Best Debt Consolidation Loan Companies
If you're struggling with high-interest credit card debt and other bills, a debt consolidation loan can help you pay it off. These are a type of personal loan that help consumers eliminate their credit card balances while paying down debt with a fixed interest rate and a single monthly payment. The often lower rates help individuals pay less in interest each month, which makes the debt repayment process more affordable.
The best debt consolidation loans come with the lowest possible rates, several repayment options to choose from and no hidden fees.
To make our top choices, our research team evaluated 31 personal loan lenders and selected seven based on factors including minimum credit score required, maximum annual percentage rate (APR) and if creditors are paid directly. Our picks may be Authorized Partners who compensate us. This does not affect our recommendations or evaluations.
- Our top pick: Discover Personal Loans
- Our pick for bad credit: Upgrade
- Our pick for low fees: Marcus by Goldman Sachs
- Our pick for credit card debt: Achieve Personal Loans
- Our pick for high loan amounts: SoFi
- Our pick for quick funding: LendingClub
- Our pick for available with a co-signer: OneMain Financial
- Our recommendations are based on what reviewers say.
- 4,243,139 reviews on ConsumerAffairs are verified.
- We require contact information to ensure our reviewers are real.
- We use intelligent software that helps us maintain the integrity of reviews.
- Our moderators read all reviews to verify quality and helpfulness.
 Discover Personal Loans |  Upgrade |  Marcus by Goldman Sachs |  Achieve Personal Loans |  SoFi |  LendingClub |  OneMain Financial | |
|---|---|---|---|---|---|---|---|
| Rating | 1.5 | 4.8 | 3.7 | 4.1 | 3.8 | 4.0 | 4.0 |
| # of reviews | 25 | 622 | 32 | 524 | 125 | 337 | 3,137 |
| Our recommendation for | Overall | Bad credit | Low fees | Credit card debt | High loan amount | Quick funding | Co-signer |
| Minimum credit score | Not disclosed | 560 | 660 | 670 | 650 | 600 | Varies |
| Maximum loan amount | $35,000 | $50,000 | $40,000 | $50,000 | $100,000 | $40,000 | $20,000 |
| Pays creditors directly | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Read Reviews | Read Reviews | Read Reviews | Read Reviews | Read Reviews | Read Reviews | Read Reviews |
Compare our top 7 picks for best debt consolidation loans
- Maximum loan amount: $35,000
- Minimum credit score: 660
- Repayment terms: 36 to 84 months
- User star rating: 1.5
If you need to consolidate credit card balances, medical bills, high-interest loans or other debts, consider using Discover Personal Loans. Discover offers debt consolidation loans in amounts up to $35,000, and you can opt to repay your loans over 36 to 84 months. This broad range of repayment terms gives you options, including choosing a longer repayment term to get a lower monthly payment.
Discover loans come with no origination fees or hidden fees, and APRs range from 6.99% to 24.99% based on creditworthiness. Individuals can check their rates and gauge their approval odds online before they apply. Borrowers may receive funds as soon as the next business day.
In addition to personal loans for debt consolidation, Discover also offers student loan refinancing, home equity loans, cash-out refinancing and balance transfers to Discover credit cards.
- What we like
- Rate check is available with no impact to credit score.
- Loan amounts up to $35,000 are available for eligible borrowers.
- Repayment terms are available for up to 84 months.
- What to consider
- Discover does not disclose its minimum credit score requirements.
- There’s a lower maximum loan amount, so it might not work for those with a lot of debt.
- What reviewers are saying
- ConsumerAffairs does not have any reviews for Discover Personal Loans.
Partner Disclosures
Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at https://www.upgrade.com/bank-partners/.
- Maximum loan amount: $50,000
- Minimum credit score: 560
- Repayment terms: 24 to 84 months
- User star rating: 4.8
Upgrade is an online lender that offers debt consolidation loans and other financial products to people with all credit profiles, including consumers with credit scores as low as 560. This means that even borrowers with poor credit are eligible for debt consolidation loans.
You can borrow anywhere from $1,000 to $50,000, depending on your needs, and you can repay your loan over 24 to 84 months. The company will pay your creditors directly, and co-signers are permitted.
As of this writing, APRs for loans from Upgrade fall between 8.49% to 35.99% based on creditworthiness, and it's worth noting that an origination fee applies. There is also a $10 failed payment fee. If you’re interested in a loan from Upgrade, you can check your rate with no impact to your credit before applying.
