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Debt Consolidation

How Consolidating Debt Can Free Up Cash for Bigger Goals

Written by Lauren Hamer, CFEI®
Senior Content Writer
November 6, 2025 | 6 min read
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If you’re a successful professional with high-interest credit card debt, hitting your financial milestones can feel harder than it should. Debt can stand in the way of retiring early, funding your child’s education, renovating your home, and/or traveling the world.

Here’s the good news: debt consolidation for high earners offers a way to simplify repayment, free up cash flow, and redirect your income toward what matters most. By using a personal loan for goals instead of watching money vanish into compounding interest, you create financial breathing room and a clear path forward.

Let’s dive deeper into the hidden cost of high-interest debt for six-figure earners and why debt consolidation can be a powerful tool for overcoming it.

 

Why income alone doesn’t guarantee financial flexibility

While earning six figures is a significant accomplishment, it doesn’t mean you’re immune to financial hurdles. In fact, Consumer Financial Protection Bureau’s Economic Well-Being report reveals that 12.1% of households with incomes above $125,000 struggled to pay bills in the last year.

So, what’s the reasoning behind this? Unexpected expenses, higher taxes, inflation, and the rising cost of living can all cause you to accumulate debt.

Additionally, you may have volatile or uneven income. Bonuses, commissions, stock or equity grants may come in or vest only once or a couple of times a year. So, while income may be high, the week-to-week or month-to-month liquidity can be strained, which can necessitate the use of credit cards or other consumer debt vehicles to pay expenses.

 

Interest and minimum payments drain progress

When you’re carrying balances on credit cards, high APRs can quietly drain your income. Many cards charge 18% to 25% interest—or more. If you’re only making minimum payments, compounding interest can stall your momentum. Instead of reducing what you owe, much of your payment goes toward servicing interest charges.

Over time, this cycle forces you to allocate money that could otherwise be directed toward building wealth or increase your savings rate.

What debt consolidation can do for your cash flow

Debt consolidation can have a positive effect on your monthly cash flow, freeing up your funds for the money moves that are important to you.

 

Lower monthly payments with a fixed rate

By consolidating multiple debts into one fixed-rate personal loan, you reduce the number of payments you need to make each month. This strategy helps simplify your finances and save on interest over time. By stretching repayment over a longer term, you can often lower the amount you owe monthly, giving you more breathing room in your budget.

 

Less interest = more liquidity

The less you spend on interest, the more funds you’ll have at your disposal. For example, let’s say you’re carrying $50,000 across several credit cards at 18% to 25% APR. By consolidating into a fixed-rate personal loan at a much lower rate, you could save hundreds per month and thousands of dollars in interest over the life of the loan.

Discover how much you could save

 

Freeing up cash flow for wealth-building moves

Imagine what you can do with the additional cash flow you gain through debt consolidation. You can boost your emergency fund, maximize your 401(k) contributions, and/or expand your real estate portfolio. All these strategies may improve your long-term wealth.

Why high earners choose BHG’s personal loan for debt consolidation

While there are many debt consolidation loans on the market, BHG Financial’s personal loan for debt consolidation stands out. Here’s why:

 

Tailored for professionals with strong credit

Our debt consolidation loans are specifically designed for professionals with strong credit and professional stability. We understand that you may have a more complex financial situation with unique needs. Our team of U.S.-based loan experts can help you choose a financing solution that aligns with your circumstances and financial goals.

 

Larger loan amounts and longer terms

High earners often carry higher balances. Where other lenders cap borrowing amounts to $50,000 or $100,000, BHG offers loans up to $250,0001 with terms up to 10 years.1,2 This is ideal if you’d like to consolidate large debt balances without putting strain on your monthly budget.

 

Speed and privacy matter to high performers

BHG Financial understands that you lead a busy life, in and out of the office. That’s why we allow you to prequalify online using our secure systems without impacting your credit score.3

If you decide to formally apply, you may get approved in as few as 24 hours and receive funding in as little as five days.4

Turning cash flow into opportunity

 

Reallocating money toward bigger ambitions

Freeing up cash isn’t just about day-to-day comfort—it’s about creating the capacity to fund bigger life moves. Whether you want to build long-term wealth, pursue an entrepreneurial venture, cover your child’s college, retire early, or anything in between, debt consolidation can help you get there.

 

Using momentum to build net worth

Paying off debt strategically can also boost your credit score by lowering utilization and strengthening your payment history. What’s more, better credit may unlock better borrowing options in the future.

