Customized financing to consolidate high-interest debt or fund major purchases or expenses.

WAYS TO USE YOUR LOAN

Debt consolidation

Tailored commercial financing that supports all your business needs to help you grow quickly. 

Tailored for entrepreneurs that want to establish additional active and passive income streams.

Tailored for entrepreneurs that want to establish additional active and passive income streams.

 

 

 

Customized financing to consolidate high-interest debt or fund major purchases or expenses.

July 18, 2024

How to Consolidate Personal Credit Card Debt

Which business loan is right for you

Navigating the complexities of credit card debt can feel overwhelming, to put it lightly. If you, like half of all Americans,* have at least two credit cards, remembering the amount owed every month and watching interest accrue for each card may cause unnecessary stress. As is the case with most financial goal setting, you'll want to develop a plan for paying off your debts efficiently.

Some choose to bundle their debt into one simple and more affordable monthly payment using a debt consolidation personal loan, while others leverage equity in their home, and even more take out a new credit card for a balance transfer. Whether you want to mitigate the stress and burden of high-interest credit card debt by taking out a personal loan or pursuing another ef-fective strategy for paying off credit card debt, begin with a bird's eye view of your finances to figure out which solution works best for you.



Key considerations
 

  • Evaluate your outstanding debt balances, monthly income, and expenses. Understanding your financial standing provides a solid foundation for determining the most suitable consoli-dation strategy.
  • Familiarize yourself with credit card debt consolidation options. Personal loans, home equity lines of credit (HELOC), balance transfers, and more can all be leveraged advantageously.
  • Don't hesitate to seek professional financial guidance. Financial advisors or credit counselors can offer personalized insights tailored to your specific circumstances to set you on the path to financial control and security.
     

When to consider personal debt consolidation

Debt consolidation becomes a viable option under various circumstances. If you find yourself juggling multiple high-interest credit card balances, struggling to keep up with monthly pay-ments, or want a more streamlined approach to debt management, consolidation may be a so-lution worth pursuing.

Consolidating personal debt simplifies your financial life by combining multiple debts into a single monthly payment. Many who choose to bundle debts receive lower, fixed interest rates, which may save you from spending more on interest payments. By bundling your debts, you can regain control of your finances and more quickly work towards a debt-free future.

 

The most effective ways to consolidate personal credit card debt

Regardless of your age, income, demographic information, and many other factors, different strategies will have diverse impacts on varying lifestyles. For example, while high-income households are more unlikely to have any credit card debt, they do usually average out to hav-ing higher debt amounts when they do.*

Each of the following techniques is an effective form of consolidating personal credit card debt, but only by understanding your personal finances will you know which is the most ap-propriate for you.
  


Apply for a personal loan

A personal loan offers the most straightforward and accessible approach to consolidating credit card debt. Available through banks, credit unions, or online lenders, personal loans usu-ally feature fixed interest rates and fixed repayment terms. By securing a personal loan, you can pay off your credit card balances and focus on repaying a single loan with consistent, manageable monthly payments.


Take out a line of credit

A home equity line of credit (HELOC) taps into the equity you've put into your home to pro-vide you with a continued return on investment for your home ownership. With a HELOC, you can access funds as needed, giving you a degree of flexibility for withdrawing funds when you need them—and especially if you choose to use this option for consolidating personal credit card debt. Also, HELOCs often offer lower interest rates than credit cards, potentially reducing overall interest costs over time.

Perform a balance transfer

Many credit card issuers entice customers with promotional balance transfer offers, featuring low or 0% interest rates for a specified period. By transferring high-interest balances to a new card, you can take advantage of these introductory rates and save on interest charges. How-ever, it's essential to consider any balance transfer fees and the duration of the promotional pe-riod when evaluating this option, and you'll probably want to make sure you pay off the en-tirety of your debts before the promotional annual percentage rates (APRs) expire.

 

Leverage a home equity loan

Homeowners may opt to leverage their home equity through a home equity loan to consolidate personal credit card debt. Unlike a HELOC, which provides a revolving line of credit, a home equity loan offers a lump sum with a fixed interest rate and fixed repayment term. Using your home as collateral can help you secure a lower interest rate than many credit cards, potentially reducing your overall interest expenses.


