Managing multiple debts can be overwhelming. If you carry a balance on your credit cards each month, you aren’t alone — the average consumer carried a credit card balance of nearly $6,000 in the second quarter of 2023, according to TransUnion. By the third quarter of 2023, the Federal Reserve reports that total credit card balances reached an all-time high of $1.08 trillion.
If you want to simplify repayment and potentially save money in the process, a debt consolidation loan could be the answer. This process involves using a lump-sum personal loan to roll your high-interest debts into a single monthly payment. If you have good credit scores, you may qualify for low rates and see substantial savings on interest in the long run.
We analyzed dozens of companies to determine the 10 best lenders for debt consolidation.
Methodology
To determine the best lenders for debt consolidation loans, our editorial team considered five categories of factors, including interest rate and other costs; loan details, such as amounts and funding timeline; eligibility criteria and loan availability; repayment terms and experience; and, finally, customer support and consumer reviews. We drilled down in each category, seeking to weigh everything potential borrowers could value.
- 32 companies reviewed
- 896 data points analyzed
- 28 features we considered
- 35 primary data sources used
Read our complete methodology to learn more about how our editors and data team arrived at the best debt consolidation loans.
Show summary
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SoFi
: Best debt consolidation loan
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Oportun
: Best for borrowers with bad credit
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Best Egg
: Best for secured loans
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PenFed Credit Union
: Best for low rates and fees
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Laurel Road
: Best for pre-qualification
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OneMain Financial
: Best for fast funding
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LendingClub
: Best for direct creditor payments
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First Tech Federal Credit Union
: Best for small loans
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PNC Bank
: Best for flexible repayment terms
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Navy Federal Credit Union
: Best for military families
SoFi
Best debt consolidation loan
APRs
8.99% to 25.81%*
Loan amounts
$5,000 to $100,000
Minimum credit score
680
5/5
The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.
On Credible’s Website
Why we picked it
SoFi offers a broad mix of loan amounts and terms with competitive interest rates. If you’re approved, this lender may be able to fund your loan the same day. Also, it accepts co-borrowers, which can help you qualify for lower rates if your credit falls short.
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The lender offers several opportunities for rate discounts, including:
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- 0.25 percentage points for enrolling in autopay;
- 0.25 percentage points for setting up direct deposit into a SoFi Checking or Savings account
- If you pay a one-time origination fee of up to 6%
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If you lose your job involuntarily and can’t make loan payments, SoFi’s Unemployment Protection program can modify your payments and may even help you find your next role.
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That said, there are some downsides to consider. SoFi only issues loans in 29 states, plus D.C. A credit score of 680 is required to qualify on your own, and you’ll have to borrow at least $5,000, which may be more than you need.
Pros
- Competitive rates
- Co-borrowers accepted
- Forbearance available
Cons
- Not available in every state
- High minimum loan amount
- Good credit required
Who should consider it
Borrowers who want to consolidate a large amount of debt and can qualify for the lender’s lowest rates.
*Rates as of Nov. 14, 2023, assume autopay discount
Oportun
Best for borrowers with bad credit
APRs
29.49% to 35.99%*
Loan amounts
$300 to $10,000
Minimum credit score
None
4.4/5
Why we picked it
Oportun serves borrowers who have difficulty getting approved with other lenders, including those with bad credit, no credit score or previous bankruptcy filings. This lender also allows cosigners, and if you’re a California resident, you can apply for a larger secured loan (up to $18,000) if you own your vehicle outright and are willing to offer it as collateral.
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But Oportun has some notable downsides. Loan amounts are very low — new customers can typically only borrow up to $5,500, while returning customers may access up to $10,000. The rates are also high relative to competitors and rivaling (and even exceeding) some credit cards. Even borrowers with excellent credit can expect rates above 30%. So, depending on the type of debt you’re trying to consolidate, an Oportun loan may not make sense.
