What is the Best Consolidation Loan for Credit Card Debt?


Dear Steve,

What is the best loan consolidation company for $15k of credit card debt?



Dear Danielle,

Great question. Tough answer. It is a bit like asking what the best dessert is. It depends on many factors.

People use the term “consolidation” in different ways. Sometimes people use it to talk about a regular consumer loan. They also use it to describe credit counseling or a quasi-consolidation in a debt settlement program.

Personal Loan

Finding an actual loan to pay off credit card debt is just an exercise in shopping around and asking about rates. You don’t want to apply everywhere because that can lower your credit score.

But you can have an idea what your credit score is by getting a free copy of your credit bureau reports at AnnualCreditReport.com.

You’ll want to ask what the rate is for someone with your approximate credit score. Then, after the interest rate, you want to know about any fees they might charge.

What you are trying to figure out is the cost of the loan.

You have to be careful; companies out there promise a personal loan to consolidate credit card debt and then say you are denied and try to sell you a different debt relief product.

It sure feels like bait-and-switch.

Credit Counseling

Sometimes people refer to a credit counseling Debt Management Plan as consolidation since they make one payment to the counseling company. The credit counselor chops that one payment up into individual creditor payments.

A credit counseling program can reduce your interest rates but don’t be surprised if the monthly payment is similar.

Debt Settlement

A debt settlement program can feel like a consolidation because people make one payment to the settlement company. However, the payment is arbitrary, and just going into an account, the settlement company might be taking fees, leaving you with less than you expect.

A general look at different debt relief options is below.

debt calculator

I would suggest a good solution is to talk through your situation with a debt coach like my friend Damon Day. Talking about your specific situation and the financial goals you’d like to achieve can get you close to the perfect solution.


You are not alone. I’m here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don’t give up.

Damon Day - Pro Debt Coach