To address high-interest debt, you might consider transferring credit card balances to a new card with a lower interest rate. Zero percent introductory APRs are tempting, but they’re not your only (or even your best) option for consolidating debt. Personal loans for credit card debt—sometimes called debt consolidation loans—are another way to move credit card balances and tackle debt.

Both solutions have the potential to save you money on interest along the way, but they each have unique features to consider. It’s important to understand their differences, so you can choose the right path for you.

Key Considerations

You can refinance credit card balances using a debt consolidation loan to help pay down debt or use a balance transfer credit card to save money on interest.
If you have a significant amount of high-interest debt, personal loans can be an effective alternative to balance transfer credit cards.
Balance transfers are generally better for smaller debts that you can pay off quickly within the promotional period; however, you’ll likely pay balance transfer fees.

What does it mean to move a credit card balance?

Moving a credit card balance, most commonly referred to as a balance transfer, involves transferring the outstanding debt from one credit card to another. A balance transfer can save you money by moving your debt from a high-interest credit card to one with a lower interest rate, ideally with a 0% introductory annual percentage rate (APR).

A balance transfer may make it easier to pay off debt, as long as it's done within the duration of the promotional period when no interest is being charged on the balance. You might consider moving your balances if you’re struggling to reduce your debt because most of your payments are going toward the interest instead of the principal balance.

How does a personal loan compare to a credit card balance transfer?

While personal loans and balance transfer credit cards can help you consolidate credit card debt, they work in different ways and come with their own unique features.

Generally, balance transfers are better for smaller debts that you can pay off quickly within the promotional period, so you can avoid a high variable interest rate thereafter. Personal loans tend to have higher loan limits than balance transfer cards, making them a good option for consolidating larger debts that may take longer to pay off.

SOURCE: Forbes
	Personal loans	Balance transfers
Fees	May have an origination fee between 1% and 8%	May have a transfer fee between 3% and 5%
Interest rate	Fixed APRs typically fall between 6.99% and 35.99%	Starts with low intro APR (usually 0%); High variable APR after the intro period (usually 12 to 18 months)
Amount	Most loan amounts range from $1,000 to $100,000	Typical credit limits range from $500 to $15,000+

Tip: BHG Financial offers loan amounts up to $250,000¹, above the industry average for personal loans.

Why consider debt consolidation with a personal loan? 

Choosing the right solution for credit card debt consolidation depends on your financial situation, credit score, and amount of debt. The intro APRs on balance transfers can be tempting initially, but the rate that follows could be higher than the original. Interest rates on personal loans are fixed, providing you with a more stable and predictable path to becoming debt-free.

Advantages of consolidating debt with a personal loan:

Predictable payments: Personal loans come with fixed interest rates and set repayment terms. This means that your monthly payment will stay the same throughout the life of the loan, making it easier to budget and plan your finances.
Higher loan amounts: If you have a significant amount of credit card debt, personal loans tend to offer larger loans than balance transfer cards. Some lenders have loan amounts up to $100,000, but BHG Financial offers personal loans up to $250,000.¹
Potential to save on overall interest: Personal loans for debt consolidation tend to have lower rates than credit cards. The lower, fixed rate can save you money on interest over the long term.

Drawbacks of consolidating debt with a personal loan:

Lowest rates awarded to prime credit borrowers: You’ll generally need a “good” or “excellent” credit score to qualify for the best rates. Not all lenders are willing to work with people with bad credit. Some specialty lenders will approve higher-risk borrowers, but the rates will likely be higher.
There may be upfront fees: You may have to pay an origination fee, which is usually subtracted from the total amount borrowed. However, you should weigh this against the potential long-term interest savings compared to other consolidation options.

How to consolidate your credit card debt using a personal loan

If you decide to consolidate your credit card debt by getting a personal loan, you’ll first need to get approved for the loan, then use the funds to pay off your existing credit card balances. Here’s how to do it:

Assess your debt: Make a list of all your credit card debts, including the balances and interest rates for each. This will help you determine the amount you need to borrow.
Check your credit score: Knowing your credit score will give you an idea of the interest rates you might qualify for. This will also help you narrow down a list of lenders based on their minimum credit score requirements.
Compare lenders: Most online lenders, including BHG Financial, allow you to prequalify for a loan, so you can compare offers without impacting your credit score.² Look at the interest rates, fees (like origination fees), repayment terms, and loan amounts available.
Apply for the loan: Once you’ve found a lender with terms that work for you, you’ll need to complete a formal application. This involves submitting information about your income, employment, and other financial details.
Receive the funds and pay off credit cards: If approved, you’ll receive the funds in a lump sum, which you will use to pay off your existing credit card balances. Some lenders will pay the creditors directly.
Make fixed monthly payments: Once your credit cards are paid off, you’ll start making fixed monthly payments on your loan according to the agreed-upon terms.