Pros
- Accepts applicants with no credit
- May accept applicants with previous bankruptcies
- Cosigners accepted
Cons
- High APRs
- Small loan amounts
- Administrative fee or tax stamp charged upon approval
Who should consider it
Borrowers with bad credit who want to consolidate a small amount of high-interest debt, like payday loans (though First Tech Federal Credit Union, below, may also be a good option in this situation).
*Rates as of Nov. 14, 2023
Best Egg
Best for secured loans
APRs
8.99% to 35.99% (unsecured), 5.99% to 29.99% (secured)*
Loan amounts
$2,000 to $50,000
Minimum credit score
640
Why we picked it
In addition to the standard unsecured loan, Best Egg also offers a secured loan — a personal loan backed by collateral. In this case, your loan is secured by the fixtures in your home (such as vanities and built-in cabinets), rather than the house itself. Many secured loans accept assets or vehicles as collateral, but you can only secure a Best Egg loan with home fixtures. To qualify, you must be a homeowner with sufficient equity, but Best Egg’s secured loan has much lower interest rates.
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This lender offers quick funding (they note that it can take just 24 hours) and their APRs can be under 10.00% for qualified borrowers. Best Egg will also use your loan funds to repay debts on your behalf, streamlining the debt consolidation process.
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Like any financial product, a Best Egg loan has drawbacks. For example, the $50,000 loan maximum isn’t available everywhere — in many states, the most you can borrow is $35,000. Plus, the minimum loan amount is quite high in some states, like Massachusetts, where you must borrow at least $6,500. You’ll also pay an origination fee of up to 8.99% of your loan amount.
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You’ll need good credit to qualify for these loans (a FICO score of at least 640), but to access this lender’s lowest rates, you’ll need a 700 credit score and at least $100,000 in annual income.
Pros
- Quick funding
- Secured loan option with low rates
- Direct payments to creditors
Cons
- High origination fee (up to 8.99%)
- Inflexible loan amounts
- Good credit required
- Homeownership required
Who should consider it
Homeowners with good credit who want a faster and safer option than a home equity loan.
*Rates as of Nov. 14, 2023
PenFed Credit Union
Best for low rates and fees
APRs
7.99% to 17.99%*
Loan amounts
$600 to $50,000
Minimum credit score
Undisclosed
Why we picked it
PenFed allows you to change your loan payment date, doesn’t charge origination fees and can provide funds within one to two days of loan approval.
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If you don’t qualify for a PenFed loan on your own, you can apply for a joint loan with a creditworthy co-borrower. Credit union membership is required for loan approval, but becoming a member is easy — all you need to do is open a PenFed savings account and deposit at least $5.
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However, the age of your PenFed membership is considered during the application process, so you may receive a higher APR if you’re a new member. Also, loan terms are limited to five years, which may be too restrictive, especially if you need the maximum $50,000 loan amount.
Pros
- Competitive interest rates
- No origination fees
- Quick funding
- Allows joint loans
Cons
- Credit union membership required
- Unclear credit requirements
- No autopay discount
- Longest available loan term is five years
Who should consider it
Borrowers who qualify for PenFed’s lowest rate alone or with a co-borrower.
*Rates as of Nov. 14, 2023
Laurel Road
Best for pre-qualification
APRs
9.49% to 24.25%*
Loan amounts
$5,000 to $45,000
Minimum credit score
Undisclosed
4.1/5
The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.
Why we picked it
Many debt consolidation loans come with a maximum APR of nearly 36%, making borrowing expensive. But Laurel Road’s debt consolidation loans offer competitive rates — its highest APR is 24.25% — and you can receive a rate discount of 0.25 percentage points by signing up for autopay.
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If you struggle to qualify for this lender’s lowest rates, you can apply with a creditworthy cosigner to strengthen your application. When you combine Laurel Road’s reasonable rates with its lack of origination fee, this lender could be a good option for debt consolidation.
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However, there can be some considerable drawbacks. Many lenders offer same- or next-day funding, but it can take Laurel Road seven business days or more to disburse loan funds after approval. If you’re looking for a small loan, this lender may not be a good match — it requires that you borrow at least $5,000.
