Best Debt Consolidation Loans in March 2024

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Written by Amanda Push | Edited by Katie Lowery | Updated February 28, 2024

Debt consolidation lenders at a glance

Upstart logo

Upstart: Best for borrowers with bad credit

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APR range7.80% - 35.99%
Loan amounts$1,000 - $50,000
Loan terms36 and 60 months
Origination fee0.00% - 12.00%
Min. credit score300
ProsCons

  Flexible loan ranges

  Able to use loan funds to cover student debt

  May receive funds as quickly as one business day

  Doesn’t offer joint applications or secured loans

  Limited loan repayment terms

  Charges an origination fee (0.00% - 12.00%)

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Reach logo

Reach Financial: Best for quick funding

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(14)
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APR range5.99% - 35.99%
Loan amounts$3,500 - $40,000
Loan terms24 to 60 months
Origination fee0.00% - 8.00%
Min. credit score680
ProsCons

  Access to free monthly credit score

  Flexible loan amounts and terms

  Ability to change due date

  May charge an origination fee

  Limited loan use

  High maximum APR

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Prosper logo

Prosper: Best for peer-to-peer loans

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(3,637)
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APR range8.99% - 35.99%
Loan amounts$2,000 - $50,000
Loan terms24 to 60 months
Origination fee1.00% - 7.99%
Min. credit score560
ProsCons

  Offers quick funding

  Flexible loan amount options

  Peer-to-peer lending alternative to traditional lenders

  Limited options for loan terms

  Charges an origination fee

  Charges late fees

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Wells Fargo logo

Wells Fargo: Best for current Wells Fargo customers

User ratingsUser ratings coming soon
APR range7.49% - 23.24% (with discounts)
Loan amounts$3,000 - $100,000
Loan terms12 to 84 months
Origination feeNo origination fees
Min. credit scoreNot specified
ProsCons

  High maximum loan amount of $100,000

  Charges no origination, closing or prepayment fees

  May be approved within one business day

  High minimum loan amount of $3,000

  May charge late fees

  Only offers personal loans to Wells Fargo customers

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Upgrade logo

Upgrade: Best for small loan amounts

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(2,184)
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APR range8.49% - 35.99% (with autopay)
Loan amounts$1,000 - $50,000
Loan terms24 to 84 months
Origination fee1.85% - 9.99%
Min. credit score580
ProsCons

  Flexible loan terms of 24 to 84 months

  Potential autopay discount

  May receive funds as soon as one business day

  Charges an origination fee (1.85% - 9.99%)

  Isn’t clear on some eligibility requirements

  May have to pay late fees

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LightStream logo

LightStream: Best for no origination fees

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(246)
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APR range8.99% - 24.89% (with autopay)
Loan amounts$5,000 - $100,000*
Loan terms24 to 144 months*
Origination feeNo origination fee
Min. credit scoreNot specified
ProsCons

  Low APR (7.49%*)

  Charges zero fees

  High maximum loan amount of $100,000

  No prequalification services

  High minimum loan amount of $5,000

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SoFi logo

SoFi: Best for avoiding fees

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(97)
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APR range8.99% - 29.99% (with discounts)*
Loan amounts$5,000 - $100,000*
Loan terms24 to 84 months
Origination fee0.00% - 7.00%
Min. credit score680
ProsCons

  Same-day funding available

  Doesn’t charge any fees

  Allows for co-applicants

  High minimum borrowing amount of $5,000

  High minimum credit score requirement

  Not available to LendingTree customers in Vermont

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Best Egg logo

Best Egg: Best for borrowers with excellent credit

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(2,466)
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APR range8.99% - 35.99%
Loan amounts$2,000 - $50,000
Loan terms36 to 60 months
Origination fee0.99% - 8.99%
Min. credit score600
ProsCons

  May receive funds as soon as the next business day

  Option to change your due date

  No prepayment penalties for paying your loan off early

  Charges an origination fee of 0.99% - 8.99%

  High credit score requirement (600)

  High income requirement to receive lowest APR

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Achieve logo

Achieve: Best for interest rate discounts

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(5,094)
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APR range8.99% - 35.99%
Loan amounts$5,000 - $50,000
Loan terms24 to 60 months
Origination fee1.99% - 6.99%
Min. credit score620
ProsCons

  May receive loans within 48 hours of approval

  Can choose your payment due date

  Allows for co-applicants

  Loans are not offered in all 50 states

  Charges an origination fee of 1.99% - 6.99%

  High minimum borrowing amount of ($5,000)

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Avant logo

Avant: Best for short repayment terms

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(2,682)
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APR range9.95% - 35.99%
Loan amounts$2,000 - $35,000
Loan terms12 to 60 months
Origination feeUp to 9.99%
Min. credit score580
ProsCons

  Funding as soon as the next business day

  Low credit score requirements (most Avant borrowers have scores between 600 and 700)

  No prepayment penalty

  May pay an origination fee

  Does not allow for co-applicants

  Unclear about specific eligibility requirements for personal loans

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Happy Money logo

Happy Money: Best for borrowers with good credit

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(153)
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APR range11.72% - 17.99%
Loan amounts$5,000 - $40,000
Loan terms24 to 60 months
Origination fee1.50% - 5.50%
Min. credit score640
ProsCons

  Eligibility requirements are clear

  No prepayment penalties or late fees

  Rates may be lower than credit card interest rates

  Loans can only be used to consolidate credit card debt

  May charge an origination fee (1.50% - 5.50%)

  No joint applications

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What is debt consolidation?