What to expect with a BHG Financial personal loan

With a BHG Financial personal loan for debt consolidation, you can manage credit card and other debts. BHG offers personal loans up to $250,000¹ with no collateral required and fixed, affordable payments with terms up to 10 years.^1,3

These loans typically carry low interest rates and have longer repayment terms,¹ which helps keep your monthly payments low. How you decide to leverage the extra breathing room in your budget is up to you. For example, you might use it to build an emergency fund or pay more than the monthly minimums and pay off your debt faster.

Plus, BHG allows you to prequalify using a soft credit inquiry. This means that you can check your rate without impacting your credit score.² Apply online in just seconds.

Move credit card balance FAQ

Can I consolidate multiple credit cards into one personal loan?

Yes, one of the benefits of using a personal loan for credit card debt is the ability to consolidate multiple high-interest balances into a single loan with one fixed monthly payment. This simplifies your finances and makes it easier to track your progress toward becoming debt-free.

What credit score do I need for a debt consolidation loan?

Credit score requirements for a debt consolidation loan vary by lender, but you’ll generally need good credit (670 and above) to qualify for the most competitive interest rates. Not all lenders are willing to work with borrowers with bad credit. Some specialty lenders will take on higher-risk borrowers, but your interest rate may be higher.

Does consolidating credit card debt improve my credit score?

Yes, debt consolidation can improve your credit score over time, but the results will not be immediate. Your score may drop initially due to the hard inquiry required to qualify for a new loan. However, your credit score is likely to improve as you make on-time payments and reduce your overall credit utilization ratio. Avoiding new debt is crucial for this improvement.

How much does it cost to transfer a balance from one credit card to another?

The cost to transfer a balance from one credit card to another typically involves a balance transfer fee. This fee is usually a percentage of the amount you’re transferring, often ranging from 3% to 5%. This fee could be significant for larger figures. If your credit card debt is significant, you may want to consider other options for consolidating debt, like a personal loan.

Are there fees for moving my balance with a personal loan?

Some lenders may charge a one-time origination fee for a personal loan. Origination fees typically range from 1% to 8% of the loan amount. It’s important to compare the total cost of the loan, including any fees and the interest rate, when choosing your lender.

How BHG can help you pay off credit card debt 

At BHG Financial, we believe financing should fit seamlessly into your life and goals. That’s why we offer personal loans tailored to your needs, with amounts up to $250,000¹ and flexible terms of up to 10 years.^1,3 Consolidate your high-interest debt with a BHG loan designed to help you move forward confidently. 

Plus, you’ll enjoy dedicated, U.S.-based concierge service that works around your schedule—because your time is valuable. Ready to see what’s possible? Use our quick and easy payment estimator to get your personalized loan estimate in just seconds.

Not all solutions, loan amounts, rates or terms are available in all states.

¹ Terms subject to credit approval upon completion of an application. Loan sizes, interest rates, and loan terms vary based on the applicant's credit profile.

² There is no impact on your credit for applying. For personal loans, a complete credit history, which will appear as an inquiry on your credit report, will be performed upon acceptance and funding of the loan and may impact your credit.

³ Personal Loan Repayment Example: A $59,755 personal loan with a 7-year term and an APR of 17.2% would require 84 monthly payments of $1,228.  

Consumer loans funded by Pinnacle Bank, a Tennessee bank or County Bank. Equal Housing Lenders.

For California Residents: BHG Financial loans made or arranged pursuant to California Financing Law license - Number 603G493.

IMPORTANT INFORMATION ABOUT ESTABLISHING A NEW CUSTOMER RELATIONSHIP

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies every customer. What this means for you: When you apply for a loan, we will ask for your name, address, date of birth, social security number and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents. If all required documentation is not provided, we may be unable to establish a customer relationship with you.