Best Debt Consolidation Loans in April 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 Carol Pope | Edited by Jessica Sain-Baird | Updated March 28, 2024

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%
Minimum credit scoreNot specified
ProsCons

  Free monthly credit score

  Will send your loan directly to who you owe

  Can change loan payment due date

  Loan may come with an origination fee

  Customer service not available on weekends

  No mobile app

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
Minimum credit scoreNot specified
ProsCons

  Can consolidate up to $100,000 of debt

  No up-front fees

  Might get funds the next business day

  History of legal violations

  May charge late fees

  Must be a Wells Fargo customer

Upstart logo

Upstart: Best for borrowers with bad credit

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(16,393)
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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%
Minimum credit score300
ProsCons

  Don’t always need credit to qualify

  15-day grace period for late payments

  Quick approvals

  Doesn't offer joint loans

  Only two loan terms to choose from

  Hefty origination fee possible

Upgrade logo

Upgrade: Best for small loan amounts

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(2,201)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

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

  Has a user-friendly mobile app

  Discount for allowing Upgrade to pay your creditors for you

  Could get your loan the day after you apply

  Charges an origination fee (1.85% - 9.99%)

  Might find lower rates with another lender if you have excellent credit

  Won’t qualify if you have bad credit

LightStream logo

LightStream: Best for no origination fees

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(277)
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APR range8.99% - 24.39% (with autopay)
Loan amounts$5,000 - $100,000*
Loan terms24 to 84 months*
Origination feeNone
Minimum credit scoreNot specified
ProsCons

  No fees

  May beat competitors’ rates

  Same-day loans possible

  Won’t know if you qualify unless you take a hard credit hit

  No small loans

  Must have good-to-excellent credit

SoFi logo

SoFi: Best for borrowers with good credit

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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% (optional)
Minimum credit score680
ProsCons

  Same-day loans possible

  No late payment fees

  Offers joint loans

  APR discount if SoFi pays your debt directly

  Only offers large loans

  Need at least good credit to qualify

  Lowest rates may require an optional origination fee

Prosper logo

Prosper: Best for peer-to-peer loans

User ratings
(3,639)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

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

  Free monthly credit score

  Joint loans available

  Don’t need perfect credit

  Can take up to 14 days to get your loan

  Origination fee applies to all loans

  $29 late payment fee ($40, in some cases)

Best Egg logo

Best Egg: Best for borrowers with excellent credit

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(2,494)
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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%
Minimum credit score600
ProsCons

  May get your loan the next day

  Can change your due date

  May get better rate if Best Egg pays your creditors

  All loans have an origination fee

  Must have a high income and excellent credit to get best rates

  Mobile app only works for Best Egg credit cards

Achieve logo

Achieve: Best for interest rate discounts

User ratings
(5,136)
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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%
Minimum credit score620
ProsCons

  Three interest rate discounts

  Assigned a dedicated loan consultant for assistance

  Will send your loan to your creditors

  Loans are not offered in all 50 states

  Mandatory origination fee

  Need to have at least $5,000 of debt to consolidate

Avant logo

Avant: Best for short repayment terms

User ratings
(2,682)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

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

  Quick loans available

  Accepts less-than-perfect credit

  Has a highly-rated mobile app

  May pay an origination fee

  No joint loans

  Doesn’t specify many eligibility requirements

Happy Money logo

Happy Money: Best for credit card consolidation

User ratings
(153)
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Ratings and reviews are from real consumers who have used the lending partner’s services.

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

  Clear eligibility requirements

  No late payment fees

  Low rates for excellent credit

  Can take 30 days for your loan to reach your creditors

  Charges an origination fee

  No joint applications

What is a debt consolidation loan?

A debt consolidation loan is a type of personal loan that you use to pay off multiple, existing debts (such as credit cards or medical bills). Importantly, a debt consolidation loan doesn’t get rid of your debt. Instead, consolidating restructures it.

After consolidating, you’ll have one loan payment to make rather than multiple debt bills. You may also pay less in interest if your debt consolidation loan has a lower APR than what you’re paying on your current debt.

Of all the products available on the LendingTree marketplace, debt consolidation loans are among the most popular. In the fourth quarter of 2023, 54.3% of LendingTree users sought a personal loan to consolidate debt or refinance their credit cards.

How does a debt consolidation loan work?

Let’s say you have four outstanding credit cards with a total balance of $20,000. Although you have a different APR on each card, you’re paying an average rate of 24.61%.