- What we like
- Personal loans are available to consumers with all credit scores.
- Repayment terms are flexible.
- Borrowers can access up to $50,000 for debt consolidation.
- You can check your rate without it affecting your credit.
- What to consider
- Loans from Upgrade require an origination fee of up to 8.99%.
- APRs for bad credit can be high (up to 35.97% APR).
- What reviewers are saying
- Positive reviews center on the fast and easy loan process and the company's helpful customer service representatives. Sharon, a reviewer from Winnsboro, Louisiana, reported this about the Upgrade experience: “I am very impressed with the way Upgrade handled my loan process. It was easy to apply; there were no hoops or issues to get through. I was kept informed of the process, and the loan went through quickly.”
- Maximum loan amount: $40,000
- Minimum credit score: 660
- Repayment terms: 36 to 72 months
- User star rating: 3.7
Marcus by Goldman Sachs makes it possible for borrowers to access $3,500 to $40,000 in loan funds with the option to repay over 36 to 72 months. The minimum credit score is 660, which means applicants with good to excellent credit have the best chance to qualify. Borrowers are able to use loans for a variety of purposes, including debt consolidation. The company will issue payments directly to creditors, making it an easier process for borrowers.
Loans from Marcus by Goldman Sachs do not have any origination, late, prepayment or other fees. However, consumers do need to sign up for auto-pay to secure the lowest advertised rates. As of this writing, rates range between 6.99% to 24.99% and are based on creditworthiness.
- What we like
- Loans are fee-free.
- Borrowers can qualify to skip a payment once they have made 12 consecutive on-time payments toward their loan.
- Several repayment plans are available.
- What to consider
- Minimum loan amount starts at $3,500, which is higher than at many competitors.
- Loans are only available for people with good credit.
- Auto-pay is required for the best rates.
- What reviewers are saying
- Many reviewers have raved about the company's fast funding process and stellar customer service. Craig from New York City said, “My loan was able to pay off three accounts in full and pay off a large chuck of other balances that were haunting me every month. My one monthly payment along with not using these credit cards has made my credit score go from good to excellent in seven months!”
Note that several reviewers left negative remarks about poor customer service and payments posting too slowly to their accounts.
Partner Disclosures
All loans available through Achieve Personal Loans (NMLS ID #227977) are originated by Cross River Bank (a New Jersey state chartered commercial bank) or Pathward, N.A. (Equal Housing Lenders) and may not be available in all states. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Minimum loan amounts vary due to state-specific legal restrictions – please call an Achieve Personal Loans consultant for further details. Loan amounts generally range from $5,000 to $50,000 including origination fees, and are offered based on loan purpose and underwriting conditions. Repayment periods range from 24 to 60 months. APRs range from 7.99% to 35.99% APR and include applicable origination fees. Example loan: four-year $20,000 loan with a rate of 15.49% and corresponding APR of 18.34%, would have an estimated monthly payment of $561.60 and a total cost of $26,956.80. To qualify for a 7.99% APR loan, a borrower will need excellent credit, a loan amount for $12,000.00 or less, and a term of 24 months. Loan origination fees vary from 1.99% to 5.99%. Adding a co-borrower with sufficient income; using at least 85% of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could also help you qualify for lower rates. Average interest savings for personal loans range from 0% - 6% based on closed loans that qualified for one or more of our rate discounts in July 2022. †Times noted are estimates and can vary for a loan request from Achieve Personal Loans (NMLS #227977). Same day approvals assume that a fully completed application with all required supporting documentation is provided early enough on a day that our offices are open. Achieve Personal Loans consultants are available Monday–Friday 6AM to 8PM MST and Saturday–Sunday 7AM to 4PM MST.
- Maximum loan amount: $50,000
- Minimum credit score: 620
- Repayment terms: 24 - 60 months
- User star rating: 4.1
Achieve Personal Loans lets borrowers access between $5,000 to $50,000 in loan funds for any reason, including debt consolidation. Repayment terms last from 24 - 60 months, and rates range from 7.99% to a maximum of 29.99%, depending on creditworthiness. An origination fee of 1.99% to 4.99% of the loan amount applies.
While Achieve Personal Loans does publish a minimum credit score of 620, it says it goes beyond your credit report when evaluating your loan application. Borrowers may get approved as soon as the same day they apply, and loan funds can be sent in as little as 24 to 72 hours.
