If you’re struggling to figure out how to pay off credit card debt, you know how suffocating it can feel. Piles of debt that keep racking up interest can put a huge damper on your budget — and your state of mind.
Luckily, there’s a way out. Regardless of your credit card debt balance, there are strategies you can use to formulate a plan to pay it off. If you’re serious about paying off debt but you’re not sure where to start, continue reading for some helpful tips.
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Debt consolidation loan
If you have good credit, a debt consolidation loan — like a personal loan or home equity loan — might simplify your debt payoff plan and save you money on interest.
When you take out a debt consolidation loan, you use the proceeds to pay off all your credit card debt. Then, instead of making payments to several creditors, you repay a single loan over monthly installments. If you qualify for a loan with low interest rates, this strategy could save you money.
Tip: Before getting a debt consolidation loan, calculate how much it’ll save you after paying any fees. The better your credit, the more likely you’ll qualify for a competitive interest rate on a new loan. If you don’t have good credit, debt consolidation may not save you any money.
Finally, if you’re considering a secured debt consolidation loan — like a home equity loan, for example — make sure you’re comfortable backing your loan with collateral. If you default on the loan, you could lose those assets.
Advertiser DisclosureOverview
Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply, and you'll have up to 12 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans. There are no origination fees, and rates are low — Lightstream's lowest APR beats SoFi's advertised lowest APR by 1 percentage point. But you'll need good credit to qualify.
Unlike most lenders, Lightstream does not let you prequalify on its site. Nor does it provide a contact phone number next to its customer service hours on its website.
Repayment terms
2 - 12 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the next business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
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Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
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Discover Personal Loans offers low APRs, repayment terms up to seven years, no origination fees, nationwide availability, and doesn't require your Social Security number to prequalify on its site. You'll need to have an annual income of at least $40,000, and a FICO score 660 or higher, to be eligible. If your credit score is fair or poor, you'll need to go elsewhere, as Discover doesn't allow cosigners.
Funds are available as soon as the next business day after loan approval.
Eligibility
Available in all 50 states
Time to get funds
Funds can be sent as soon as the next business day after acceptance
Loan uses
Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding
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Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
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LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)
While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 3% and 8%.
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
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SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number.
The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.
Fees
Option to pay an origination fee (up to 6%) in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
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Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power's Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 9.99% with Best Egg.
Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
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Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
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It’s worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). The platform offers loans from a wide range of lenders, and next-day funding is available. Plus, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email. Loans are available up to $100,000 if you apply via Splash’s website.
Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere. If you need a repayment term longer than five years, you’ll need to look elsewhere as well.
Loan amount
$5,000 - $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Time to get funds
Same day available, typically 1-3 days
Loan uses
Debt consolidation, home improvement, medical expenses, major purchases
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Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
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Happy Money has been in operation since 2009 (formerly known as Payoff). It's an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that's not as high as some other lenders' origination fees.
You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren't available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
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BHG Financial stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can't prequalify with BHG.
Fees
Origination fees, late fees
Eligibility
Available in all states except Maryland and Illinois
Loan uses
Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other
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Reach is an option if you have fair credit, especially if you need money fast. According to the company, 90% of Reach personal loans are funded within one day of approval.
It's a good choice for debt consolidation and credit card refinancing, but borrowers with excellent credit may not find the lowest rates with Reach. The company also charges more fees than some of its competitors and doesn't offer direct pay or autopay discounts. If you need a 7-year term loan, you'll need to look elsewhere. Reach personal loans are not available in all states.
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Read full reviewOverview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Read full reviewNegotiate credit card debt
Before creating a debt payoff plan, it’s worth giving your credit card companies a call. You may be able to negotiate your credit card debt, and doing so could make your debt payoff journey a little easier.
Tip: Before you call, make sure you have your balances and annual percentage rates (APRs) handy. Note any fees, too. When you call, explain your situation and ask if you qualify for any relief. You can ask about waiving fees, securing a lower interest rate, or getting on a payment plan. In general, credit card companies want to keep their customers and get paid, so they may be willing to negotiate.
Keep notes detailing the conversation, and ask for any new terms in writing.
Determine a debt payoff plan
Once you’ve negotiated down your credit card debt, it’s time to create a payoff plan. Start by listing out all your credit cards and their balances, APRs, and minimum payments. If you have any other debts — like personal loans, car loans, or home equity loans — list those, too. Keep track of all this information in a spreadsheet.
