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Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners.
A debt consolidation loan is a path to relief for a lot of people struggling to manage credit cards and other high-interest debt.
Debt consolidation replaces your existing debts with a single loan, usually with more favorable terms, like a lower interest rate that’ll save you money, or a lower monthly payment and longer repayment period that gives you more breathing room.
These loans are a common part of savvy debt payoff strategies, because they can often help you save money, pay off debt faster or both. If you feel like you’re drowning in debt, they could extend the time it takes you to pay and take the stress off of keeping up with monthly payments.
Debt consolidation loans are available from lenders as personal loans, sometimes marketed specifically as “debt consolidation loans” and sometimes simply as personal loans.
We’ve reviewed some of the top personal loan lenders online to help you find the best debt consolidation loans available for your financial situation and goals.
Best Debt Consolidation Loans at a Glance
|
Universal Credit |
8.93% – 35.93% |
$1,000 – $50,000 |
36 to 60 months |
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|
Happy Money |
5.99% – 24.99% |
$5,000 – $40,000 |
2 – 5 years |
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|
LightStream |
3.49% – 19.99% |
$5,000 – $100,000 |
Up to 7 years |
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|
Credible Personal Loans |
3.49% – 35.99% |
$600 – $100,000 |
1 – 7 years |
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|
Upstart |
5.22% – 35.99% |
$1,000 – $50,000 |
3 or 5 years |
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|
SoFi |
5.74% – 21.78% |
$5,000 – $100,000 |
2 – 7 years |
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|
Figure |
5.75% – 31.44% |
$5,000 – $50,000 |
3 years |
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|
Upgrade |
5.94% – 35.97% |
$1,000 – $50,000 |
24 – 84 months |
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|
Rocket Loans |
5.97% – 29.99% |
$2,000 – $45,000 |
36 or 60 months |
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|
Discover |
5.99% – 24.99% |
$2,500 – $35,000 |
36, 48, 60, 72 or 84 months |
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|
Marcus |
6.99% – 19.99% |
$3,500 – $40,000 |
36 – 72 months |
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|
LendingClub |
7.04% – 35.89% |
$1,000 – $40,000 |
3 or 5 years |
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|
Prosper |
7.95% – 35.99% |
$2,000 – $40,000 |
3 or 5 years |
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|
Stilt |
Starting at 7.99% – 25% |
$1,000 – $35,000 |
12, 18, 24 or 36 months |
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|
Avant |
9.95% – 35.99% |
$2,000 – $35,000 |
24 – 60 months |
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|
LendingPoint |
9.99% – 35.99% |
$2,000 – $36,500 |
24 – 60 months |
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Universal Credit
Best for Credit Scores below 600
Key Features
Funding within one day
Fixed interest rate
Rate discounts for debt pay off
Universal Credit is designed especially for debt consolidation and pay off. It offers rate discounts of between one and two percentage points — pretty significant! — for borrowers who use a Universal Credit personal loan to directly pay off credit card debt. Loans are available for borrowers with fair or bad credit.
Universal Credit
APR
8.93% – 35.93%
Loan amounts
$1,000 – $50,000
Minimum credit score
560
Happy Money
Best for Community-Based Lenders
Key Features
Designed for credit card payoff
Borrow from community-based lenders
Loans up to $40,000
Happy Money’s Payoff Loan is designed specially for credit card debt consolidation. The financial tech company works with community credit unions and mission-driven community banks to provide personal loans to pay off your debt directly. Choose the plan that works best for you, whether it’s a lower monthly payment, lower interest rate or earlier payoff date.
Happy Money
APR
5.99% – 24.99%
Loan amounts
$5,000 – $40,000
Minimum credit score
600
LightStream
Best for Good to Excellent Credit
Key Features
Same-day funding
No fees
Loans available for low credit scores
LightStream’s personal loans for borrowers with good or excellent credit can help you get hold of up to $100,000 as soon as the same day you’re approved. It also eschews fees and offers to beat the rate of any competitor — just submit information about a lower rate you’re offered elsewhere, and LightStream will offer you a rate 0.10 percentage points lower through its Rate Beat program.
LightStream
APR
3.49% – 19.99%
Loan amounts
$5,000 – $100,000
Minimum credit score
660
Credible
Best for Low Loan Amounts
Key Features
Compare rates from top lenders
Loans for poor credit available
Loan amounts as low as $600
Credible is a lending marketplace that can help you find debt consolidation loans as low as $600. You don’t have to worry about Credible selling your information like other comparison sites — it only gets paid when you accept a loan offer, so it won’t help lenders pester you. You can use the site to compare loan offers side by side and click through to the lender’s site to officially apply.
Credible
APR
3.49% – 35.99%
Loan amounts
$600 – $100,000
Minimum credit store
560
Upstart
Best for Non-Traditional Credit History
Key Features
AI-powered lending for partner banks
Considers more than your credit history
Loan amounts as low as $1,000
Upstart is technically a technology company, not a lender or a marketplace. Its platform uses proprietary AI to connect you with partner lenders, and you manage the loan entirely through the platform. Upstart uses more than a traditional credit score to assess your creditworthiness, so factors like your education and income could help you get a loan even if you have a low or no credit score.
