Best Debt Consolidation Loans

The best debt consolidation loans have lower interest rates than your current debt, flexible terms that allow for monthly payments within your budget, low or no origination fees and prepayment penalties, and automatic payments so you never miss a due date.

The approach to debt consolidation that I’d recommend a client take depends on various factors, including the current interest rate environment and the client’s financial circumstances.

Can a personal loan be a good way to consolidate debt? Absolutely! Is it always the go-to recommendation? Absolutely not! 

At times, a 0% balance transfer or a 401(k) loan makes more sense than a personal loan. It all comes down to your financial circumstances and what is available to you.

At the end of the day, we typically seek the lowest possible interest rate option, as long as it is possible from a cash flow perspective.

Kyle Ryan, CFP®

The best debt consolidation loans

Here’s a closer look at our recommended lenders for consolidating your debt in 2024.

Credible

Best Marketplace

5.0 _/5

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Why we picked it

Credible is an exceptional choice for debt consolidation because it allows borrowers to compare rates from multiple lenders without affecting their credit scores. This marketplace saves time and effort by letting you input your information once and review multiple personalized offers from its network of trusted lenders. It’s ideal for those who want to shop around for the best deal without multiple applications.

• Quick comparison of multiple lenders
• Soft credit check for rate estimates
• No impact on credit score to see rates

• Limited to partner lenders
• Marketplace experience may feel impersonal

Rates (APR)	6.99% – 35.99%
Loan amounts	$600 – $200,000
Repayment terms	1 – 10 years
Min. credit score	Varies by lender

Who’s eligible?

• Soft credit check? Yes, checking your rates won’t affect your credit score
• Minimum credit score: Varies by lender. Credible partners with various lenders, each with unique credit requirements
• Minimum income: Varies by lender
• Availability: Available in all 50 states and Washington, D.C.

Who’s it best for?

Credible is best for borrowers who prefer a hands-off approach to comparing lenders and want to avoid the hassle of filling out multiple loan applications.

SoFi

Best for Good Credit

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Why we picked it

SoFi is an excellent fit for borrowers with good-to-excellent credit who want to consolidate debt at competitive rates. 

It offers loans with no fees, such as origination or late fees, and provides large loan amounts—up to $100,000—which makes it a top choice for consolidating high balances. SoFi’s online platform and mobile app make applying, getting approved, and managing payments easy, streamlining the consolidation process for those with solid credit histories.

• No fees (no origination or late fees)
• High loan amounts available
• User-friendly mobile app for loan management

• Requires good to excellent credit for the best rates
• No secured loan options

Rates (APR)	8.99% – 29.99%
Loan amounts	$5,000 – $100,000
Repayment terms	2 – 7 years
Min. credit score	650

Who’s eligible?

• Soft credit check? Yes, you can check your rate without affecting your credit score
• Minimum credit score: 650
• Minimum income: Not disclosed, but requires sufficient income or a job offer
• Availability: Available in all 50 states and Washington, D.C.
• Other requirements: Must be a U.S. citizen, permanent resident, or visa holder (J-1, H-1B, E-2, O-1, or TN) and at least 18 years old

Who’s it best for?

SoFi is best for high-income earners and financially stable borrowers who want to consolidate larger amounts of debt while maintaining a long-term relationship with a lender. 

Upgrade

Best for Fair Credit

4.9 _/5

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Why we picked it

Upgrade is a top choice for borrowers with FICO scores in the 580 to 669 range looking to consolidate debt. It offers flexible loan options and even secured loans, making it easier to qualify. 

Upgrade also provides free credit monitoring and educational resources, helping you maintain your financial health while repaying your consolidated loan. The lender will appeal to those looking to improve their credit during the consolidation process.

• Works with fair credit borrowers
• Secured loan options available
• Free credit monitoring tool

• Origination fees may apply
• Higher rates for those with lower credit scores

Rates (APR)	9.99% – 35.99%
Loan amounts	$1,000 – $50,000
Repayment terms	2 – 7 years
Min. credit score	580

Who’s eligible?

• Soft credit check? Yes, you can prequalify and check your rate without impacting your credit
• Minimum credit score: 580
• Minimum income: Not disclosed
• Availability: Available in all 50 states and Washington, D.C.
• Other requirements: Must be a U.S. citizen, permanent resident, or visa holder, and provide verifiable bank information

Who’s it best for?