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Laurel Road doesn’t disclose its eligibility requirements, but you can get pre-qualified to preview rates and check your eligibility without a hard credit pull.
Pros
- Competitive maximum APR
- No origination fees
- Allows cosigners
Cons
- High minimum borrowing amount
- Unclear eligibility requirements
- Slow funding timeline
Who should consider it
Borrowers with excellent credit who don’t need funds immediately.
*Rates as of Nov. 14, 2023
OneMain Financial
Best for fast funding
APRs
18.00% to 35.99%*
Loan amounts
$1,500 to $20,000
Minimum credit score
Undisclosed
4/5
Why we picked it
OneMain Financial offers unsecured and secured personal loans and a fully online application process. However, if you prefer an in-person experience, this lender has 1,400 branches in 44 states.
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OneMain Financial really shines when it comes to approval and funding speed — the entire process, from application to funding, can be completed in a single day. Once you sign your loan contract, this lender may disburse funds in as little as an hour.
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However, the downsides to a OneMain Financial loan are significant: high APRs (even for excellent-credit borrowers), an origination fee that may be as high as 10% and small loan amounts. Loan amounts are even less flexible in some states — borrowers in Maine, for example, can only borrow up to $7,000. This lender doesn’t specify its credit score requirement, so you’ll have to get pre-qualified to determine whether you’re eligible.
Pros
- Quick funding
- Secured loan option
- Option to change your due date
- In-person service in most states
Cons
- High APRs
- Potentially high origination fees (up to 10%)
- Small loan amounts
- Unclear eligibility requirements
Who should consider it
Borrowers who want quick access to cash to consolidate a small amount of debt.
*Rates as of Nov. 14, 2023
LendingClub
Best for direct creditor payments
APRs
9.57% to 35.99%*
Loan amounts
$1,000 to $40,000
Minimum credit score
600
3.9/5
The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.
On Credible’s Website
Why we picked it
LendingClub will use your loan funds to repay up to 12 creditors on your behalf, simplifying the debt consolidation process. Or, if you prefer to pay off your debts yourself, this lender can deposit funds into your account — though you may receive lower rates with direct creditor repayment.
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LendingClub has a low credit score requirement of just 600, but if you can’t access the lowest rates on your own, you can add a co-borrower with strong credit to your application.
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However, LendingClub charges origination fees that range from 3% to 8% of your loan amount, and unlike most lenders, it doesn’t offer a discount for enrolling in autopay. Most notable is its high maximum APR of 35.99%. Unless you qualify for this lender’s lowest rates or have debt with higher APRs, you may not save much money on debt consolidation with LendingClub.
Pros
- Direct payments to creditors
- Allows joint loans
- Accessible credit requirements
Cons
- High maximum APR
- Origination fees (3% to 8%)
- No autopay discount
Who should consider it
Borrowers who want the ease of direct creditor repayment during debt consolidation (though Best Egg and PNC Bank, among other lenders, also offer this feature).
*Rates as of Nov. 14, 2023
First Tech Federal Credit Union
Best for small loans
APRs
8.99% to 18.00%*
Loan amounts
$500 to $50,000
Minimum credit score
Undisclosed
3.9/5
Why we picked it
First Tech Credit Union’s loans can accommodate both small-loan borrowers as well as those who need a substantial amount, and its rates start under 10.00%. In addition to offering flexibility in loan amounts, this lender offers repayment terms ranging from 24 to 80 months. First Tech doesn’t charge origination fees for its loans, though it may charge a late fee and a $28 returned check fee.
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Although the credit union doesn’t disclose its credit score requirements, it claims to work with “all credit types.” If your credit score is low, First Tech allows you to apply with a cosigner or co-borrower to boost your chances of approval. Remember that its lowest APRs will likely go to borrowers with excellent credit.