Upstart
APR
5.22% – 35.99%
Loan amounts
$1,000 – $50,000
Minimum credit score
580
SoFi
Best for SoFi Customers
Key Features
No fees
Access to events and perks
Discounts for SoFi clients
SoFi is an online bank that offers financial services ranging from banking to student loans to investing. It offers debt consolidation loans with no fees, and you can apply and manage your account right from its convenient app. You can qualify for a discounted interest rate if you’re an existing SoFi member with a free SoFi bank account or other product in the app.
SoFi
APR
5.74% – 21.78%
Loan amounts
$5,000 – $100,000
Minimum credit score
600
Figure
Best for Crypto-Backed Loans
Key Features
Next-day funding
Powered by Provenance blockchain
0% to 5% origination fee
Figure is an innovative online lender that offers personal loans, with blockchain technology adding efficiency and transparency to its application and loan origination processes. It offers traditional and crypto-backed loans. Figure doesn’t offer direct debt payoff, but you can take out a personal loan up to $50,000 and use the funds to pay off your debts.
Figure
APR
5.75% – 31.44%
Loan amounts
$5,000 – $50,000
Minimum credit score
680
Upgrade
Best for Raising Credit Score
Key Features
Checking, credit and loans in one platform
No prepayment penalties
Next day funding
Upgrade is a financial tech platform designed to help you raise your credit score through checking, credit cards, credit monitoring and personal loans. It offers debt management and payoff in one platform, and you may qualify for a debt consolidation loan with a fair or bad credit score as low as 580.
Upgrade
APR
5.94% – 35.97%
Loan amounts
$1,000 – $50,000
Minimum Credit Score
580
Rocket Loans
Best for Transparent Process
Key Features
Same day funding
No prepayment penalties
All-online application
Rocket Loans lets you apply online for a debt consolidation personal loan in minutes. The online application starts with a transparent overview of the process, so you know what to expect at each step as you await your loan. You can verify your income and identity entirely online, so you don't have to worry about phone calls or snail mail slowing down the process.
Rocket Loans
APR
5.97% – 29.99%
Loan amounts
$2,000 – $45,000
Minimum credit score
580
Discover
Best for Flexible Repayment Options
Key Features
No fees (except late fees)
Repayment assistance options
Free FICO credit score
Discover’s debt consolidation loans are fee-free and available to borrowers with a credit score as low as 660. Its repayment assistance options are robust compared to many competitors: If your financial situation changes, you could apply for payment deferral, a short-term shift to interest-only payments or extend your repayment period for lower monthly payments.
Discover
APR
5.99% – 24.99%
Loan amounts
$2,500 – $35,000
Minimum credit score
660
Marcus
Best for On-Time Payment Rewards
Key Features
No fees
Skip-a-payment reward for on-time repayment
Customize your monthly payment
Marcus is the personal banking arm of Goldman Sachs, offering individual savings, investing, credit cards and loans. Its personal loans are available to borrowers with good credit for up to $40,000, with no fees — not even late fees. And it rewards you for on-time payment: Make your monthly payment on time for 12 months in a row, and you can defer payment for a month with no additional interest accrued.
Marcus
APR
6.99% – 19.99%
Loan amounts
$3,500 – $40,000
Minimum credit score
670
LendingClub
Best for Bad Credit Loans
Key Features
Borrow up to $40,000
Funding within 48 hours
No prepayment penalty
LendingClub calls itself an “online marketplace bank.” It offers checking accounts and personal loans, including loans for debt consolidation, up to $40,000 for terms of three to five years. LendingClub can be a good option if you have a low credit score; loans may be available for lenders with scores as low as 600.
LendingClub
APR
7.04% – 35.89%
Loan amounts
$1,000 – $40,000
Minimum credit score
600
Prosper
Best for Peer-to-Peer Borrowing
Key Features
Peer-to-peer lending
Next-day funding
No prepayment penalty
Prosper is one of few peer-to-peer lending platforms left — individuals and financial institutions can invest in personal loans to support borrowers and earn a little bit of a return. You don’t have to deal with investors directly; Prosper manages the application and loan origination. Loans are available from $2,000 to $40,000 with a credit score as low as 600.
Prosper
APR
7.95% – 35.99%
Loan amounts
$2,000 – $40,000
Minimum credit score
600
Stilt
Best for Non-Citizens and Visa Holders
Key Features
No SSN or U.S. citizenship required
No prepayment penalty
No U.S. credit history required
Stilt doesn’t appear to offer a direct debt consolidation loan, but a personal loan could be used to pay off debt. This company focuses on helping new immigrants and other underserved Americans access credit. Applicants don’t need a Social Security number to apply — as they do with almost every lender — just a U.S. address and bank account. Loans are available to borrowers with limited credit histories.
Stilt
APR
7.99% – 25%
Loan amounts
$1,000 – $35,000
Minimum credit score
n/a
Avant
Best for Fair Credit Loans
Key Features
Next-day funding
Minimum credit score 580
Not available in New York
Avant offers personal loans up to $35,000, with funding as soon as the next business day after approval. The lender’s minimum credit score is just 580; most borrowers have FICO scores between 600 and 700.