In addition to flexible loan terms and competitive rates, those with a high amount of credit card or other unsecured debt can take advantage of the higher loan limit. Additionally, co-signers are allowed for borrowers with lower credit scores.
- What we like
- Rates are competitive, especially for borrowers who can qualify for the best terms.
- Achieve Personal Loans offers loan amounts up to $50,000 for debt consolidation and other purposes.
- Applicants can get approved as soon as the same business day.
- Achieve Personal Loans allows applicants to apply with a co-signer.
- What to consider
- Achieve Personal Loans charges an origination fee between 1.99% and 4.99%.
- The minimum loan amount is $5,000, which is higher than at many competitors.
- What reviewers are saying
- Many customers praise the company for its fast and easy loan process and knowledgeable loan experts. Daniel from Fort Worth, Texas, said, “Customer service went above and beyond. Would definitely tell others about you guys. Very friendly and made it a very easy and pleasant experience.” Some reviewers did, however, feel that Achieve Personal Loans did not work with them on their payment amount when they fell on hard financial times.
- Maximum loan amount: $100,000
- Minimum credit score: 650
- Repayment terms: 24 to 84 months
- User star rating: 3.8
SoFi has been a leader in the student loan and student loan refinancing space since its founding in 2011, and the company also offers investment accounts and popular personal loans. Its loans come in amounts ranging from $5,000 to $100,000, so they can work for borrowers with considerable debts to consolidate. APRs range from 7.99% to 23.43% with auto-pay, and loan terms can last from 24 to 84 months.
SoFi personal loans have no fees of any kind, including late and origination fees. Same-day funding is possible, and you can check your rate with no impact to your credit score.
If you opt to use SoFi’s Direct Pay option, the company will pay your lenders directly and you’ll receive a 0.25% APR discount. Co-borrowers are allowed as long as they live at the same address.
- What we like
- Loans from SoFi come in higher amounts than other lenders offer.
- There are no origination fees or hidden fees.
- SoFi loans come with unemployment protection, so you can get a break on loan payments if you lose your job.
- What to consider
- Minimum loan amounts start at $5,000 and may be higher in certain states.
- Borrowers need good credit to qualify for the best rates.
- What reviewers are saying
- Its most satisfied customers say they got a loan with a great rate and are happy with their experience. One customer, Bob from Annapolis, Texas, commented on his experience with SoFi: “Opened a debt consolidation loan. Got offers from other lenders at 20% or more (how does a D/C loan at 20% make any sense?). Sofi came through with an offer at a reasonable rate, much to my surprise, and I jumped on it. All done through website and email. Speed, accuracy, ease, all words to describe transaction. Can't say enough good.”
However, some reviewers say getting their loan approved took too long, and others were displeased with SoFi customer service.
Partner Disclosures
Between January 2023 and March 2023, Personal Loans issued by LendingClub Bank were funded within 44 hours after loan approval, on average. 31% of Personal Loans issued by LendingClub Bank during the same period were funded within 24 hours after loan approval. Loan approval, and the time it takes to issue a credit decision, are not guaranteed and individual results vary based on creditworthiness and other factors, including but not limited to investor demand. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $16,769 for a term of 36 months, with an interest rate of 12.74% and a 6.00% origination fee of $1,055, for an APR of 17.12%. In this example, the borrower will receive $15,763 and will make 36 monthly payments of $563. Loan amounts range from $1,000 to $40,000 and loan term lengths range from 24 months to 60 months. Some amounts, rates, and term lengths may be unavailable in certain states. For Personal Loans, APR ranges from 9.57% to 36.00% and origination fee ranges from 3.00% to 6.00% of the loan amount. APRs and origination fees are determined at the time of application. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of April 14, 2023 and are subject to change without notice. Unless otherwise specified, credit products are provided by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Only deposit products are FDIC-insured. LendingClub Bank is not an affiliate of Consumer Affairs and is not responsible for the products and services provided by Consumer Affairs. Credit products are subject to credit approval and may be subject to sufficient investor commitment. If a credit union is selected to invest in the loan, credit union membership will be required. Certain information that LendingClub Bank subsequently obtains as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that you request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan. Loan closing is contingent on accepting all required agreements and disclosures at https://www.lendingclub.com/. “LendingClub” and the “LC” symbol are trademarks of LendingClub Bank. 2023 LendingClub Bank. All rights reserved.