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Perhaps the biggest drawback is that you must become a credit union member to be eligible for a loan. Membership is limited to borrowers in certain Oregon communities, but consumers in other states can qualify for membership by joining the Financial Fitness Association ($8 per year) or becoming a sustaining member of the Computer History Museum ($15 per year).
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Also, First Tech’s pre-qualification process only displays potential rates and terms for a two-year loan — you’ll have to formally apply to see if you qualify for a loan with a different term.
Pros
- Wide range of loan amounts and terms
- No origination fee
- Cosigners and co-borrowers allowed
Cons
- Credit union membership required
- Branch locations only in 8 states
- Pre-qualification only applies to two-year loans
Who should consider it
Borrowers looking for a small loan amount or flexible repayment term options.
*Rates as of Nov. 14, 2023
PNC Bank
Best for flexible repayment terms
APRs
7.89% to 31.99%*
Loan amounts
$1,000 to $35,000
Minimum credit score
Undisclosed
3.8/5
Why we picked it
PNC Bank’s loan terms are flexible, ranging from six to 60 months. Although PNC doesn’t specify its eligibility criteria, it does offer joint loans — so if your credit scores need work, you can apply with a co-borrower who has solid credit. This lender’s lowest APR is competitive and doesn’t include an origination fee.
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To facilitate the debt consolidation process, PNC Bank offers direct creditor repayment. Be prepared to supply information on your debts, including creditor names, loan balances and monthly dues.
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On the flip side, those with poor or fair credit may find that PNC’s rates don’t offer enough opportunity for savings since the maximum rate is 31.99%. Also, if you’re not an existing bank customer, you may have to visit a branch to sign your loan documents, limiting accessibility to borrowers who don’t live near a branch location. PNC Bank has more than 2,600 branches in 28 states, plus D.C., and product and feature availability vary by state.
Pros
- Flexible loan terms
- Direct creditor payments
- Joint loans allowed
- No origination fee
Cons
- May require an in-person visit to finalize loan
- Account features and rates vary by location
- Low maximum loan amount
- High maximum APR
Who should use it
Borrowers who live near a PNC branch and are looking for a short-term, smaller loan.
*Rates as of Nov. 14, 2023, assume autopay discount
Navy Federal Credit Union
Best for military families
APRs
8.99% to 18.00%*
Loan amounts
$250 – $50,000
Minimum credit score
Undisclosed
3.7/5
The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.
Why we picked it
Navy Federal Credit Union (NFCU) offers competitive APRs and accepts applicants with limited credit histories, making this lender a solid choice for debt consolidation. If you can’t qualify for a loan on your own, this lender offers joint loans — in fact, a co-borrower may be required depending on your credit history and requested loan terms.
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NFCU provides flexible loan amounts, same-day funding and rate discounts for autopay and active duty service members (assuming direct deposit).
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However, you’ll need to be a credit union member to qualify, and membership is limited to active duty members of the armed forces, veterans, retired military members, Department of Defense (DOD) personnel and immediate family members.
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Plus, the lowest APR you can get with a term of 37 months or longer is 15.29%, so you’ll need to commit to a shorter repayment term to access Navy Federal’s lowest rates. This lender doesn’t offer pre-qualification — a hard credit pull is required to see if you qualify.
Pros
- Accepts those with limited credit histories
- Joint loans
- Same-day funding available
- Rate discounts for autopay and active duty service members
Cons
- Membership requires military or DOD affiliation
- Unspecified credit requirements
- Must agree to a hard credit inquiry to check rates and eligibility
- Lowest rates are for shortest terms
Who should consider it
Military service members and their families can access low rates and attractive features.