Upgrade is best for borrowers with fair credit who want to consolidate debt and improve their credit during the process.

LightStream

Best for Excellent Credit

4.8 _/5

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Why we picked it

LightStream offers some of the lowest interest rates for debt consolidation, but only to those with excellent credit (FICO scores of 800 and higher). It’s an attractive option because it charges no fees whatsoever—no origination fees, late fees, or prepayment penalties. 

Its Rate Beat Program guarantees to beat any competing loan APR by 0.10%, making it perfect for those with top-tier credit scores looking to lock in the best rates.

• No fees or prepayment penalties
• Competitive rates for excellent credit
• Same-day funding available

• Must have excellent credit to qualify for the best rates
• No prequalification process

Rates (APR)	7.49% – 25.29%
Loan amounts	$5,000 – $100,000
Repayment terms	2 – 12 years
Min. credit score	660

Who’s eligible?

• Soft credit check? No; applying requires a hard credit check
• Minimum credit score: 660
• Minimum income: Not disclosed, but requires stable and sufficient income
• Availability: Available in all 50 states and Washington, D.C.
• Other requirements: LightStream prefers borrowers with a mix of financial accounts in good standing and few to no delinquencies

Who’s it best for?

LightStream is best for borrowers with excellent credit who want more than low rates. They also want flexibility in loan terms and a personalized borrowing experience.

Upstart

Best for Little to No Credit

4.8 _/5

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Why we picked it

Upstart uses an innovative AI-driven approval process that looks beyond traditional credit scores, making it the best choice for borrowers with thin credit histories. 

By considering education, employment, and income, Upstart increases the odds of approval for those with limited credit. This approach makes Upstart ideal for people looking to consolidate debt but who don’t have a long credit history or a perfect score.

• Considers non-credit factors
• Fast approval process
• Accepts lower credit scores

• Origination fees may apply
• Higher interest rates for those with lower credit scores

Rates (APR)	7.80% – 35.99%
Loan amounts	$1,000 – $50,000
Repayment terms	3 – 5 years
Min. credit score	None

Who’s eligible?

• Soft credit check? Yes, you can prequalify without affecting your credit score
• Minimum credit score: None
• Minimum income: $12,000 annually
• Availability: Available in all 50 states and Washington, D.C.
• Other requirements: Borrowers must have a valid U.S. bank account, job (or job offer), and meet credit underwriting requirements

Who’s it best for?

Upstart is best for borrowers with thin or limited credit histories who want to consolidate debt but struggle with traditional approval processes.

Happy Money

Best for Credit Card Debt

4.8 _/5

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Why we picked it

Happy Money focuses on helping people consolidate and pay off high-interest credit card debt, which is why it’s our top choice for credit card consolidation. 

Its Payoff Loan is tailored for those with good credit who want to manage their credit card balances in a more structured, predictable way. It offers fixed rates and monthly payments. The company also provides financial wellness support, helping borrowers build better financial habits.

• Specializes in credit card debt consolidation
• Simple, streamlined process
• No prepayment fees

• Limited to credit card consolidation
• Higher rates for those with lower credit scores

Rates (APR)	12.45% – 17.99%
Loan amounts	$5,000 – $40,000
Repayment terms	2 – 5 years
Min. credit score	640

Who’s eligible?

• Soft credit check? Yes, you can check your rate without affecting your credit score.
• Minimum credit score: 640
• Minimum income: Not disclosed
• Availability: Available in all 50 states and Washington, D.C.
• Other requirements: No delinquencies should appear on your credit report

Who’s it best for?

Happy Money is best for borrowers with good credit who want to consolidate credit card debt.

Best Egg

Best for a Secured Loan

4.8 _/5

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Why we picked it

Best Egg is an excellent option for debt consolidation, especially if you’re looking for a secured loan to improve your chances of approval. The lender offers competitive interest rates and flexible terms, allowing borrowers to use collateral (such as a car or home) to secure lower rates. This makes Best Egg a strong choice for those with less-than-perfect credit who need an extra boost in securing favorable loan terms.

