To choose between credit card refinancing and a debt consolidation loan, you’ll need to consider how much you owe, how fast you can pay off the debt, your credit score, and the fees associated with each option.
You can usually pay off a lower amount of debt more quickly, in which case credit card refinancing would be ideal. A higher amount of debt lends itself to a more long-term plan, like that of a debt consolidation loan.
Next, consider how quickly you are able to pay the debt off. If you can pay it off within a year and a half, refinancing is likely the better option.
Your credit score, assets, and income will also come into play when determining what you qualify for. You’ll need a credit score higher than 680 to qualify for a 0% introductory offer when refinancing. If you want to go with a loan, your lender will review your income and credit score when determining your interest rates. If you have assets, like a home, you may also get a different type of loan and potentially better interest rates.
Additionally, your personal timeline should come into play. If you need to get rid of debt right away, you may be better off with refinancing, as there are fewer barriers to getting started.
Companies like Credible can help speed up the debt consolidation loan process. With Credible, you can compare your prequalified rates from multiple lenders, side by side. This can significantly cut down on research time. Read our expert Credible review to learn more.