Making a payoff plan also requires knowing your income and expenses. If you don’t already have a budget, spend some time figuring out how much money comes in each month and how much goes out. Without knowing how much money you can put toward your debt each month, you’ll have a hard time creating and sticking to a plan.
Tip:
As you organize your numbers, you might want to play around with a debt payoff calculator online. By plugging in your balances, interest rates, and potential monthly payments, you can estimate how long it’ll take to pay off your debt.
Debt repayment methods
Laying out all your debt in a well-organized spreadsheet helps you execute a debt repayment method. There are two popular debt repayment methods, each with its own merits: the debt avalanche method and the debt snowball method.
The debt avalanche method pays off your debts one by one according to their interest rates. Here’s how it works:
- Organize your debts according to interest rate, from highest to lowest.
- Make minimum payments on all your debts. Put any extra cash you can afford toward the debt with the highest interest rate until it’s paid off.
- When the first debt is gone, put the money you would have paid toward it — plus any extra — toward the next debt on your list. Repeat until all the debt is gone.
This method ends up saving you money in the long run because you’re getting rid of your highest-interest debt first — which costs the most, relative to your balance. However, it also takes longer to pay off your debt.
The debt snowball method, on the other hand, has you pay off your debts according to balance. It works like this:
- Organize your debts according to balance — from smallest to largest.
- Make minimum payments on all your debts. Put any extra cash you can afford toward your smallest debt until it’s paid off.
- When the first debt is gone, put the money you would have paid toward it — plus any extra — toward the next debt on your list. Continue until all the debt is gone.
This method isn’t the most cost-effective, but it may be the easiest to stick to. By paying off the smallest balance first, you can celebrate a quick win and use that momentum to keep yourself going.
Balance transfer credit card
A balance transfer credit card lets you transfer high-interest balances to a card with a no-interest promotional period. You’ll pay a fee, but you’ll also enjoy 0% APR during the card’s introductory period — usually six to 18 months. During that time, you can use any money you’d spend on interest to pay down your principal.
Using a 0% balance transfer card can be a great way to make progress toward debt payoff since you won’t be accruing interest during the promotional period. Plus, it can simplify your payments by consolidating them in a single card. But it may not be the best idea if you can’t pay off your debt within the introductory period or if the fees outweigh potential savings.
Learn More: Personal Loan vs. 0% APR Credit Card
Other alternatives
If the above tactics aren’t enough to make a significant dent in your debt, you’re not out of options. You can always get support with the alternatives below:
- Use credit counseling services: Typically employed by nonprofit organizations, credit counselors can help you create a personalized budget and debt payoff plan. They may even set you up with a debt management program (more below), which can help you save on fees and interest. Check out the National Foundation for Credit Counseling to connect with a counselor.
- Consider a debt management program: A credit counselor may help you negotiate lower monthly payments as part of a debt management program. You’ll give your monthly debt payments to a credit counselor, and they’ll handle the payment to creditors on your behalf — potentially for a small fee.
- Explore bankruptcy as a last resort: Bankruptcy isn’t ideal, but it’s something to consider when you’ve run out of other options. Bankruptcy is a legal process that can help give you a clean slate, by either selling your assets to repay debts or setting up a repayment plan. While bankruptcy can provide a fresh start for some, it severely hurts your credit for 7 to 10 years and can make borrowing more difficult in the future.
FAQ
What happens to credit card debt when you die?
Your estate typically pays any outstanding credit card debt. But if there isn’t enough money to cover the debt, it may go unpaid. If any of your accounts include cosigners or co-borrowers, they’ll be responsible for paying off the debt.
How much credit card debt is too much?
It depends on your financial situation, but there’s no magic number when it comes to the “right” amount of credit card debt.
However, there are a couple of benchmarks — like your debt-to-income ratio and credit utilization — that you may find helpful. If either of these is too high, you may have a hard time staying on top of your debt payments or qualifying for loans and credit in the future.
Learn More: How Much Credit Card Debt Is Too Much?
How can I improve my credit score while paying off credit card debt?
Stay on top of all your debt payments. Even if you’re prioritizing paying off one credit card at a time, it’s important to make minimum payments on all the others. Payment history is the biggest factor affecting your credit score, so making consistent, on-time payments will go a long way in helping you build credit.
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Meet the expert:
Emily Batdorf
Emily Batdorf is a personal finance expert, specializing in banking, lending, credit cards, and budgeting. Drawing on her scientific background, she's developed a knack for analyzing financial products in the context of different needs. She finds joy in helping readers understand their best options and shuns a one-size-fits-all approach.