Avant
APR
9.95% – 35.99%
Loan amounts
$2,000 – $35,000
Miminum credit score
580
LendingPoint
Best for Fair Credit Borrowers
Key Features
Next-day funding
No co-sign loans
Not available in Nevada or West Virginia
LendingPoint assesses creditworthiness with a proprietary algorithm that looks beyond traditional FICO scores, so it’s able to lend to borrowers with scores as low as 600. LendingPoint loans are available in every state except Nevada and West Virginia.
LendingPoint
APR
9.99% – 35.99%
Loan amount
$2,000 – $36,500
Minimum credit score
600
How Does a Debt Consolidation Loan Work?
A debt consolidation loan is a type of personal loan you take out to pay off existing debts, and it’s most commonly used to pay off high-interest credit card debt.
The reason this is beneficial, even though you still have to repay the same amount of debt, is that personal loans come with much lower interest rates than most credit cards. You might have a few credit card balances accumulating interest at around 16% to 25%, while personal loans usually come with interest rates closer to 5% to 12%.
A “debt consolidation loan” is just a personal loan marketed specifically for debt payoff. They work exactly like personal loans on paper, except that many lenders send loan funds directly to creditors for you. If they don’t, you could still take out a personal loan and use the funds to pay off debts yourself.
To make a debt consolidation loan worth it, you should receive at least one of these benefits:
A lower interest rate (lower than the average of the debts you’re paying off). A lower monthly payment than the total of what you pay now. This could come with a higher interest rate and/or longer repayment period, but it might be what you need for now to stay above water. You can always refinance in the future for a better rate. Quicker payoff. A debt consolidation loan might come with a higher monthly payment, but if you can manage it, that could simplify your debt management, save you on interest and get you out of debt faster. Longer repayment. If you’re consolidating or refinancing existing loans with short repayment terms, a new loan could extend the time you have to repay by lowering your monthly payment. You’ll likely pay more in interest this way, but it could ease your monthly commitments.How to Choose a Debt Consolidation Loan
Before you commit to any debt consolidation option, shop around to see what lenders can offer you. Your available terms could vary quite a bit from lender to lender because of how they evaluate your credit history and what kind of borrowers they’re targeting.
Online lending marketplaces like Credible or Fiona make it easy to quickly see and compare pre-qualified offers from lenders side-by-side, so they could save you some time.
To choose the loan that fits your financial goals, consider these features:
Interest rate: If your main goal is to save money, look for a debt consolidation loan with an interest rate that’s lower than the average rate on your existing debts. Lenders typically offer lower interest rates with shorter repayment periods, so play with those factors to land on a rate that works for you. Monthly payment: Primarily, you need a monthly payment you can pay comfortably every month, considering your existing commitments. If you’re overwhelmed by your current debt payment, refinancing or consolidating into a loan with a lower monthly payment could offer some relief. It’ll probably come with a later payoff date, which could mean you pay more in interest over time — but that lower bill could make the difference between paying on time or not. Repayment term: This is the number of months or years to repay the loan. A longer term (or period) means lower monthly payments, but often comes with a higher interest rate and will mean more time for interest to accumulate. A shorter repayment term means a quicker payoff date, so if your goal is fast debt elimination, look for lenders that offer one- or two-year terms. Fees: Many of the lenders we’ve listed charge no fees, but some still charge an origination fee, which lops off a small percentage of your loan up front. Some companies also charge late payment fees and a few companies even charge a prepayment penalty, which means you could pay extra if you pay off the loan early.Debt Consolidation Loan Costs to Consider
Debt consolidation loans come with the typical costs included with any personal loan, including:
Interest: This is the extra you’ll repay on top of the amount you borrow. Debt consolidation loan rates could be as low as 3.5% or as high as 35.99%, depending mostly on your credit. Avoid loans with a higher interest rate than your existing debt unless consolidation feels like your only option to meet your financial goals. Origination fees: A lot of lenders charge a fee up front just for making you the loan. It’s usually charged as a percentage of the loan amount, around 2% or 3%, and it’s deducted from the initial funds you receive. If your lender charges an origination fee, take that into account to make sure you get the funds you need to cover your debt balances. Late fees: Some lenders charge a late fee if you make a payment past the monthly due date. The fee is typically a percentage of the payment due or a flat fee. Take note of these in your loan agreement if your financial situation changes and you’re unable to make payments on time. You might be able to avoid them by working with the lender to move your due date or ask for a deferment period. Prepayment penalties: Few lenders of debt consolidation loans charge these anymore, but double-check before you sign an agreement. Prepayment penalties are fees you owe if you repay ahead of schedule — either paying your loan balance off early or getting too far ahead on your monthly payments.Debt Management vs. Consolidation vs. Refinancing
As you seek options to tackle your debt, you’ll probably come across information and services for debt management, debt consolidation and debt refinancing. They all have similar aims, but they’re not the same things.
Debt management is a service offered by nonprofit organizations to get difficult debt under control. You work with a debt counselor to mak