Refinance credit card debt

Credit card refinancing allows you to combine multiple credit card payments into one monthly payment. It’s an approach to paying off your credit cards. If you use a loan to consolidate your credit cards, you’ll make a single monthly payment instead of one for each credit card. You’ll also have a date when you’ll be debt free - for example, if you get a loan with a 36 month term, you’ll know that your credit card debt will be paid off in 36 months. Lastly, personal loans through Upgrade have fixed interest rates. This means your interest rate will never go up, you can easily predict how much you’ll pay each month, and you may save on interest over time!

The Debt Payoff option may appear when you check your rate with Upgrade. It allows you to use all or part of your loan to pay off existing debt. If you’re approved for a personal loan and select this option, you’ll tell Upgrade which credit card debts or personal loans you’d like us to pay and how much of your new loan you’d like to put towards this debt. Upgrade will coordinate sending the funds from your new personal loan to your previous creditors.

A balance transfer happens when you move debt from one account to another. This can help you lower your interest rate, but it has a few downsides. For one, you’ll typically be charged a balance transfer fee between 3-5% of the amount transferred. You may also have a low balance transfer card limit, which will keep you from transferring your full balance. Additionally, you won’t be able to transfer a balance from the same issuer. And since you’re transferring one credit card balance to another, you may still deal with variable interest rates that can cost you more money over time.

On the other hand, a personal loan gives you a fixed interest rate and a set date when you’ll have paid off your debt. 

Learn more about revolving debt (credit cards) vs. installment debt (personal loans).

Refinancing credit card debt with a personal loan increases your available credit. If the amount of credit you're using stays consistent and your available credit increases, your credit utilization ratio will be lower. This can help increase your credit score.

Additionally, if you make payments on your new personal loan on time, you’ll improve your payment history. Payment history is the biggest factor behind your credit score.