*Rates as of Nov. 14, 2023, assume discounts
Our picks at a glance
| Lender | Rating | APRs* | Repayment terms | Loan amounts |
|---|---|---|---|---|
SoFi | 5 | 8.99% to 25.81% | 24 to 84 months | $5,000 to $100,000 |
Oportun | 4.4 | 29.49% to 35.99% | 12 to 60 months | $300 to $10,000 |
Best Egg | 4.2 | 5.99% to 35.99% | 36 to 60 months | $2,000 to $50,000 |
PenFed Credit Union | 4.1 | 7.99% to 17.99% | 12 to 60 months | $600 to $50,000 |
Laurel Road | 4.1 | 9.49% to 24.25% | 36 to 60 months | $5,000 to $45,000 |
OneMain Financial | 4 | 18.00% to 35.99% | 24 to 60 months | $1,500 to $20,000 |
LendingClub | 3.9 | 9.57% to 35.99% | 36 to 60 months | $1,000 to $40,000 |
First Tech Credit Union | 3.9 | 8.99% to 18.00% | 24 to 80 months | $500 to $50,000 |
PNC Bank | 3.8 | 7.89% to 31.99% | 6 to 60 months | $1,000 to $35,000 |
Navy Federal Credit Union | 3.7 | 8.99% to 18.00% | 12 to 60 months | $250 to $50,000 |
* Rates as of Nov. 14, 2023 and may assume discounts
Why get a debt consolidation loan?
- Simplify payments. Combining multiple monthly debt payments into a single consolidation loan streamlines your finances and reduces the chance of missing a payment.
- Save money. If you qualify for a debt consolidation loan with a lower APR than your existing rate, you can save money on interest each month and in the long run.
- Expedite payoff. If you select a shorter term than you have on your existing debt, you could get out of debt faster. This is especially true if you’re consolidating credit card (or other revolving) debt with no set repayment end date.
- Improve credit over time. Making loan payments on time and in full is the best way to boost your credit score. Plus, using loan funds to pay off revolving debts, like credit cards, can improve your credit utilization ratio, which should also help your score.
What is a debt consolidation loan?
Debt consolidation involves using a lump-sum personal loan to repay multiple creditors, rolling your debts into a single payment. If you qualify for a lower APR than the average rate of your current debts, you can save money and potentially pay off your debts faster. Debt consolidation loans are commonly offered at banks, credit unions and online lenders, but be careful — rates can be as high as 36%, so borrowers with poor credit may not save much money with this strategy.
How do debt consolidation loans work?
When you borrow a debt consolidation loan, you use funds to pay off your existing high-interest debts, like credit card balances. Then, you repay the loan in fixed installments over a set term, commonly 12 to 60 months. In many cases, lenders will repay your creditors on your behalf, so you don’t have to worry about handling that part of the process.
Debt consolidation loans are a type of personal loan. As such, eligibility is based on your creditworthiness — borrowers with excellent credit are more likely to qualify and can access competitive rates, while bad-credit borrowers can expect high APRs, if they qualify at all. That said, you could overcome poor or fair credit by recruiting a co-applicant — either a cosigner or co-borrower — who would share the legal responsibility of repayment.
Let’s say you have $20,000 in credit card debt with an 18.00% APR and $600 in monthly dues. It would take 46 months to pay off your balance, and you’d pay $7,427 in interest alone (assuming you didn’t make additional charges). But, if you were to get a debt consolidation loan with an 11.00% APR and a 36-month term, you’d only pay about $3,572 in interest. It would bump your monthly payment to $655, but you’d be out of debt faster and save more money long-term.
Pros and cons of debt consolidation loans
| Pros | Cons |
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The main feature that attracts borrowers to debt consolidation loans is the opportunity to get out of debt faster and possibly save money in the process. You can drastically lower your long-term costs if you opt for a short loan term and qualify for a lower APR.
When juggling multiple debt payments, it can be easy to miss one and damage your credit scores — a debt consolidation loan streamlines repayment. And by making payments on time and using the loan to pay off revolving credit, you can boost your credit scores in the long run.
Of course, there can be drawbacks. For example, if you need a longer repayment term to make the monthly payments affordable, you’ll pay more interest overall, increasing your total cost of borrowing.
