There’s no shame in having debt — each American household has an average of over $100,000. But if you’re putting too much toward high-interest credit cards or other debt, that’s less money in your pocket.
Consolidating your debt could save you money on that interest and combine all of your monthly payments into one — making it easier for you to get out of debt. You’ll usually need good credit to qualify for the lowest rates. But even with bad credit, consolidation could still get you a better rate.
We did the work to help you find the best personal loans for debt consolidation, so you can finally take control of your debt. Here are the best debt consolidation loans to help you feel less overwhelmed in 2024.
Best debt consolidation loans
- SoFi: Best for fast funding.
- Upgrade: Best for poor or thin credit.
- Achieve: Best for quick approval decisions.
- LendingClub: Best for co-borrowers.
- Discover: Best for excellent credit.
- Happy Money: Best for credit card consolidation.
- LightStream: Best for large loans.
Our top picks for debt consolidation loans in 2024
Best for fast funding
SoFi
Blueprint Rating
Via Fiona's website
Fixed APR
8.99% to 29.49%
Loan amounts
$5,000 to $100,000
Why it’s the best
Unlike most lenders, SoFi has no minimum credit score requirements, and it charges no fees on its personal loans. Plus, you could get your funds from a SoFi debt consolidation loan as soon as the same business day after approval, which can make it a good choice if you’re looking to consolidate debt quickly.
SoFi also offers a 0.25% rate discount to borrowers who have their funds sent directly to their creditors. You can also get another 0.25% off your rate if you sign up for automatic payments along with another 0.125% reduction if you’re already a SoFi customer.
With SoFi, you can borrow $5,000 to $100,000 and choose a repayment term from two to seven years.
Keep in mind that SoFi isn’t licensed to offer personal loans in all states, so you’ll need to check if your state is eligible before applying.
Pros and cons
Pros
- Same-day funding available.
- Maximum $100,000 loan amount.
- Offers several member benefits and rate discounts.
Cons
- Must borrow at least $5,000.
- Slightly higher minimum APR compared to some lenders.
- Not available in all states.
More details
- Interest rates: 8.99% to 29.49%.
- Loan amounts: $5,000 to $100,000.
- Repayment terms: 2 to 7 years.
- Discounts and perks: Direct lender payment discount (0.25%), autopay discount (0.25%) and existing customer discount (0.125%); member benefits such as unemployment protection.
- Fees: None.
- Min. credit score: No specific minimum.
Best for poor or thin credit
Upgrade
Blueprint Rating
Via Credible's website
Fixed APR
8.49% to 35.99%
Loan amounts
$1,000 up to $50,000
Why it’s the best
While most lenders require good to excellent credit, Upgrade has no specific minimum credit score. This could make it ideal for borrowers who have poor credit or who don’t have enough of a credit history to generate a credit score (known as having “thin credit”).
With Upgrade, you can borrow $1,000 up to $50,000 to cover small as well as extensive amounts of debt. Additionally, you could have your loan funded within one day of approval. The lender also provides the option to send the money directly to your creditors to make the process even easier.
Note that Upgrade charges an origination fee as well as fees for late and returned payments.
Pros and cons
Pros
- Accepts poor and thin credit.
- Free credit monitoring and educational resources.
- Loan amounts up to $50,000.
Cons
- High maximum APR.
- Charges an origination fee.
- Charges fees for late and returned payments.
More details
- Interest rates: 8.49% to 35.99%.
- Loan amounts: $1,000 up to $50,000.
- Repayment terms: 2 to 7 years.
- Discounts and perks: No prepayment penalty.
- Fees: Origination fee (1.85% to 8.99%), late payment fee (up to $10) and returned payment fee ($10).
- Min. credit score: No specific minimum.
Best for quick approval decisions
Achieve
Blueprint Rating
Via Fiona's website
Fixed APR
8.99% to 35.99%
Loan amounts
$5,000 to $50,000
Why it’s the best
If you’re looking for a quick approval decision, Achieve — which rebranded from FreedomPlus in December 2022 — could be a good choice. The lender offers same-day loan decisions as well as funding within 24 to 72 hours. You can borrow $5,000 to $50,000 and choose a term from two to five years.
Achieve also offers rate discounts to borrowers who opt to have the lender pay off their creditors directly, apply with a co-borrower or show proof of sufficient retirement savings.
Keep in mind that Achieve charges an origination fee, which can increase your overall borrowing costs.
Pros and cons
Pros
- Same-day approval decisions.
- Funding within 24 to 72 hours.
- Accepts credit scores as low as 620.
Cons
- Charges an origination fee.
- Not available in all states.
- Must borrow at least $5,000.
More details
- Interest rates: 8.99% to 35.99%.
- Loan amounts: $5,000 to $50,000.
- Repayment terms: 2 to 5 years.