• Secured loan options available
• Competitive interest rates
• Flexible loan amounts

• Origination fees may apply
• Requires collateral for secured loans

Rates (APR)	8.99% – 35.99%
Loan amounts	$1,000 – $50,000
Repayment terms	3 – 5 years
Min. credit score	600

Who’s eligible?

• Soft credit check? Yes, checking your rate won’t affect your credit score
• Minimum credit score: 600
• Minimum income: Not disclosed
• Availability: Available in all 50 states and Washington, D.C.
• Other requirements: U.S. citizens or permanent residents who have a valid checking account and a physical address (no P.O. boxes)

Who’s it best for?

Best Egg is best for borrowers who have equity in their home or another asset but are looking for a less traditional, faster loan approval process than what a home equity loan or home equity line of credit (HELOC) through a bank may offer.

What is a debt consolidation loan?

A debt consolidation loan is a type of personal loan that allows you to combine multiple debts—such as credit card balances, medical bills, or other personal loans—into a single loan with one monthly payment. 

The goal is to simplify your debt repayment process and, ideally, secure a lower interest rate than you were paying on your individual debts. By consolidating multiple debts into one, you can reduce the hassle of managing several payments and due dates while potentially lowering your overall interest costs. 

Debt consolidation loans are helpful for those struggling with high-interest debt. They allow you to repay your debts over a set period with a fixed interest rate and predictable payments. 

However, to make the most of the consolidation, it is important to choose a loan with favorable terms and ensure you don’t take on new debt during the repayment process.

How much can you save with a debt consolidation loan?

How much money you can save with a debt consolidation loan depends on several factors:

• Your current debt: The more you owe, the more you might save by consolidating into a lower-interest loan.
• Interest rates: The greater the difference between your current interest rates and the new loan’s rate, the more you’ll save. (A slightly lower rate on a new loan may not save as much.)
• Fees: Any savings you earn by consolidating your debts could be reduced by any origination or startup fees associated with the new personal loan.
• Prepayment penalties: If your current debts have early payment penalties, you may be subject to those when paying them off with the funds from the debt consolidation loan.

Let’s look at a simple example to understand how much you might save. Assume you have the following debt:

	Loan 1	Loan 2	Loan 3
Amount	$1,000	$5,000	$2,000
Rate	12%	15%	20%
Remaining term (months)	12	48	24
Monthly payment	$88.85	$139.15	$33.62
Total paid	$1,066.19	$6,679.36	$2,443.00

If you didn’t consolidate this loan, your monthly payments would total $261.62, and you’d spend $10,188.57 over four years to repay $8,000.

Now, assume you get a debt consolidation loan with the following:

• Interest rate: 11%
• Term: 36 months
• Origination fee: $0

If you paid off your debts (assuming no early payment penalties) with the debt consolidation loan, your new, single monthly loan payment would be $261.91, and you’d spend a total of $9,428.74 over three years.

The monthly payments are virtually the same, but you’ll save over $750 by consolidating and be out of debt a year sooner. You could lower your new monthly payment by extending the loan terms to 48 or 60 months, but the amount you pay in interest over the life of the loan would increase.

Can you get debt consolidation loans for bad credit?

It’s possible for borrowers with bad credit to get a debt consolidation loan, but there are fewer options. Such loans will also come with higher interest rates and may charge origination fees. Even so, such a debt consolidation loan is often better for borrowers with bad credit, particularly those who:

• Have super-high credit card interest rates
• Struggle with juggling multiple payment dates each month
• Need to lower their payments by getting a longer loan term

For instance, Upstart, one of the best debt consolidation loan companies, is designed for borrowers with limited or bad credit. Upstart uses AI to analyze more than just credit scores, which helps nontraditional borrowers qualify.

Outside of lenders with options for borrowers with poor credit, debt consolidation loans typically have minimum credit scores designed for those with fair (FICO score of 580 to 669), good (670 to 739), very good (740 to 799), and excellent (800 to 850) credit.

The average minimum credit score requirement of the lenders featured above (among those that state a minimum credit score requirement) is 626.

How to get a personal loan to consolidate debt

Getting a personal loan to pay off credit card debt, medical bills, and other unsecured debt is often the exact same process as getting any other personal loan. The only way they might differ is in how the loan is funded. (The lender may pay off your debts for you.)