- Maximum loan amount: $40,000
- Minimum credit score: 600
- Repayment terms: 24 to 60 months
- User star rating: 4.0
LendingClub lets applicants borrow between $1,000 to $40,000 to reach their goals, and a low minimum credit score requirement of 600 means a broader range of consumers can qualify. Repayment terms can last from 24 to 60 months, and current rates offered range from 9.57% to 36%. Note that an origination fee of 3% to 6% of the loan amount applies to every personal loan from LendingClub.
This lender also lets you check your rate with no impact on your credit score. Qualified borrowers may also get same-day funding, which is faster than at many other lenders. In fact, the company states that one-third of borrowers are funded within 24 hours of approval. To speed up the process, you can have funds deposited into your bank account or sent directly to your creditors.
The application process is entirely online. And, like other lenders on this list, co-signers are permitted.
- What we like
- Loans are available to applicants with fair credit to good credit.
- Quick funding is available for the majority of borrowers.
- Repayment terms are flexible.
- There is a low minimum loan amount.
- What to consider
- Origination fees range from 3% to 6%.
- Rates are high for some borrowers (up to 36% APR).
- What reviewers are saying
- Most positive reviews revolve around the company's easy application process and fast funding. D from Sarasota, Florida, said, “Fast service, easy application process. … I’ve had two loans and look forward to doing business with these folks again. With their help, I have increased my credit score considerably. ... thanks, LendingClub.”
However, other customers complain about high origination fees, and a few reported that the application process was not as easy as the company claims.
- Maximum loan amount: $20,000
- Minimum credit score: Varies
- Repayment terms: 24 to 60 months
- User star rating: 4.0
OneMain Financial accepts applicants with less-than-perfect credit scores, and it also lets you apply with a co-signer. This can make it easier to get a OneMain Financial loan for debt consolidation, particularly if you can find a co-signer who has a strong income and a good credit score.
Loans from OneMain Financial are offered in amounts from $1,500 to $20,000, and rates range from 18% to 35.99% based on creditworthiness. Repayment terms can last from 24 to 60 months, so you can tailor your monthly payment and repayment plan. Note that OneMain Financial loans can charge origination fees of 1% to 10% of the loan amount.
OneMain Financial also has about 1,400 branches nationwide, so you can get in-person assistance if you need it. You can consolidate debts including credit cards, medical bills and household bills.
- What we like
- You can consolidate different types of debts.
- There are flexible repayment terms.
- The company has physical locations for those borrowers who prefer an in-person experience.
- What to consider
- Origination fees can be up to 10% of the loan amount.
- Rates start much higher than at other lenders on our list.
- What reviewers are saying
- Positive reviews are mostly about the fast loan process and helpful customer service agents. Margaret of Cherry Hill, New Jersey, reported this experience with OneMain Financial: “Very satisfied with the service. … I love the direct deposit of my payment so it is never late monthly. If you need a loan I would recommend One Main Financial.”
Note that some reviewers do state that loans can be difficult to get approved for.
Compare Top Debt Consolidation Companies | ||||||
|---|---|---|---|---|---|---|
Compare
|
Upgrade
Partner DisclosuresPersonal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at https://www.upgrade.com/bank-partners/. | Loan amounts from $1,000 to $50,000, Payback terms of 24 to 84 months. APR from 8.49% to 35.99%. Origination fee can be up to 9.99%. 1% to 2% rewards on checking account purchases. 4.81% APY on savings accounts with $1,000+. | | Get Started | ||
Compare
| Offers fast funding and flexible loan terms. Borrowers can get approved for loans up to $10,000. Approved applications funded as soon as the same business day. Offers lines of credit from $500 to $4,500. APRs vary by state. |  | Learn More | |||
Compare
| Provides personal loans from $3,500 to $40,000. Pay back the loan in fixed payments. APR from 5.99% to 35.99%, with origination fee of 2% to 8% of loan amount. Free credit score monthly. Pause payment for up to 90 days. |  | ||||
Offers debt consolidation, credit card consolidation and debt settlement. No minimum credit score required for approval. Results within minutes. Program is between 12 and 48 months. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Compare
| 24/7 customer service. Simplified application process. Multiple monthly plan options available. Receive funds within 24 hours of approval. Works with customers regardless of their financial history. |  | ||||
Personal loans from $600 to $20,000. Maximum APRs vary by state. Includes a seven-day “no worry guarantee” to return any amount. No prepayment penalty. Small business loans also available. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Charges $89 setup fee. Monthly fees from $79 to $109. Averages 19 points improvement per customer. Does not guarantee specific results. Cancel contract within five days of signing. Not be available in all states. |  | Get a Quote | ||||
Compare
|
Achieve Personal Loans
