Turbo Takeaways
- Debt consolidation loans offer a way to reduce costly interest fees on credit card debts.
- These loans work best for consumers who can commit to fixed monthly payments on a new loan.
- Debt settlement is another option to consider before taking out a consolidation loan.
Are Consolidation Loans a Good Choice for Credit Card Debt?
Consolidation loans for credit card debt can be a good idea when you carry a high enough credit score and have a positive credit history. Consumers who qualify for lower interest rates than they're currently paying on credit card balances could benefit from consolidating high-interest debts with a loan.
If you're carrying thousands of dollars in credit card debt, taking out a personal loan big enough to consolidate and pay off debts could be an effective solution, along with other debt relief options.
Debt consolidation loans are personal loans used to cover the entire balance on one or multiple credit cards. Once you get approved for the loan, you'll get a lump sum of money you can then use to pay off each account in full.
Using a debt consolidation calculator can help you determine if this is the right option for your financial goals.
Did You Know?
Even if you pay off a credit card in full, avoid closing the account, as this can negatively impact your credit.
When Is a Consolidation Loan the Right Move for Credit Card Debt?
Taking out a debt consolidation loan may be a good idea if you:
- Qualify for an unsecured loan at a lower interest rate than your current accounts
- Pay high interest rates on multiple credit card balances
- Need help organizing multiple monthly payments
- Put 50% or more of your monthly income toward credit card debts
- Can afford to put money toward a monthly loan payment
Struggling with high amounts of credit card debt, falling behind on payments, or carrying a low credit score are also indicators that debt relief is an important process to consider. While debt consolidation is one option, other solutions include:
- Debt Settlement Program
- Debt Management Plan
- Credit Counseling
- Debt Snowball Method
- Debt Avalanche Method
Don't give in to adding new high balances to your credit card once it's paid off!
Weighing the Pros and Cons of Debt Consolidation for Credit Cards
Consolidating credit card debt comes with some benefits, but also many drawbacks. Consider the following before choosing this debt relief solution:
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Debt Consolidation Loans and Bad Credit
Consumers with bad credit and a negative credit history often find it difficult to qualify for a consolidation loan. While some online banks offer loans to those with a score below 630, you'll need to secure a low enough interest rate to make a debt consolidation loan worth it.
What’s the Difference Between Debt Consolidation and Debt Settlement?
Consumers with high-interest credit card debt can benefit from several debt relief options, including settlement. If you can make monthly payments toward a debt consolidation loan, you may want to consider debt settlement as an alternative, especially if you have a low credit score and high credit utilization.
While the goal of consolidation is to lower interest rates and merge multiple payments into a single bill each month, debt settlement reduces the total amount you owe to credit card companies through negotiations with creditors.
For a full side-by-side, see our debt settlement vs. consolidation comparison.
Can You Use a Balance Transfer To Consolidate Credit Card Debt?
Yes, you can use a credit card balance transfer to consolidate your credit card debt. If you qualify, you can move existing debt to a new balance transfer credit card with zero or low interest for an introductory period.
This option works best for small debts since most balance transfer credit cards only offer a zero or low annual percentage rate (APR) for up to 18 months. If you fail to pay off the entire balance during this window, you'll likely face fees and interest well above 20% on anything remaining in your account.
Credit card balances of $10,000 or more require a plan and dedicated monthly payments to effectively clear debt. That's why options like debt consolidation loans and debt settlement are often a better choice for credit card debt relief.
Find the Best Solution To Credit Card Debt
Racking up thousands of dollars in credit card debt happens, but the solution isn't to ignore it. Missed and late payments can tack on hundreds of dollars in fees and interest per month, making it harder to get out of debt.
Instead, finding a solution like consolidation or debt settlement can help you overcome thousands in unsecured debts. Carefully weigh your options to decide if taking out a loan to consolidate and pay off credit card debt is the best choice.
Partner with TurboDebt® for Relief from Credit Card Debt
If you're ready to get serious about paying off credit card debt, TurboDebt® is here to help. Our dedicated team has already assisted hundreds of thousands of consumers in overcoming huge unpaid balances, providing the support they need to get to the finish line.
My TurboDebt Rep was so friendly and professional. He explained the complete debt relief process. He eased my worries too about getting the negative effects on my credit score. And in the expected time frame, my score should be even higher. Thanks TurboDebt!
TurboDebt representative names are omitted for privacy. All other wording appears as submitted.
Here are the top reasons consumers partner with us for effective debt relief:
- Affordable monthly payments
- No late fees
- Customized debt relief programs
- Quality customer service
- No new loans or lines of credit needed
- Help for consumers with low credit
- Thousands of 5-star TurboDebt reviews
Don't wait for your credit card balances to grow. Get started today with a free consultation with one of our expert team members. It only takes a few minutes to find out if you qualify for effective debt relief from TurboDebt!