Here’s a quick look at how to get a personal loan for debt consolidation:

1. Review your current debts: Determine which debts you want to pay off with a debt consolidation loan. Contact the lenders managing those debts for a payoff quote, which may be different from your outstanding balance.
2. Do the math: Use a loan calculator to determine how much you’ll spend paying off those remaining debts (assuming you don’t add any more debt to the total); any debt consolidation loan you get should cost you less money over the life of the loan than the amount you calculated.
3. Research lenders: Use our guide to the best debt consolidation loans to find a lender that works for you. If you can, prequalify with at least three lenders to compare rates, terms, and fees.
4. Apply for the loan: Once you’ve found the right lender and are certain you’ll save money with a new loan, submit your application and wait for approval. Sign on the (digital) dotted line to initiate the loan.
5. Get the funds: Some personal loan lenders offering debt consolidation will pay the other lenders to eliminate your debt. Otherwise, you can wait until the loan amount is deposited into your bank account and then use that cash to pay off your outstanding debts.

Pros and cons of using personal loans for debt consolidation

Using personal loans for debt consolidation can have several advantages, but it’s smart to consider the drawbacks too:

Pros

• One single payment

  If you struggle to remember multiple payment dates for various debts, you’ll appreciate having a single due date each month for all your debts.

• Lower interest rate

  The goal of a debt consolidation loan is to lower the amount of money you spend on your debt by selecting a loan with a lower interest rate than your current debts.

• Active debt payoff plan

  A debt consolidation loan means you’re taking debt payoff seriously, and that’s half the battle. As long as you keep up with payments and don’t take on new debt, a debt consolidation loan can put you on the path to becoming debt-free in a matter of years.

• Can improve credit score

  If you use a debt consolidation loan to pay off your credit cards, it can lower your credit utilization rate, which is a significant part of your credit score.

Cons

• Using debt to pay off debt

  While a debt consolidation loan is an excellent way to pay down high-interest debt, it also involves taking on another loan, which carries inherent risk, especially for people who aren’t good at managing credit.

• Potentially longer loan term

  If you’re hoping to keep monthly payments small, you may need to opt for a longer loan term. This can keep you in debt longer and increase the amount you’ll pay in interest over time, which eats into the savings you get from consolidating in the first place.

• Potential fees

  Some debt consolidation loans may include an origination fee to start the loan. And your current creditors might charge early payment penalties when you pay off those debts.

The best time to consolidate debt is when you notice that it is advantageous to do so. Here’s how you can do that:

• Pay attention to the interest rates associated with your current debts. Are they fixed or variable?
• What interest rate are you offered on a personal loan? Is it lower, with no fees and no prepayment penalties? If so, it may be a good time to consolidate.
• Paying interest on a loan or credit card? Consider a 0% interest balance transfer.

The best time is different for everyone, but generally, it’s when you spend more on principal and less on interest for the loan.

Kyle Ryan, CFP®

Alternatives to personal debt consolidation loans

If a personal debt consolidation loan isn’t the right fit, consider the methods below. Each alternative comes with its own benefits and drawbacks, depending on your financial situation and goals. Below is a summary table comparing each option to a personal loan, followed by a deeper explanation of each alternative.

Method	Best for
Personal loan	Borrowers looking for a quick, unsecured loan with fixed payments and a predictable term
Home equity line of credit (HELOC)	Homeowners needing flexible, revolving access to funds
Home equity loan	Homeowners willing to use home equity for lower rates and larger loan amounts
Balance transfer credit card	People with good credit who can pay off debt fast
Peer-to-peer lending	Borrowers looking for flexible criteria or nontraditional loans

HELOC

Home equity loan

Balance transfer credit card

Peer-to-peer loan

Can you consolidate debt without a loan?

If you don’t want to open a new line of credit—not a personal loan, a balance transfer credit card, or even a home equity loan or HELOC—you still have options for debt consolidation.

Credit counseling

What it is: Credit counseling is a low-cost (or sometimes free) option for meeting with financial professionals who can help you strategically plan a path to paying down your debt.

Pros

• Credit counseling is often free or affordable.

• You’ll get advice from a pro.

Cons

• Credit counselors are not magic. You’ll need to follow through with their advice.

• You could pay a small fee.

• They may still recommend a debt consolidation loan.