Partner DisclosuresAll loans available through Achieve Personal Loans (NMLS ID #227977) are originated by Cross River Bank (a New Jersey state chartered commercial bank) or Pathward, N.A. (Equal Housing Lenders) and may not be available in all states. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Minimum loan amounts vary due to state-specific legal restrictions – please call an Achieve Personal Loans consultant for further details. Loan amounts generally range from $5,000 to $50,000 including origination fees, and are offered based on loan purpose and underwriting conditions. Repayment periods range from 24 to 60 months. APRs range from 7.99% to 35.99% APR and include applicable origination fees. Example loan: four-year $20,000 loan with a rate of 15.49% and corresponding APR of 18.34%, would have an estimated monthly payment of $561.60 and a total cost of $26,956.80. To qualify for a 7.99% APR loan, a borrower will need excellent credit, a loan amount for $12,000.00 or less, and a term of 24 months. Loan origination fees vary from 1.99% to 5.99%. Adding a co-borrower with sufficient income; using at least 85% of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could also help you qualify for lower rates. Average interest savings for personal loans range from 0% - 6% based on closed loans that qualified for one or more of our rate discounts in July 2022. †Times noted are estimates and can vary for a loan request from Achieve Personal Loans (NMLS #227977). Same day approvals assume that a fully completed application with all required supporting documentation is provided early enough on a day that our offices are open. Achieve Personal Loans consultants are available Monday–Friday 6AM to 8PM MST and Saturday–Sunday 7AM to 4PM MST. | Loan amounts from $5,000 to $50,000. Select from 24- to 60-month terms. APR from 7.99% to 35.99%. Requires 620 credit score. Origination fee up to 5.99%. No prepayment penalty. | | Get Started Call Center Open (844) 752-5328 | ||
Loan amounts from $1,000 to $47,500. Select from terms between 12 and 60 months. APR is from 4.99% to 29.99%. No minimum credit score. No administration fee and no prepayment penalty. Limited availability. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Loan amounts from $2,000 to $100,000. Secures loans in as little as 24 hours. Call to start an application if you don’t have an eligibility ID. Check your rate without affecting your credit score. Limited availability. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Compare
|
LightStream
Partner DisclosuresYour loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 8.99% APR with a term of 5 years would result in 60 monthly payments of $207.54. Truist Bank is an Equal Housing Lender. © 2023 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank. | Loan amounts from $5,000 to $100,000. Offers a 0.5% APR discount for using automatic payments. Rate Beat program for competitor offers. Minimum credit score varies. No fees or prepayment penalties. |  | Get Started | ||
Analyzes credit to see if you qualify for a line of credit loan with a lower interest rate. Provides app that monitors credit card due dates, minimum payments and interest rates and calculates the best way to pay off debt. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Online marketplace for personal loans between $2,000 and $50,000. APR from 2.49% to 35.99%. Select from terms between 61 days and 180 months. Origination fee up to 8%. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Online lender. Offers fixed-rate, unsecured loans for debt consolidation. Loan amounts up to $45,000. Repayment terms up to five years. No application fees or prepayment penalties. Undisclosed APRs and origination fee. |  | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers personal loans from $2,500 to $35,000, with repayment terms of 36 to 84 months. Rates range from 6.99% to 24.99% APR at publishing. No origination fees. Check your loan options without affecting your credit. | | Chat with a ConsumerAffairs decision guide Live agent | ||||
How to get a debt consolidation loan
According to financial planner Kyle McBrien, who works at Betterment, an online financial advice company, debt consolidation can be a helpful tool for consumers looking to overcome debt, since it helps them pay off multiple debts with a new loan that has a single monthly payment — often at a lower interest rate.
McBrien says applicants need to be sure the new monthly payments do not impact their ability to cover their basic living expenses first, and they should factor in any fees they have to pay. He also recommends checking your credit score before you apply, or at least considering how your current credit standing will impact your rates.
Fortunately, almost all lenders in the personal loan space let borrowers "check their rate" online before filling out a full loan application. This step makes it easy for you to find out how much you could potentially borrow, the rate you would have to pay and the monthly payment options.
Checking your rate with several different lenders helps you compare all your loan options. After finding a loan with a rate and monthly payment you’re comfortable with, you can move forward with a full loan application by providing information such as your Social Security number, date of birth, address, income and employer name. Other information required can include recent pay stubs, government-issued identification and proof of address.
