The fact that you have a credit score above 700 is great news. You’ve worked hard to establish a good credit score, and that means you have paid your bills on time in the past. Maybe you’ve had a mortgage or a car loan, too, with payments that you’ve successfully kept. Our strategy here will be using a trick called loan consolidation to decrease your interest rates.

What’s Loan Consolidation?

So what is loan consolidation anyway?  It means taking your outstanding debt and moving it from the current lender to a new one who can offer you a cheaper interest rate.  Why do this?  You pay less each month on interest, and that saves you money.  Consolidation could happen with just one chunk of debt, like a credit card, or it could be a bunch of different types of debt like a credit card, car payment, and student loan.

For people with credit scores above 680, there are two primary ways to consolidate: balance transfer credit cards and personal loans.  We’ll show you the top providers for each.  Let’s walk through each of these and get you back on your way to a solid financial future.

Balance Transfer credit cards

A balance transfer credit card is a credit card that allows you to transfer the balance of some other debt over and to pay a lower interest rate.  Typically, there is an introductory 0% interest rate where you pay nothing for the first 12 months.  However, you have to be aware that there is usually a one-time balance transfer fee.  When taking out a balance transfer card, approach it with the goal of paying all the debt off within the 12 month introductory period.  This is difficult, but it’s often necessary to offset the cost of the 3-5% transfer fee.

For instance, if you transfer $5,500 in credit card debt to a new balance transfer card and have a 3% transfer fee, you pay $165.  No one likes fees, but this fee is less than you would have paid in interest for the next 12 months.  So paying the fee is worthwhile and the smart move in this instance.

A balance transfer credit card will be best for individuals with:

• Less than $10,000 in debt – It’s difficult to get approved for more than this amount, so if you’re debt is more, you should consider the unsecured personal loans below

• The possibility of paying the debt within the 12 month introductory period –  You are almost guaranteed to save money if you pay off the loan during the 0% introductory period.  However, if you still have a large balance at the end of that period, you’ll begin paying whatever interest rate your new card charges.  This might be no better than your current rate.
• If you’re considering a mortgage or refi within the next 12 months –  Opening up a balance transfer card or any credit card will increase your credit utilization, which is the amount of credit you are using divided by the amount you are approved to use.  This can temporarily lower your credit score, which you do not want if applying for a mortgage.

Top 0% Intro APR Balance Transfer Cards:

Wells Fargo Platinum Visa Card

This card gives you a full 18 months to pay off of 0% interest.  This extra time is hugely valuable in helping to reduce your debt.

• 0% APR offer for 18 months
• Get up to $600 protection on your cell phone
• No annual fee

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Discover IT Card – Cashback Match

This card gives you a full 18 months to pay off of 0% interest, and you also earn 5% cash back on purchases.   

• 0% APR offer for 18 months
• 5% cash back on purchases
• No annual fee
• Budgeting tools from Discover

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Do you want to see more options?  Browse all of our highly rated balance transfer credit cards and find the right one for you.

Personal Loan Debt Consolidation

A personal loan balance transfer means transferring your current debt (which could be from a credit card or other personal loans) onto a new loan at a lower interest rate.  You will not receive the 0% APR offer of a balance transfer credit card, but you will receive a higher transfer amount.  Some personal loan companies offer loans of up to $50,000.   Generally, there is also an origination fee on a personal loan which is about 3%.

A personal loan will be an ideal choice for individuals that meet any one of the following:

• More than $10,000 in debt – Depending on one’s credit score, a personal loan can be approved for as much as $50,000
• More than 12 months needed to pay off the debt – Personal loans are a fixed interest rate, so you know what you are paying for the entire life of the loan.  After 12 months, you’re rate will not increase.
• Are worried about your self-control with another credit card – No matter how much money a balance transfer credit card saves you, it is still a credit card.  Once you’ve paid down the balance, the temptation is there to use it, and the interest rate is high (as typical with any credit card).

For people with credit scores above 700, our top ranked personal loan companies are below.  All conduct soft credit checks so that you can apply without worrying about your credit being impacted.

Best personal loans for credit scores 700+

SoFi

Terrific option for borrowers with credit scores above 680 looking to decrease student loan payments or consolidate credit card debt.

• Great rates as low as 3.35%
• Very easy application process
• Unemployment Protection
• Offers 0.25% AutoPay discount when allowing Sofi to automatically deduct payments

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Lending Club

Lending Club is one of the largest lending platforms in the U.S., facilitating over $28 billion in personal loans since 2006. APRs ranging from 5.99 to 35.89 percent.  Great for borrowers with exceptional credit.

• Loans up to $40,000
• No pre-payment penalties
• Allows co-borrowing

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Payoff

Payoff specializes in loan consolidation and also approves borrowers with credit scores below 700.  It offers interactive financial tools and an approach that focuses on their customers’ overall financial wellness.

• Loans up to $35,000
• Credit scores accepted as low as 600
• Competitive APR rates as low as 8%

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Since many loan providers only operate in certain states, you can use the BrightRates personal loan match to see which lender is the best fit for your needs