Also, you’ll typically need good credit (670 or higher) to qualify, and if your credit score is low, you may end up with a high APR, which may defeat the purpose of the loan. Plus, if you’re looking to save money in the long term, you may have to pay more each month to accomplish that goal. Use a debt consolidation calculator (like Calculator.net’s) to determine whether this strategy is right for you.
Keep in mind that a debt consolidation loan doesn’t solve the root cause of debt — if overspending is a problem, you may find yourself back where you started.
Alternatives to debt consolidation loans
If you don’t want a debt consolidation loan or it just isn’t the right choice, you have other options. Here’s a quick overview of four alternatives and who they’re best for:
| Alternative | Details | Best for |
|---|---|---|
Home equity loan | Borrow against your home’s equity to receive a lump sum, using your property as collateral. If you default on the loan, you risk losing your home. (A home equity line of credit or HELOC works similarly, except you can draw on funds as needed and only pay interest on what you borrow.) | Homeowners with sizeable equity, at least 15% to 20% |
Balance transfer card | Transfer multiple balances onto a single card to streamline repayment. These cards come with promotional interest-free periods (such as 0% APR for 12 months), but you’re likely to pay a fee of up to 5% of the transferred amount. | Borrowers with excellent credit who can pay off the balance before the promotional period ends |
Credit counseling | Work with a qualified credit counselor to create a new budget and potentially enroll in a debt management plan, which can help you fully repay your debt in three to five years. | Borrowers who can’t afford their monthly payments and want to learn how to better manage their debt |
Debt settlement | Negotiate with your creditors to reduce the amount owed. This option may help you avoid bankruptcy, but it can damage your credit, and there’s no guarantee that your creditors will agree to settle. | Borrowers who want to avoid bankruptcy and have no other options |
How to get a debt consolidation loan
- Assess your debts. To find the best lender for you, understand exactly how much money you need to borrow and how much you currently pay in interest. Start by reviewing each debt account and making note of your current balances and APRs.
- Check your credit. Lenders primarily base your debt consolidation loan eligibility on your creditworthiness, so check your credit scores to ensure you qualify for affordable rates and favorable terms. Many credit card companies provide free access to your credit score, and you can review your credit reports from all three credit bureaus at AnnualCreditReport.com.
- Gather your documents. Typically, you’ll need to provide documentation to verify your identity (like a Social Security number and form of ID) and income (like pay stubs or W-2s). Many lenders can repay your creditors directly, so gather information on each of your debt accounts, including creditor names, account numbers and debt balances.
- Get pre-qualified. This can give you an idea of the rates and terms you might qualify for without hurting your credit. (These aren’t formal offers, and your rates and terms may change if you formally apply.) This process can help you narrow your list of potential lenders. Consider factors like APRs, loan amounts, repayment terms, funding timeline and eligibility requirements.
- Apply with your preferred lender. When you’ve found a lender that meets your borrowing needs, submit a formal application. In addition to providing your verification documents, you’ll have to agree to a hard credit inquiry, which can temporarily cause your credit score to drop by about five points. Some lenders offer loan decisions in minutes, while others may take up to a week to process your application.
- Sign your loan documents. If your application is approved, you must sign a loan contract to finalize your loan. Before signing on the dotted line, carefully review the repayment terms.
- Consolidate your debt and begin repayment. Your lender may disburse loan funds the same day you’re approved, but if you opt for direct creditor repayment, it can take a few weeks for your lender to finalize debt payments. Be sure to use your loan funds for their intended purpose (repaying debt), and start paying your debt consolidation loan on the outlined schedule.
Methodology
To determine the best debt consolidation loans, our data research and analysis team gathered nearly 900 data points from 35 primary sources, including lender websites and independent organizations like the Consumer Financial Protection Bureau (CFPB) and the Better Business Bureau (BBB). In partnership with our editors, we analyzed data for 32 lenders across the following five categories to narrow our list to the 10 best lenders for debt consolidation.
Rates (25%)
For many borrowers, the goal of debt consolidation is to save money. To that end, it’s critical that the lenders we feature offer competitive rates and opportunities for rate discounts.