- Discounts and perks: Rate discount for borrowers who opt to have their creditors paid directly, apply with a co-borrower or show proof of sufficient retirement savings.
- Fees: Origination fee (1.99% to 6.99%).
- Min. credit score: 620.
- Can make direct payment to third-party creditors: Yes.
Best for co-borrowers
LendingClub
Blueprint Rating
Via Fiona's website
Fixed APR
8.98% to 35.99%
Loan amounts
$1,000 to $40,000
Why it’s the best
Unlike many personal loan lenders, LendingClub allows you to apply with a co-borrower, which could help you qualify for a larger loan amount or better rate than you’d get on your own. Note that you and your co-borrower will be equally responsible for repaying the loan.
LendingClub loans range from $1,000 to $40,000 and come with terms from three to five years. If you’re approved, you could receive your funds in as little as 24 hours.
Pros and cons
Pros
- Allows co-borrowers.
- Funding in as little as 24 hours after approval.
- No minimum credit score requirement.
Cons
- Charges an origination fee.
- Charges late fees.
- Limited repayment terms (only 3 to 5 years).
More details
- Interest rates: 8.98% to 35.99%.
- Loan amounts: $1,000 to $40,000.
- Repayment terms: 3 to 5 years.
- Discounts and perks: No prepayment penalty.
- Fees: Origination fee (3% to 8%), late fee (5% of outstanding payment amount or $15, whichever is greater) and insufficient funds fee ($15).
- Min. credit score: No minimum.
- Can make direct payment to third-party creditors: Yes.
Best for excellent credit
Discover
Blueprint Rating
Via Credible's website
Fixed APR
7.99% to 24.99%
Loan amounts
$2,500 to $40,000
Why it’s the best
Discover offers one of the lowest minimum annual percentage rates (APRs) of the lenders on this list. This can make it a good choice for borrowers with excellent credit who can qualify for the best rates.
With Discover, you can borrow $2,500 to $40,000 with terms from three to seven years. Unlike most personal loan lenders, Discover doesn’t charge an origination fee — though it does assess fees for late payments.
Keep in mind that you’ll need a minimum income of $25,000 as well as a credit score of at least 660 to qualify.
Pros and cons
Pros
- Competitive rates.
- No origination fee.
- Repayment assistance programs available.
Cons
- Lower loan amounts compared to some lenders.
- Co-borrowers not permitted.
- Charges late fees.
More details
- Interest rates: 7.99% to 24.99%.
- Loan amounts: $2,500 to $40,000.
- Repayment terms: 3 to 7 years.
- Discounts and perks: No origination fee or prepayment penalty.
- Fees: Late fee ($39).
- Min. credit score: 660.
- Can make direct payment to third-party creditors: Yes.
Best for credit card consolidation
Happy Money
Blueprint Rating
Via Fiona's website
Fixed APR
11.72% to 17.99%
Loan amounts
$5,000 to $100,000
Why it’s the best
Happy Money (previously Payoff) offers personal loans specifically for credit card consolidation. These loans range from $5,000 to $40,000 (minimum of $5,100 in New Mexico and $6,100 in Maryland) and come with terms from two to five years. Happy Money also provides the option to pay your credit card issuer directly.
While Happy Money’s loans do come with an origination fee from 0% to 5% of the loan amount, you won’t have to worry about any other fees typically associated with personal loans.
Pros and cons
Pros
- No late fees or prepayment penalties.
- Accepts fair credit scores.
- Excellent Trustpilot reviews.
Cons
- Loans can only be used for credit card consolidation (certain unsecured installment loans might also be accepted for consolidation).
- Charges an origination fee.
- Doesn’t allow co-signers.
More details
- Interest rates: 11.72% to 17.99%.
- Loan amounts: $5,000 (minimum of $5,100 in New Mexico and $6,100 in Maryland) to $40,000.
- Repayment terms: 2 to 5 years.
- Discounts and perks: No fees outside of origination fee.
- Fees: Origination fee (0% to 5%).
- Min. credit score: 640.
- Can make direct payment to third-party creditors: Yes.
Best for large loans
LightStream
Blueprint Rating
Via Credible's website
Fixed APR
8.89% to 25.99%
Loan amounts
$5,000 to $100,000
Why it’s the best
With a LightStream debt consolidation loan, you can borrow $5,000 to $100,000 with terms from two to seven years. This could make this lender a good choice if need to consolidate a large amount of debt. Plus, you can get your funds as soon as the same business day after approval.
LightStream also offers a 0.50% rate discount if you sign up for automatic payments prior to your loan funding. Additionally, if you’ve already been approved for an unsecured loan from another lender, you could get 0.10% off your rate with LightStream through its Rate Beat Program.
