Elizabethsalleebauer/Getty Images

The holiday season is a time of celebration – and spending. In fact, 61 percent of consumers with credit card debt planned on adding to their balances this holiday season, according to a recent survey from Bankrate sister site CreditCards.com.

Unfortunately, anything borrowed eventually needs to be repaid, plus interest. When you charge holiday debt on a credit card with an average APR over 17 percent, paying down the principal of your balance isn’t easy.

Options for consolidating holiday debt

One smart strategy is to consolidate debt into a new loan with better terms. Most debt consolidation options can help you secure a lower interest rate, meaning you can pay a lower monthly payment each month and pay down debt faster.

These debt consolidation options can help you pay off holiday debt faster.

Debt consolidation loan

Debt consolidation loans are personal loans. They come with a fixed interest rate, a fixed monthly payment and a fixed repayment timeline that lets you know exactly when you’ll be debt-free. Personal loan rates range from about 5 percent to 36 percent, making them an affordable option for consumers who have good to great credit.

Pros:

  • Debt consolidation loans are easy to shop for and compare online. Some even let you get prequalified without a hard inquiry on your credit report.
  • These loans often come with low interest rates and no fees when you have good or excellent credit.
  • These loans offer a range of repayment terms, so you can find one that matches your needs.

Cons:

  • If you have bad credit, you will likely pay a higher interest rate.
  • Some personal loans come with origination fees that can equal up to 6 percent of your loan amount upfront.

Balance transfer credit card

A balance transfer credit card can help you dig your way out debt faster. Balance transfer credit cards offer 0 percent APR on transferred balances for up to 21 months, although some do charge a 3 or 5 percent balance transfer fee for the privilege.

Pros:

  • Paying down debt at 0 percent APR will help you chip away at the principal of your balance significantly faster.
  • Most 0 percent APR credit cards don’t charge an annual fee.
  • Many introductory offers last for 18 or 21 months, which could be enough time for you to pay off your debt entirely.

Cons:

  • Once your card’s introductory offer is over, your interest rate will reset to the standard variable rate.
  • Some cards charge a 3 to 5 percent balance transfer fee upfront.

Home equity loan or HELOC

If you have enough equity in your home, you can also borrow against your home’s value to consolidate debt. Home equity loans are similar to personal loans in that you get a fixed interest rate, a fixed monthly payment and a fixed repayment. However, you can also opt for a home equity line of credit, or HELOC, which is a line of credit you can borrow against in exchange for a variable APR.

Pros:

Cons:

  • Home equity loan products can come with pricey fees and closing costs similar to a home mortgage.
  • You’re using your home as collateral, meaning you could lose your property to foreclosure if you don’t repay your loan.

Borrow from your 401(k)

A 401(k) loan lets you borrow against your retirement savings, only to have your loan repaid through regular payroll deductions. 401(k) loans let you consolidate debt or pay for a major purchase without borrowing money from a third party bank or lender.

Pros:

  • You can borrow money from yourself instead of a bank or another lender.
  • You don’t have to rack up any more unsecured debt. 

Cons:

  • 401(k) loans are subject to limits, and you can typically only borrow up to 50 percent of your vested account balance.
  • If you leave your job, you may be required to repay your loan by the end of the tax year in order to avoid default and penalties.
  • Not all 401(k) plans allow loans, so make sure to check with your plan administrator.
  • When you borrow from your 401(k), you’re removing money that can be growing tax-free. The less money in your account, the less money that has the opportunity to grow over time.

Sign up for a debt management plan

Some credit counseling agencies offer debt management plans that can help you get back on track. These plans require you to deposit money into an escrow account each month, which the agency you’re working with uses to pay credit card bills and other debts you owe. The credit counseling agency will also try to negotiate lower interest rates on your behalf, which can help you pay less in interest and get out of debt faster.

Pros:

  • Working with a credit counselor may help you stay disciplined while you pay off holiday debt.
  • Having a third party negotiate interest rates on your behalf can help if you’re overwhelmed by the process.
  • Credit counseling agencies pay your bills on your behalf when you’re in a debt management plan, leaving you with only one monthly payment to make each month.

Cons:

  • Debt management plans typically are not free. You’ll usually pay $50 or more per month for the help you receive.
  • You’ll need to be aware of debt management and debt settlement scams since many shady companies operate in this space. Make sure companies you’re considering don’t charge any upfront fees for their help.

The bottom line

Racking up holiday debt is easy, but paying it off can take months or even years. If you have too much debt to handle, consolidating debt at a lower interest rate can help you pay less interest over time and pay off debt faster.

Just remember that none of the debt consolidation methods on this list will work if you keep using credit cards and adding to the pile. To get out of debt — and stay out — create a plan to pay it off and stop using your credit cards until you’re debt-free.