough time to repay your loan. However, the longer the loan period, the more interest you will have to pay.
Discover doesn’t stand out from many other lenders in our list as its features and requirements are quite similar to theirs. You will need a minimum credit score of 660 to qualify for a loan.
Discover offers fixed interest rate loans with rates between 6.99% and 2.4.99%. The loan amount is between $2,500 and $35,000 with loans periods between 36 to 84 months.
It doesn’t charge any fees which is why it is one of the top lenders in the industry today.
Upstart is another top credit card consolidation company to consider, however, you would need a minimum credit score of 620, a minimum annual income of $12,000 and a debt-to-income ratio not higher than 45%.
Upstart charges origination fees of 1% to 6% of the loan amount. Late payment attracts a fee of 5% of the payment amount. Its loan amount is between $1,000 and $50,000 and is payable within 3 – 5 years.
Sometimes going for a credit card loan consolidation company with a low minimum score requirement might not be the best as you could end up paying high interest rates.
More importantly, make sure you are abreast with the fees and every additional fee the lender would charge before settling for the company.