 

A smarter way to grow, not just a way out of debt

High earners are increasingly using consolidation as a solution to get ahead rather than “catch up.” Not only can you leverage it to pay off high-interest debt, you can restructure your finances in a way that helps you manage money and position yourself for growth.

Is debt consolidation right for you? 

Just like any other financial tool, you should consider debt consolidation carefully. Before you move forward with this strategy, make sure you’re a good candidate for it.

 

Questions to ask before you consolidate

If you answer “yes” to any or all these questions, debt consolidation may be right for you:

  • Do you have multiple high-interest debts with APRs greater than 20%?
  • Do you have a “good” or “excellent” credit score?
  • Are monthly payments limiting your ability to invest or save?
  • Would one lower, fixed payment reduce stress and create more breathing room?
  • Are you looking for a streamlined, structured approach to paying off debt?
  • Are you ready to take control of your spending habits?

 

When BHG’s loan makes the most sense

A BHG debt consolidation loan can be a smart move if you’re juggling significant high-rate debt from credit cards and other loans, and want a structured, predictable way to pay it off. BHG’s personal loans for debt consolidation have flexible terms that help create financial flexibility and improve liquidity.

Final thoughts: Free up cash, fund what matters most

Consolidating debt as a high earner isn’t about cutting back—it’s about positioning your finances for growth. Leverage it to build a stable financial foundation that allows you to enjoy your current lifestyle while working towards the future of your dreams. 

Ready to make your income work harder for you? See what you qualify for with a BHG personal loan—no impact to your credit score.3

* Potential savings based off comparing repayment of a $50,000 balance over 7 years on both a credit card with a minimum monthly payment of $1,233 and APR of 23.99% (average consumer credit card APR per Investopedia as of 8/05/25), with the assumption no additional draws on the line are made during this time; and a BHG Personal Loan with a minimum monthly payment of $894 and minimum available APR for a 7-year term, which is 12.44% as of 10/21/2025 and includes an origination fee.

 

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 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.

3  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.

4 This is not a guaranteed offer of credit and is subject to credit approval. 

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.

 

 

 

If you’re feeling weighed down by credit card debt, you’re not alone. High interest rates can feel like an uphill battle, making it easy to fall behind and tough to catch up. 

Understanding how to pay off credit card debt is the first step toward taking control of your debt and reclaiming your financial well-being. Here are a few practical strategies to eliminate credit card debt.

 

Key considerations

  • If you have a significant amount of high-interest debt and a good credit score, a debt consolidation loan can be a viable option for paying off credit card debt. For smaller debts, a balance transfer card could help you tackle debt faster.
  • If not consolidating or using a balance transfer card, set a goal and a budget for repayment; targeting one debt at a time using the snowball or avalanche method can help reduce your balances methodically.
  • Gradually exceed monthly minimum payments whenever possible to decrease your total interest over time. Even small extra payments can make a big difference in your credit card debt over the long term.

 

Why is credit card debt hard to pay off?

U.S. credit card balances have surpassed $1.21 trillion, according to the Federal Reserve, driven partially by high APRs.

Credit card debt is difficult to overcome. Even if you don’t make additional purchases, the interest compounds. Only paying the minimum each month means you will carry the debt from month to month, increasing your debt as you accumulate interest charges.

For example, if you’ve amassed $50,000 in credit card debt on a card with a 23% APR, you could pay up to $11,500 per year in interest. Without a plan in place to address the debt proactively, it can become a significant burden. 

To start, pay as much as you can toward the debt. Some common ways to do this effectively and consistently include using the debt snowball or debt avalanche method. 

 

What is the debt snowball method?

If you have balances on multiple cards, one of the best strategies to eliminate credit card debt is the snowball method. With the debt snowball method, you pay off the card with the smallest balance first before moving on to the next largest one.

This method is a good choice if you can’t afford to make large monthly payments but want to proactively chip away at your debt. Once you pay off a card, you'll redirect the funds you were using for that payment to your next card balance. You'll continue to do this until you’ve tackled each debt.

Here’s how it looks in action, using the following credit card balances as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the snowball method, you’d focus on the second card on this list first because it has the lowest balance ($2,000). Once cleared, you’d move on to the next highest card balance ($5,500) before addressing the third card with a $10,000 balance. 

Remember to make minimum payments on all other cards in the meantime; missing any minimum payment can hurt your credit score.

 

What is the debt avalanche method?

Attacking debt using the debt avalanche method involves paying off the account with the highest interest rate first, regardless of the balance. It can take a while to make progress on —especially if the balance on that card is excessive—but you’ll save money on interest in the long run. 