Debt consolidation is a debt management strategy that involves rolling one or multiple debts into another form of financing. For instance, you may take out a debt consolidation loan or balance transfer credit card and use it to pay off existing debts with better terms.

Ideally, you’ll want to consolidate your debt to a lower APR than what you’re currently paying. This can help you save money on interest, lower your monthly payments and pay off debt faster.

When is a debt consolidation loan a good idea?

There’s no one-size-fits-all debt management strategy. To determine that, you’ll need to take a close look at your finances.

Debt consolidation is a good idea when…

  • You have debt with high (or variable) interest rates
  • You can qualify for a lower APR than what you’re currently paying on your debts
  • You’re struggling to manage credit card bills and loan payments
  • You want to pay off debt faster on a set schedule

Debt consolidation is a bad idea when…

  • You can’t qualify for a lower APR than what you’re currently paying on your debts
  • You still won’t be able to afford your payments after consolidation
  • Your debt burden is small

How does debt consolidation work?

There are many ways to consolidate debt, but it generally works the same way: You pay off one or more debts using a new debt. Some popular debt consolidation methods include personal loans and balance transfer credit cards.

Depending on your unique situation — how much debt you have, your credit score, how soon you need money, what type of debt you have and other factors — one method may work better for you than another.

Personal loan for debt consolidation

How it works: A personal loan for debt consolidation combines many types of debt into one fixed monthly payment.
ProsCons

  Fixed APR and monthly payments

  Potentially lower APR than what you’re currently paying on your debt

  APRs can run high for fair and bad credit borrowers

  Subject to fees, like loan origination fee and prepayment penalty

  Bad credit borrowers may not qualify at all

Balance transfer credit card with 0% APR

How it works: A 0% APR balance transfer credit card consolidates credit card debt with an introductory no-interest period.
ProsCons

  Introductory 0% APR periods can last as long as 20 months

  Potentially lower APR than what you’re currently paying on your credit cards

  Variable APR

  Can only be used for consolidating credit card debt

  Intro offers reserved for borrowers with strong credit

  May be subject to a balance transfer fee of 3% to 5%

Home equity loan

How it works: Tap into your home’s equity to pay off debt by using your home as collateral.
ProsCons

  Fixed APR and monthly payments

  Interest rates are typically lower than with unsecured debt

  Can consolidate a large amount at once

  Only homeowners are eligible

  Risk of going into foreclosure if you fail to pay

  You could go underwater on your home, taking out more money than it’s worth

  Subject to closing costs


401(k) loan

How it works: A 401(k) loan involves borrowing money from your retirement savings plan.
ProsCons

  No credit check needed

  Borrow from and pay interest to yourself, rather than a lender or bank

  Generally doesn’t come with taxes or penalties


  Some servicers don’t allow 401(k) loans

  You lose investment gains of the money you borrow

  If you default on the loan, the amount is subject to income tax and a 10% penalty

  If you lose employment, you may have to repay the loan in its entirety quickly


Debt management plan

How it works: With the help of a certified credit counselor, create a debt management plan to repay your debt within five years.
ProsCons

  Low or no cost

  Credit counselor may be able to negotiate down fees and interest rates on your debts

  Consolidates many types of debts into one monthly payment

  Promotes healthy financial habits


  Can only be used for unsecured debts

  You’ll likely have to stop using or close your credit cards

  Can take up to five years to complete, in which time you can’t take out credit

How to get a debt consolidation loan

  1. Check your credit score. Most consolidation options have certain credit requirements, such as a minimum credit score. Unsecured personal loans don’t require collateral, which means that lenders rely more heavily on your financial situation, along with other factors, to determine eligibility. Check your credit score for free using LendingTree Spring.
  2. Calculate how much you need to borrow. Add up all your monthly debt payments that you wish to consolidate. You can use a personal loan to pay off credit cards, payday loans and other high-interest debts. Some lenders let you borrow as much as $100,000 for a debt consolidation loan.
  3. Determine the APR you need in order to save money. Your APR would need to be lower than what you’re currently paying on your debts for a personal loan to be worthwhile.
  4. Compare APRs by prequalifying with lenders. Many lenders let you prequalify for a personal loan to get an idea of your potential APR without impacting your credit score. This lets you compare estimated loan offers before you formally apply.
  5. Formally apply with a lender. If you’re approved, the lender can deposit the funds directly into your bank account. What happens next? You can use that money to pay off all types of debt. In some cases, your new lender will pay off those debts directly.

3 major benefits of debt consolidation

1. Simplifies your budget
Managing multiple due dates and accounts can add stress to your life and budget. Debt consolidation combines some, if not all, of your debt into one payment. You’ll only have to track a single account instead of multiple accounts and debt payments.