Note that unlike other lenders, LightStream doesn’t offer a pre-qualification process, and it doesn’t provide the option to pay your creditors directly. It also doesn’t disclose its minimum credit score requirement, though it does specify that it only approves profiles from borrowers with good to excellent credit.
Pros and cons
Pros
- Loan amounts up to $100,000.
- No fees.
- Fast funding.
Cons
- Direct creditor payment not available.
- Must borrow at least $5,000.
- Doesn’t let borrowers pre-qualify.
More details
- Interest rates: 8.89% to 25.99%.
- Loan amounts: $5,000 to $100,000.
- Repayment terms: 2 to 7 years (up to 12 years for some loan types).
- Discounts and perks: Rate Beat Program (0.1%) and autopay discount (0.5%).
- Fees: None.
- Min. credit score: Does not disclose.
Compare the best debt consolidation loan lenders
| INTEREST RATES | LOAN AMOUNTS | LOAN TERMS | DIRECT PAYMENT TO CREDITORS? | |
|---|---|---|---|---|
SoFi | 8.99% to 29.49% | $5,000 to $100,000 | 2 to 7 years | Yes |
Upgrade | 8.49% to 35.99% | $1,000 to $50,000 | 2 to 7 years | Yes |
Achieve | 8.99% to 35.99% | $1,000 to $50,000 | 2 to 5 years | Yes |
LendingClub | 8.98% to 35.99% | $1,000 to $40,000 | 2 to 5 years | Yes |
Discover | 7.99% to 24.99% | $2,500 to $40,000 | 3 to 7 years | Yes |
Happy Money | 11.72% to 17.99% | $5,000 to $40,000 | 2 to 5 years | Yes |
Lightstream | 8.89% to 25.99% | $5,000 to $100,000 | 2 to 7 years (depending on loan type) | No |
All rates include discounts where noted by the lender and are accurate as of August 1, 2024.
Methodology
Our expert writers and editors have reviewed and researched multiple lenders to help you find the best debt consolidation loan. Out of all the lenders considered, the seven that made our list excelled in areas across the following categories (with weightings):
- Loan cost: 35%
- Loan details: 25%
- Eligibility and accessibility: 20%
- Direct creditor payment: 10%
- Customer experience: 10%
Within each major category, we considered several characteristics, including APR ranges, prepayment penalties, maximum loan amounts and terms, minimum credit score requirements and co-signer acceptance. We also evaluated each provider’s customer support options and customer reviews.
What is a debt consolidation loan?
A debt consolidation loan is a type of personal loan that you can use to pay off existing debts, such as credit cards or medical bills. This leaves you with just one rate and payment to manage, which can greatly simplify your repayment.
Depending on the lender, debt consolidation loans can range from as little as a few hundred dollars up to $100,000, and they generally come with repayment terms from one to seven years.
Personal loans for debt consolidation also typically have fixed interest rates, which means your rate and payment will stay the same throughout the life of the loan. Additionally, if you have good credit, you might qualify for a lower interest rate on a debt consolidation loan than what you’ve been paying. This could save you money on interest and possibly help you get out of debt faster.
Looking for expert help? See how credit counseling can help you get out of debt
How it works
When you take out a debt consolidation loan, you’ll use the funds to pay off other debts. While you can receive the money as a lump sum, some debt consolidation lenders can send the funds directly to your creditors, making the process even easier. Afterward, you’ll be left with only a single loan and monthly payment to track.
Is it right for you? Using a personal loan to pay off credit card debt
How to get a debt consolidation loan
If you’re ready to get a debt consolidation loan, follow these steps:
- Check your credit. When you apply for a personal loan for debt consolidation, the lender will review your credit to see if you qualify — so it’s a good idea to check your credit beforehand to see where you stand. You can use a site like AnnualCreditReport.com to review your credit reports for free. If you find any errors, report them to the appropriate credit bureaus to potentially boost your credit score.
- Compare lenders and pick a loan option. Before you apply, take the time to shop around and compare your options with as many loan consolidation companies as possible. This way, you’ll be able to find the right debt consolidation loan for your needs. Look at interest rates as well as other factors like repayment terms, fees and eligibility requirements. Afterward, choose the loan option you like best.
- Submit an application. Once you’ve picked a lender, you’ll need to complete a full application. Many lenders offer fully online applications while others might require you to visit a local branch. Be prepared to submit requested documentation, too, such as tax returns or pay stubs.
- Get your funds. If you’re approved, the lender will have you sign for the loan so the funds can be disbursed to you. It generally takes about a week to receive funds from a personal loan — though with some lenders, you could get your money as soon as the same or next business day after approval. Several debt consolidation lenders also offer the option to pay your creditors directly to make the process even easier.
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Is debt consolidation a good idea?