The avalanche method may be a better strategy for you if you can confidently afford a bigger payment and want to pay less in interest while you work to become debt-free. 

Here’s how debt avalanche looks in action, using the same credit card balances from above as an example:
 

  • Credit card 1: A $5,500 balance and an APR of 16%
  • Credit card 2: A $2,000 balance and an APR of 20%
  • Credit card 3: A $10,000 balance and an APR of 23%

 

Using the avalanche method, you’d tackle the third card first because it has the highest APR (23%). You’d focus on the second card next—APR of 20%—even though it has a lower balance, before moving on to the first card with the lowest APR. 

Again, it’s important to focus on making every payment on time to protect your credit score and avoid tacking on additional late fees. It can take a while to knock out the first debt, so patience and consistency is key.

 

How can debt consolidation help? 

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.

 

Debt consolidation involves combining multiple credit card debts into one new account or loan and using it to pay off your existing debts. In many cases, consolidation can save you money because the new product may come with a lower interest rate than the ones attached to your cards. Consolidating debt also simplifies the repayment process because you only need to manage one monthly payment.

Some of the most effective credit card consolidation strategies include using a debt consolidation loan or a balance transfer credit card. The best way to pay off credit card debt will depend on the amount of debt you have, your credit history, and your income level.

If you have a significant amount of high-interest debt and a respectable credit score, a lower-rate personal loan for debt consolidation can be a viable option. Debt consolidation loans, like the ones offered by BHG Financial, have flexible repayment terms1 that help keep your monthly payments low.

 

Do balance transfers help pay off debt faster?

Transferring your balance from one credit card to another can help you pay your debt faster, as long as the new card comes with a lower rate. If you transfer your balances to a new card with a lower APR, you can allocate a greater portion of your future payments to paying down the principal instead of the interest.

That said, there are a few things to know about the timing of balance transfer credit cards:

  • You can apply for a balance transfer card in a matter of minutes, but the actual transfer can take anywhere from a few days to several weeks, depending on the credit card company. During that time, you’ll still have to make any payments you owe to your original card company.
  • Make sure you understand how long the introductory rate lasts, whether there’s a transfer fee, and what the regular rate will be after the promotional period. Introductory rates typically run for a period of six to 18 months, and if you can’t pay off your balance in full, the new rate may be higher than the rate on your old card. 

If you worry it may take longer than the intro period to pay off your debt, consider transferring your balance to a debt consolidation loan. BHG offers fixed, affordable payments with terms up to 10 years.1,2 Plus, dedicated loan specialists provide a concierge loan experience, guiding you through the loan process. 

 

 

Balance transfer vs personal loan chart


Source: Bankrate, Investopedia - Accessed on 3/14/25
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.

 

How to pay off credit card debt FAQ

 

Should I pay off my credit card debt or save first?

It usually makes sense to pay off your debts before saving money, especially if you have high-interest debt. This is because the high interest rates on your accounts will often cost more than the money you can save. For this reason, any money you can afford to save is better allocated to paying off your high-interest debt so that it doesn’t continue to compound. 

 

How can negotiating with creditors reduce my debt?

If card issuers are willing to consider negotiating your credit card debt, you may be able to set up a payment plan, pay off the cards for less than what you owe, or agree to a forbearance. However, there are definite drawbacks to negotiation, as these solutions negatively impact your credit score.

 

Can I pay off credit card debt without hurting my credit score?

Absolutely! Any moves you make to pay your monthly balances on time can help build a solid payment history and, in turn, improve your credit score. Plus, reducing your credit card balances will lower your credit utilization ratio.

 

Are debt relief programs worth it?

Debt relief (debt settlement) programs offered by for-profit companies should be viewed as a last resort, and only after you’ve exhausted options for consolidation. Debt relief companies can fast-track getting out of debt, but they often charge high upfront fees, and the process could hurt your credit score. Watch for scams and make sure you understand the potential fees before handing over your finances to a debt relief company.

 

What if I can't afford minimum payments?

Many creditors are willing to work with you if you cannot afford to pay the monthly minimum payment. Call the company as soon as possible to see what you can work out. If getting a debt consolidation loan isn’t an option for securing a lower minimum payment, you can contact a credit counseling agency, which will help you organize a debt management plan to pay down your debts. Debt relief programs could be considered as a last resort, as they come with drawbacks and can charge exorbitant upfront fees.

 

How BHG can help you pay off debt faster

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 $200,0001 and flexible terms of up to 10 years.1,2 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.