You’ve improved your credit score since you took out your credit cards. As a result, you qualify for an APR of 16.01% on a debt consolidation loan with a five year term. In this situation, consolidating could help you save money and pay off your debt faster.

Debt consolidation loans come with fixed interest rates (unlike credit cards, which have a variable rate). That means the APR on your debt consolidation loan will not increase due to inflation.

Note that credit card debt isn’t the only type of debt you can consolidate. Many lenders (including most on this list) allow you to consolidate personal loans, too.

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 will the Federal Reserve impact interest rates in 2024?

Insights from Jacob Channel, LendingTree senior economist

What might happen to interest rates in 2024?

“Cuts to the federal funds rate this year are possible, though they aren’t guaranteed.

If the Fed does cut rates, don’t expect them to do so until summer at the earliest and don’t expect that they’ll slash rates to the bone anytime soon.”
Is now a good time to get a debt consolidation loan?

“Regardless of whether the Fed starts cutting rates this year, now could still be a good time to get a debt consolidation loan.

Remember that while the Fed has an influence over consolidation loan rates, they don’t directly set them. Instead, the actual rate you get will vary depending on factors like what your credit score looks like, how much you’re trying to borrow and who your lender is.”

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.

How to compare debt consolidation loans

What’s the use of getting multiple loan offers if you aren’t sure what you’re looking at? When reviewing your options, pay special attention to:

 APR: Annual percentage rate — or APR — is your interest rate, plus any fees. The lower the APR, the cheaper the loan.

 Loan term: This is the length of time you have to pay off your debt consolidation loan. A longer loan term usually results in lower monthly payments (since you’ll have more time to spread your balance across). However, the longer it takes to repay your loan, the more overall interest you may pay.

 Loan amount: When consolidating debt, it’s important that the loan you take will cover all that you owe. If your debt consolidation loan comes up short, the only way to borrow more is to take another loan.

 Fees: Debt consolidation loans can come with fees, the most common being an origination fee. Typically, the lender will deduct this fee from your loan funds before sending it to you (or your creditors).

Generally, lower-credit borrowers are more likely to see an origination fee. Origination fees can help offset some of the lender’s risk. But some lenders charge them no matter your score.

 Funding timeline: A lender’s funding timeline is how long it takes to approve your loan and send you your funds. Although a lender might advertise same-day funding, that timeline might not apply to debt consolidation loans.

 Loan disbursement: When a lender disburses your loan, that means it has sent it to you. You may have the option to have the lender pay your creditors directly. This might streamline the process, and some lenders (such as Achieve) may give you an APR discount for doing so, too.

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+16.01%$18,594
680-71925.78%$15,302
660-67937.57%$11,160
640-65951.61%$8,088
620-63971.55%$6,300
580-619112.28%$4,397
560-579152.35%$3,071
Less than 560175.16%$2,405

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

Alternatives to debt consolidation loans

Debt consolidation loans may be the right choice for some borrowers, but there are other options out there that might be better suited to others. Here are a few alternative strategies to consider:

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

  No interest as long as you pay off your balance transfer card during the introductory period (which could last as long as 21 months)

  Non-introductory APR may still be lower than your current cards

  Variable APR that goes up and down based on the economy

  Only works for credit card debt

  Usually requires good-to-excellent credit

  May pay a 3% to 5% balance transfer fee to move the debt from your existing cards to the balance transfer card

Home equity loan

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

  Fixed interest rates

  Payments are the same each month

  Typically lower rates than a loan that doesn’t require collateral

  May be able to consolidate a lot of debt, depending on your equity, credit score and property value

  Must be a homeowner with equity

  Can lose your home if you don't pay

  May go underwater, which means you owe more on your home than it’s worth

  May require closing costs (2% to 5% of your loan amount)

401(k) loan

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

  No credit check

  You pay the interest back to yourself instead of losing it to a lender

  Won’t hurt your credit if you can’t pay back your 401(k) loan

  Not all 401(k) plans allow loans

  Won’t earn money on investments on the money you borrow (at least until you pay it back)

  May need to pay back your loan in a lump sum if you leave your job

  If you can’t pay back your loan, you’ll have to pay income tax on what you borrowed

  10% penalty if you don’t pay back what you borrowed (unless you’re older than 59.5 years old)

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

  Free or low cost

  Credit counselor may be able to negotiate to bring down fees and interest rates

  Can consolidate many types of debt

  Promotes healthy financial habits


  Can only be used for debts that don’t require collateral

  Will probably have to stop using or close your credit cards

  Can’t open up new credit while working through the plan (which can take five years)

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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 refinancing 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.