Loan details (20%)
We examined the basics of each loan product to produce an apples-to-apples comparison. We assessed details like:
- Loan amounts
- Funding timelines
- Applicable fees
- Direct-to-creditor payments
Eligibility and accessibility (25%)
In our estimation, the best debt consolidation loan is available to a wide variety of borrowers. In this category, we assessed eligibility criteria, such as credit score and income requirements, and accessibility metrics, like geographic availability and citizenship requirements.
Repayment (20%)
When you’re consolidating debt, ease of repayment is often top of mind. To judge lenders in this category, we considered factors like the flexibility of repayment terms, hardship options and credit reporting policies.
Customer experience (10%)
In this final category, comprising eight data points, we aimed to capture the quality of each lender’s customer service. We reviewed data from independent organizations like the BBB and the CFPB, and analyzed service features like whether the lender offers a mobile app or provides weekend customer service.
What didn’t make the cut
We reviewed 32 lenders to determine the 10 best companies for debt consolidation. Some popular lenders didn’t measure up in various categories, including the following three financial institutions that offer debt consolidation loans:
| Lender | Rating | Room for improvement |
|---|---|---|
Avant | 3.7 |
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Discover | 3.6 |
|
Happy Money | 3.0 |
|
Frequently asked questions (FAQs)
Loan approval requires a hard credit pull, which can temporarily decrease your credit score by about five points. If you use the loan for its intended purpose and don’t take on additional debt, timely repayment should increase your score in the long run.
Application processing and funding timelines vary by lender, but you can generally get a personal loan for debt consolidation within about a week of applying. If you need to speed up the process, prioritize lenders that offer faster processing times. Gathering your application materials, such as income and identity verification, ahead of time can also expedite the process.
You could use a balance transfer credit card to consolidate your credit card debt. These cards come with limited-time 0% APR periods, which can run anywhere from six to 21 months. The key is qualifying for a high enough credit limit and paying off the balance before the promotional period ends. Credit counselor-sponsored debt management plans and debt settlement negotiations are other options worth exploring.
I've been deeply immersed in the realm of personal finance for quite some time, so I can confidently delve into the nuances of managing multiple debts and the intricacies of debt consolidation. Let's break down the concepts used in the article:
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Credit Card Debt Statistics: The article starts by highlighting the prevalence of credit card debt, citing data from TransUnion and the Federal Reserve. This establishes the context for the importance of debt consolidation.
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Debt Consolidation Loan: The central concept discussed is the debt consolidation loan, where multiple high-interest debts are combined into a single loan with a potentially lower interest rate. This loan is typically a lump-sum personal loan used to pay off existing debts.
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Benefits of Debt Consolidation: The article outlines several advantages of debt consolidation, such as simplifying payments, saving money on interest, expediting payoff, and potentially improving credit over time.
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How Debt Consolidation Works: It explains the mechanics of debt consolidation, where borrowers use loan funds to pay off existing debts, then repay the consolidation loan in fixed installments over a specified term.
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Pros and Cons of Debt Consolidation: This section discusses the benefits and drawbacks of debt consolidation. While it streamlines payments and can save money, it may require good credit to qualify and could lead to higher monthly payments depending on the loan term.
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Alternatives to Debt Consolidation Loans: The article explores alternatives to debt consolidation loans, including home equity loans, balance transfer cards, credit counseling, and debt settlement.
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How to Get a Debt Consolidation Loan: It provides a step-by-step guide on obtaining a debt consolidation loan, from assessing debts and checking credit to applying and consolidating debt.
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Methodology for Selecting Lenders: Finally, it outlines the methodology used to select the best debt consolidation lenders, considering factors like interest rates, loan details, eligibility, repayment terms, and customer experience.
Each lender highlighted in the article is evaluated based on criteria such as APRs, loan amounts, credit score requirements, repayment terms, funding timelines, and customer support. This comprehensive analysis aims to guide borrowers in choosing the most suitable option for their financial needs and circ*mstances.