Debt snowball

What it is: The debt snowball method is a self-led debt payoff strategy. You’ll make minimum payments on all your monthly balances and put all extra funds toward paying off your smallest loan balance. When you’ve paid that one, you’ll focus on your next smallest until they’re all paid off.

Pros

• Focusing on the smallest amount leads to early victories, which can keep you motivated.

• You don’t need to take out a loan to make this work.

Cons

• By focusing on the smallest first, your other loans with higher interest rates will continue to grow.

• This isn’t a true debt consolidation strategy—it’s a debt payoff strategy—so you’ll still have multiple debts with multiple deadlines and varying interest rates.

Debt avalanche

What it is: The debt avalanche method is similar to the snowball method. You’ll make minimum payments each month on all your loans and then put all extra funds toward your loan with the highest APR first—because that one will grow the fastest. Once that’s paid off, you’ll prioritize the loan with the next-highest APR, and so on.

Pros

• Focusing on the highest APR first means you’ll spend less over time on interest.

• You don’t need to take out a loan to make this work.

Cons

• Focusing on the highest rate first may take you longer to pay off a loan completely, which can be discouraging.

• This isn’t a true debt consolidation strategy—it’s a debt payoff strategy—so you’ll still have multiple debts with multiple deadlines and varying interest rates.

Chapter 7 bankruptcy

What it is: If you file for Chapter 7 bankruptcy, your assets (over a specific value) are liquidated to pay off your unsecured debts (credit cards, personal loans, and medical bills).

Pros

• It’s a fast and affordable way to eliminate your debts and get a fresh start.

• You don’t need to take out a loan to make this work.

Cons

• This is a major negative mark on your credit report that lasts for 10 years.

• You’ll lose much of your property.

• Some debts may not be discharged.

Chapter 13 bankruptcy

What it is: If you file for Chapter 13 bankruptcy, you won’t liquidate your assets; instead, you’ll work with a trustee to set up monthly payments to pay off your debt in three to five years.

Pros

• You get to keep your assets.

• You don’t need to take out a loan to make this work.

Cons

• Though it looks better on your credit report than Chapter 7, it still has a tremendous negative impact on your credit.

• Some debts may not be discharged.

• The repayment can be tough, and you can’t risk missing any payments.

Bankruptcy is usually a worst-case scenario.

Paying off debt via the avalanche or snowball method makes sense if you cannot consolidate into lower-interest-rate debt. I tend to recommend attacking the debt with the highest interest rate first if you are unable to consolidate it into a more favorable rate.

Kyle Ryan, CFP®

FAQ

Do debt consolidation loans hurt your credit score?

Applying for a debt consolidation loan can cause a slight dip in your credit score due to the hard inquiries during the loan application process. 

However, consolidating debt can help improve your credit score over time by reducing your credit utilization ratio and simplifying your payments. If you make consistent on-time payments, your credit score may benefit in the long run.

It might not take long at all. I’ve seen credit scores jump 50-plus points in a month after successful debt consolidation.

Kyle Ryan, CFP®

What is the minimum credit score for a debt consolidation loan?

The minimum credit score required for a debt consolidation loan varies by lender, but most lenders prefer a score of at least 600. 

Some lenders offer loans to borrowers with lower credit scores, but these typically come with higher interest rates. If you have a higher score (around 670 or above), you are more likely to qualify for better terms and lower rates.

Can I still use my credit card after debt consolidation?

Yes, you can still use your credit card after consolidating your debt. However, we recommend that you avoid carrying a statement balance, which will charge you interest. If you pay your balance in full each month, feel free to keep using your credit card after consolidating.

Is it better to consolidate or settle debt?

Debt consolidation is usually a better option if you want to simplify your payments and lower your interest rates while maintaining control of your finances. It allows you to repay your debt over time without damaging your credit score. 

Debt settlement can damage your credit and often involves negotiating to pay less than you owe. Settlement may be a last resort for those struggling with severe financial hardship, but it can have long-term negative consequences on your credit—and the forgiveness amount can be taxable.

How we rated the best debt consolidation loans

Since 2017, LendEDU has evaluated personal loan companies to help readers find the best personal loans. Our latest analysis reviewed 1,029 data points from 49 lenders and financial institutions, with 21 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Recap of the best debt consolidation loans