Credit Card Debt? These 4 Sites Could Help You Pay It Down Faster
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So, you have thousands of dollars in credit card debt, and the burden of paying off all that — and interest — is gobbling up your income.
Instead of financially treading water making minimum payments and paying maximum interest, make the smart move, and take out a debt consolidation loan. It’s a personal loan, usually at a lower interest rate that you can use to pay off your high-interest credit cards.
In the long term, you can save a ton of money, but first you have to shop around for a loan.
Sound difficult? It doesn’t have to be. Instead of spending hours scouring the internet, you can go window-shopping at an online marketplace that’ll help pinpoint the best loan for you.
We recommend you try more than one site and see what kind of results you get. Heck, try them all if you want. It won’t take long, and you have nothing to lose: Seeing your options won’t cost you anything, and it won’t hurt your credit score.
4 Marketplaces for a Credit Card Debt Consolidation Loan
To start, you’ll need to know your credit score, but that’s super easy. Just sign up for Credit Sesame, a free credit-monitoring service that helps you keep track of your credit. It’ll immediately show you your credit score, and it’ll offer you personalized tips to better manage your credit.
Here are four different options for places to find a loan online. At the end of this article, you’ll find a chart comparing them at a glance.
Credible is a one-stop shopping place where you can compare rates side-by-side from multiple lenders who are competing against each other for your business.
It allows you to compare quotes from seven different lenders: Avant, Best Egg, Freedomplus, Lending Club, Payoff, Prosper and Upstart.
Through Credible, you can borrow $1,000 to $50,000 with a loan term of two to five years, at interest rates ranging from 4.99% to 35.99%. The interest rates you’re offered will depend on your individual credit profile.
Credible is best for borrowers who have good credit scores and just want to consolidate their debt. It requires you to have a credit score of at least 680.
Compared to Credible, Fiona allows you to borrow more money and borrow it for a longer period of time — if that’s what you want to do.
You can borrow up to $100,000 and spend up to seven years paying it back. That’s more money and time than you can get from any of these other three lending marketplaces.
Fiona’s lending partners include Avant, Best Egg, Freedomplus, Lending Club, LendingPoint, LightStream, Payoff, Prosper, SoFi and Upgrade.
You’ll need a credit score of at least 620. Interest rates range from 4.99% to 35.99%.
Lendvious is the newest of these four online loan websites.
Depending on your credit score and how much you want to borrow, you’ll immediately get offers from up to 10 lenders. You can borrow up to $50,000 with no collateral required.
Different lenders are looking for minimum credit scores ranging from 560 to 650. The company’s lending partners include Avant, Best Egg, Freedomplus, LendingPoint, Lending Club, Marcus, OneMain Financial, Prosper and Upgrade.
Interest rates range from 4.99% to 35.99%.
If your credit isn’t great, Lendvious might be your best option.
Unlike those others, Upstart is a lending platform that manages the process from pre-approval through servicing your loan.
Founded by ex-Googlers, Upstart is a lending platform that’s striving to change the personal loan game. Rather than solely focusing on your credit score to determine your borrowing power, it looks at other factors, too, including your education and employment history.
Upstart tends to be especially helpful for recent grads, who have a short credit history and a mound of debt.
Many lenders judge consumers based only on their credit history. But Upstart believes this leaves out an entire segment of the population — even though they’re totally qualified.
When it comes to the length of the loan, Upstart offers three options: three, five or seven years. The company says its average three-year loan has a 16% interest rate*, with 36 monthly payments of $35 per $1,000 borrowed.
Comparing Your Options One More Time
Seeing your quotes from each of these platforms takes 5 minutes, tops, so you can easily try out more than one. Each conducts a soft inquiry on your credit, meaning it won’t affect your credit score at all.
Once you actually apply for a loan, the lender will perform a hard inquiry on your credit, which will ding your credit temporarily.
Here’s the chart we promised you:
|Interest rate||4.99% to 35.99%||4.99% to 35.99%||4.99% to 35.99%||8.92% to 29.99%|
|Term||Two to five years||Two to seven years||One to five years||Three or five years|
|Loan amount||$1,000 to $50,000||$1,000 to $100,000||$1,000 to $50,000||$1,000 to $50, 000|
|Minimum credit score||680||580||560||620|
*The average three-year loan offered across all lenders using the Upstart Platform will have an APR of 20% and 36 monthly payments of $35 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on three-year rates offered in the last one month. Your APR will be determined based on your credit, income and certain other information provided in your loan application. Not all applicants will be approved.
All loans are made by Cross River Bank, an FDIC insured New Jersey state chartered commercial bank, equal housing lender.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He knows a lot about credit card debt from personal experience.
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