2. Saves you money on interest
If you’re able to secure a lower APR, you could save yourself hundreds (if not thousands) of dollars over the life of your loan. Your APR is the measure of how much interest and fees you’re paying on the loan.

3. Improves your credit score
As you pay off your debt consolidation loan, your credit utilization ratio will gradually decline, helping boost your credit. On top of that, your on-time payments will be reported to the credit bureaus, further increasing your credit score.

Debt consolidation vs. debt relief: What’s the difference?

Whereas debt consolidation involves taking out a new loan or credit card to repay debt on better terms, debt relief seeks to reduce the amount of debt you owe through negotiation or legal means. Debt relief comes in many forms, such as credit counseling, debt settlement and bankruptcy.

Debt consolidation vs. credit counseling

Credit counseling is a nonprofit service to help you manage expenses and debt payments more effectively. A credit counselor may set you up on a debt management plan and even negotiate debts and monthly payments on your behalf.

Debt consolidation vs. debt settlement

Debt settlement involves negotiating with your creditors to lower the amount of debt you owe and reduce fees charged to your account. Some companies offer this service, but these programs may come with high fees and can severely damage your credit.

Debt consolidation vs. bankruptcy

Bankruptcy is a legal process offering debt relief for an individual or business. When you file for bankruptcy, your assets may be sold to repay your creditors, or you may be enrolled in a court-ordered debt repayment plan.

How your credit score impacts loan rates

When it comes to obtaining most types of credit, including personal loans, the higher your credit score, the better the interest rates you are likely to be offered by lenders.

In the eyes of lenders, your credit score indicates how likely you are to repay a loan on time and in its entirety. Every time a lender offers someone a loan, they are taking a risk; the higher the credit score, the lower the perceived risk.

However, even borrowers looking for a personal loan with bad credit can find lenders that are willing to work with them. Keep in mind that you may not receive that lender’s lowest interest rates.

Average APR and loan amounts by credit score

Credit score rangeAverage APRAverage loan amount
720+20.25%$18,979
680-71930.21%$15,494
660-67943.46%$11,197
640-65960.77%$8,107
620-63981.39%$6,133
580-619120.74%$4,143
560-579153.17%$3,070
Less than 560174.95%$2,392

Source: LendingTree user data on closed personal loans for the fourth quarter of 2023.

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Frequently asked questions

There might be a small drop in your credit score after consolidating debt, since you are taking out a new credit product or loan. You might also see a dip in your credit score if you settle a debt or work with a debt management service.

 

Some borrowers see their credit score increase by consolidating debt, particularly credit card balances. Paying off credit card balances lowers your credit utilization ratio, which can give your credit score a boost.

 

Whatever the initial effect on your credit score, debt consolidation can help you increase your credit score over the long term. If you choose an option with affordable payments, you can build up a healthy payment history, which is central to a good credit score.

Applicants with good credit will have a wider range of debt consolidation options. They can get approved more easily for balance transfer credit cards with introductory 0% APR periods and personal loans with lower APRs.

 

Still, there may be options for consolidating debt if you have bad credit. You could try a secured loan, such as a home equity loan, which may come with a lower APR. There are also 401(k) loans, which let you borrow money from your own retirement fund without a credit check.

That will depend on your financial situation. There are a few primary methods of debt consolidation, including personal loans, balance transfer credit cards and home equity loans. You may also consider a 401(k) loan or debt management plan to consolidate debt. To learn about your credit card debt consolidation options, talk to a credit counselor who can provide free or low-cost guidance on your debt relief options.

It always costs money to borrow money, which is why you want to find the debt consolidation option with the lowest APR to save yourself the most money in the long run.

 

Different debt consolidation options come with their own set of interest rates and fees. For example, some personal loan lenders charge origination fees (upfront, administrative charges) or prepayment penalty fees (for paying off a loan before the term ends). If you go with a balance transfer card, it can come with a balance transfer fee.

Debt consolidation has the potential to save you money, but it’s not guaranteed. To save money, you’ll have to consolidate your debt into another form of financing that has a lower APR than what you’re currently paying on your debts. Before you consolidate debt, it’s important to take a look at your current credit card and loan agreements to determine the APR you’re paying, so you can shop around for financial products that will save you money.

If your goal is to get out of debt faster, consolidating your debts can be a smart move. Consolidating with a personal loan, for example, can give you the option to choose a short loan term, so your debt will be paid off sooner. And if you get a lower APR than what you’re currently paying on your debts, then you can pay off your debt faster even if you pay the same amount of money toward your debt each month.

When it comes to debt consolidation loans, the higher your credit score, the lower the APR you’ll likely receive on your loan. This is because your credit score indicates to lenders how likely you are to repay a loan. A high credit score indicates a lower risk to lenders, especially since debt consolidation loans are typically unsecured.

How we chose the best debt consolidation loans

We reviewed more than a dozen lenders that offer debt consolidation loans to determine the overall best 11 lenders. To make our list, lenders must offer competitive annual percentage rates (APRs). From there, we prioritize lenders based on the following factors:

  • Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

LendingTree reviews and fact-checks our top lender picks on a monthly basis.

*Pricing Disclosure:
Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.