Whether debt consolidation is a good idea will depend on your individual situation and financial goals. For example, say you have good credit and can qualify for a lower interest rate than what you’ve been paying. Or you simply have multiple debts and want to combine them so they’re easier to manage. In these cases, consolidating could be a helpful move.
On the other hand, say you have bad credit and can’t qualify for a decent interest rate. Or you’re struggling with an unresolved spending problem that consolidation won’t fix. In these situations, debt consolidation might not be the best solution.
Pros and cons of debt consolidation
Here are some pros and cons of debt consolidation to help you decide if it’s the right fit for you:
| Pros | Cons |
|---|---|
Could lower your interest rate. | Could be hard to qualify without good credit. |
Might reduce your monthly payments if you choose a longer loan term. | Might come with fees. |
Combines debt into one loan, which can simplify repayment. | Doesn’t solve underlying financial issues. |
Consolidation can still be possible: Compare the top debt consolidation lenders for bad credit
Alternatives to a debt consolidation loan
If a debt consolidation loan doesn’t seem right for you, here are some alternatives to consider:
Balance transfer card
With this option, you can transfer credit card debt to a balance transfer credit card. Several cards offer a 0% APR introductory period, which means you can avoid interest charges if you pay off the card before it ends.
Just keep in mind that if you can’t repay your balance in time, you could end up with some hefty interest charges. Balance transfers also usually come with fees — typically 3% to 5% of the total transfer amount.
Home equity loan
If you’re a homeowner, you could tap into your equity with a home equity loan to consolidate debt. Similar to a personal loan, you’ll receive a lump sum to use how you’d like — though home equity loans often come with lower interest rates in comparison.
However, because your home acts as collateral for the loan, you risk losing it if you can’t keep up with your payments.
Home equity line of credit
Another option for accessing home equity is with a home equity line of credit (HELOC). With a HELOC, you’ll have access to a revolving credit line that you can repeatedly draw on and pay off — similar to a credit card. HELOCs also tend to have lower interest rates than home equity loans and personal loans.
Note that HELOC rates are often variable, meaning your rate and payment could fluctuate according to market conditions. Additionally, the lender could foreclose on your home if you fail to make your payments.
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Frequently asked questions (FAQs)
A debt consolidation loan can be used to pay off a wide variety of debts. For example, you could use a debt consolidation loan to consolidate:
- Credit cards.
- Store cards.
- Gas cards.
- Medical bills.
- Student loans.
- Personal loans.
- Accounts in collection.
When you apply for a debt consolidation loan, the lender will perform a hard credit check to determine your creditworthiness. This could affect your credit score by causing a slight but temporary drop — usually around five points, though this can vary. You can generally expect your score to bounce back after a few months.
Keep in mind that your payment history makes up 35% of your FICO credit score, so you could see an improvement in your score over time if you consistently make on-time payments on your loan.
Getting a debt consolidation loan might also boost your score if you’re able to reduce your credit utilization ratio, which is the amount you owe on revolving credit lines (like credit cards and lines of credit) compared to your total credit limits.
While consolidating your debt can help you pay off outstanding loans, save money on interest and simplify your repayment, it can also come with a few disadvantages. For example, you might end up with:
- Fees: Even the best loans for debt consolidation can come with fees (such as origination fees or late fees), depending on the lender.
- Higher rates: In some situations, you might end up with a higher rate than what you’re currently paying. Some factors that can lead to a higher rate include having less-than-stellar credit, choosing a longer repayment term or borrowing a larger amount.
- No financial solution: Consolidation doesn’t address any underlying financial issues or problems that you might have. It also won’t help borrowers curb overspending or other poor financial habits.
Debt consolidation itself does not show up on your credit report unless you go through a separate process known as debt settlement. This is where instead of paying off your debts in full, you negotiate with your creditors to settle your debts with a single lump-sum payment—usually for less than what you owe. While this can provide financial relief, it can also damage your credit and come with expensive fees.
If you opt to take out a personal loan for debt consolidation, the hard credit inquiry performed by the lender during the application process will show up on your credit report and will stay there for two years. The inquiry itself will only impact your score for up to one year, though.
Your new loan will also be listed on your credit report, and your payments will be reported to the credit bureaus. Any missed or late payments can stay on your credit report for up to seven years, so be sure to keep up with your payments. You might consider signing up for automatic payments to avoid missing any in the future.
The best consolidation loan for you depends on your individual circ*mstances. For example, if you have several large debts with high interest rates and prefer a longer repayment period, then a debt consolidation loan could be a good choice.
But if you have credit card debt that you can afford to pay off before a 0% APR introductory period ends, then a balance transfer card might be a better fit to save more on interest.
Editor’s Note:This article contains updated information from previously published stories:
- 5 simple steps to consolidate your debt with a personal loan
- Is using a personal loan to pay off credit card debt a good move?
- 5 tips to get approved for a personal loan for debt consolidation