Once a loan application is approved, many lenders will deposit loan funds in an account as soon as the next business day. Some lenders will also pay creditors directly, which can help avoid payment mishaps during the debt consolidation process.
Alternatives to debt consolidation loans
Debt consolidation is not right for everyone, and the numbers may not work if the interest rate is too high. With that in mind, McBrien, of Betterment, says the best solution might simply be "reviewing your personal expenses and creating a tighter budget for yourself.”
However, there may be times when cutting expenses won't be enough to get out of debt. In that case, you can consider the following alternatives:
- Use your home equity: McBrien recommends considering tapping into your home equity if you have some, either with a cash-out refinance, a home equity loan or a home equity line of credit (HELOC). "These strategies allow homeowners to leverage the equity they have built up in their home to create additional cash flow," he said.
- Look into balance transfer cards: Some credit cards let consumers consolidate debt with 0% APR for a limited time, usually up to 21 months. While balance transfer fees apply, these offers can help you save on interest and pay down debt faster.
- Work with a credit counselor: Most credit counseling agencies are nonprofits, and they can help you create a plan to pay off your debt without having to borrow more money.
- Explore debt settlement options: Debt settlement companies help you settle your outstanding debts for less than you owe, although they charge fees for their services, and your credit score could suffer.
Frequently Asked Questions (FAQ)
What is the difference between debt consolidation and debt settlement?
With debt consolidation, all of your debt will be folded into one loan. You’ll still pay the total amount of debt you owe but in one payment. With a debt settlement program, you attempt to reduce the total amount of debt you owe by negotiating with creditors.
Can I get a debt consolidation loan with bad credit?
You can still get a debt consolidation loan with bad credit, but it’s more difficult. Your interest rates will be higher, which means you are less likely to save money.
Are debt consolidation loan companies legit?
There are many legitimate debt consolidation loan companies, including the lenders we ranked in this guide. Review our tips above for finding a reputable lender, and do your due diligence to better understand the results you can expect from a company.
Do debt consolidation loans hurt your credit?
When taking out any new line of credit, you may see a short-term effect on your credit score. However, taking out a personal loan for debt consolidation shouldn't have a long-term, negative impact on your credit if you make your payments consistently and don’t default on the loan.
How much does debt consolidation cost?
The cost of your loan will vary based on the lender. Typical costs include the interest charged over the term of the loan and any origination or other fees the lender charges.
Thank you, you have successfully subscribed to our newsletter!
Methodology
To make our choices for the top debt consolidation loans, we collected 26 individual data points for 31 popular personal loan lenders, including over 10,000 customer reviews and overall ratings from ConsumerAffairs readers submitted between 2020 and 2022. We then used this data to examine the most impactful factors for borrowers.
Customer feedback is a critical indicator when evaluating companies, and we made sure to consider those reviews when making our top picks. However, for those companies on our list with no ratings from ConsumerAffairs, there were other variables that made them stand out for borrowers with bad credit, which factored into our decisions.
- Funding times: We examined how long it takes borrowers to get their money, with higher consideration given to lenders that take less than 48 hours to disburse funds.
- APR: We looked for lenders that have maximum APRs below 36%.
- Flexible repayment terms: We examined payment term ranges and noted which lenders offer repayment terms of at least 36 months (three years) or higher.
- Co-signer allowed: We reviewed if the lender allowed co-signers, and we favored those that allow co-signers or co-borrowers. This is particularly important for borrowers with lower credit scores.
- Pays creditors directly: We looked at all of the debt consolidation loan programs, and we gave a higher score to those that paid borrowers’ creditors directly.
- Fees: We gave higher consideration to lenders with low to no fees, although some of our top picks do have higher origination fees.
All of our top picks offer debt consolidation loans that pay creditors directly, have reasonable APRs, provide quick funding and allow co-signers.
- Article sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page. Specific sources for this article include (example format:
- FICO, "What is a FICO Score?" Accessed Nov. 4, 2022.
- Board of Governors of the Federal Reserve System, "Consumer Credit - G.19." Accessed Nov. 4, 2022.
- Consumer Financial Protection Bureau, "What's the difference between a credit counselor and a debt settlement or debt relief company?" Accessed Nov. 4, 2022.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.
Want your company to be on this guide?
Yes, continueYou’re signed up
We’ll start sending you the news you need delivered straight to you. We value your privacy. Unsubscribe easily.