Pursue debt settlement services

Finding a debt settlement firm you won't regret using later can be a tumultuous experience for your personal finances.** That said, negotiating with creditors to settle debts for less than the full amount owed can provide relief from overwhelming debt burdens when you understand the potential consequences. Not all creditors are willing to negotiate, though, and seeking debt settlement services will likely have a negative impact on your credit score. Intimately under-standing your personal finances in the short-term and for the long term is crucial to your future financial health.

 

How BHG Financial can help you consolidate credit card debt

With highly specialized financing options for accomplished professionals, BHG Financial offers personal loans up to $200,000 to use as you need them. With repayment terms that last up to 10 years, you can fully bring your financial plan to action by consolidating your debts into a simple and affordable monthly payment to help you achieve financial peace of mind sooner rather than later. 

Our payment estimator can help you see your personalized estimate in about 30 seconds, and our dedicated concierge service team can serve your needs every step of the way.

 

 

Consolidating credit card debt FAQs

 

What are the benefits of consolidating credit card debt?

Consolidating credit card debt can simplify your finances by combining multiple debts into a single monthly payment with more manageable interest rates. In the long run, this can save you from spending more money than you anticipated or previously agreed to on interest payments in the future.

 

How does debt consolidation affect your credit score?

Debt consolidation can impact your credit score differently depending on the method chosen. For example, applying for a new loan or credit card for consolidation may result in a temporary dip in your credit score due to inquiries, changes in credit utilization, and your history using credit-based financial products. However, making timely payments on the consolidated debt can positively affect your credit score by demonstrating responsible financial management.2  

 

Can I consolidate other types of debt besides credit cards?

Yes, debt consolidation can be applied to various types of debt, including personal loans, medical bills, and student loans, in addition to credit card debt. Consolidating multiple debts into a single payment can streamline your repayment process and make it easier to manage your finances overall.

 

 

 

Consolidating personal credit card debt FAQs

Consolidating personal credit card debt can simplify your finances by combining multiple debts into a single monthly payment with more manageable interest rates. In the long run, this can save you from spending more money than you anticipated or previously agreed to on in-terest payments in the future.

Personal debt consolidation can impact your credit score differently depending on the method chosen. For example, applying for a new loan or credit card for consolidation may result in a temporary dip in your credit score due to inquiries, changes in credit utilization, and your his-tory using credit-based financial products. However, making timely payments on the consoli-dated debt can positively affect your credit score by demonstrating responsible financial man-agement.**

Yes, personal debt consolidation can be applied to various types of debt, including personal loans, medical bills, and student loans, in addition to credit card debt. Consolidating multiple debts into a single payment can streamline your repayment process and make it easier to man-age your finances overall.

With highly specialized financing options for accomplished professionals, BHG Financial offers personal loans up to $200K1 to use as you need them. With repayment terms that last up to 10 years,1,2 you can fully bring your financial plan to action by consolidating your personal debts into a simple and affordable monthly payment to help you achieve financial peace of mind sooner rather than later.

Our payment estimator can help you see your personalized estimate quickly, and our dedicated concierge service team can serve your needs every step of the way.

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. Finance amount may vary depending on the ap-plicant's state of residence.

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

Annual percentage rates (APRs) for BHG Financial personal loans range from 11.96% to 25.31%, with terms from 3 to 10 years. 

No application fees, commitment, or impact on personal credit to estimate your payment.

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 a California Financing Law license - Number 603G493.

* "Credit Card Statistics And Trends 2024." Forbes, https://www.forbes.com/advisor/credit-cards/credit-card-statistics/#sources_section. Accessed May 23, 2024

** "How to Get Out of Credit Card Debt Without Paying Everything You Owe." National Foundation for Credit Counseling, https://www.nfcc.org/blog/how-to-get-out-of-credit-card-debt-without-paying-everything-you-owe/. Accessed May 23, 2024