The 30-Second Review

To find the best debt consolidation loans, we looked at which online lenders offer fixed interest rates, reasonable APRs, and no hidden fees. Why online lenders? They usually have the freedom to lend on better terms than banks, plus pre-approval processes that only takes a few minutes. The exact terms you’re offered vary depending on personal factors like income, so we'd suggest shopping around among our six picks: All allow you to compare quotes without affecting your credit.

Best for Average Credit

Minimum credit score: 640
Loan amounts: $2,000–$35,000
APR: 5.99%–35.99%

Marcus by Goldman Sachs
Minimum credit score: 660
Loan amounts: $3,500 to $30,000
APR: 6.99% to 23.99%

Lending Club
Minimum Credit Score: 660
Loan Amounts: $1,000 to $40,000
APR: 5.99% to 35.89%

Best for Excellent Credit

Typical credit score: 700
Loan amounts: $5,000–$100,000
APR Fixed: 5.49%–14.24% (with AutoPay)

Best for Poor Credit

Upgrade
Minimum Credit Score: 620
Loan Amounts $1,000 to $5,000
APR: 5.66% to 35.97%

Avant
Minimum credit score: 580
Loan amounts: $2,000–$35,000
APR: 9.95%–35.99%

  • December 6, 2017 - We've updated our review to consider seven additional online lenders that entered the scene since we first published our review in 2016. We’ve added two — Marcus and Upgrade — to our list of top picks, and we also removed one former runner-up, Uplift, whose terms have changed.

The Best Debt Consolidation Loans

If you’re balancing so many different payments that you have trouble keeping your due dates straight — or if your interest rates are hindering your ability to pay what you owe — consolidation can be a quick step towards simpler payments and lower interest rates. A debt consolidation loan is a personal loan that you can use pay off existing debts and then pay back, in turn, over a 2-7 year period.

Borrowing money is personal, so the exact rates and terms available to you depend greatly on your financial history. That’s why we have six picks for best debt consolidation lender. Each offers transparent pricing, reasonable APRs, fixed interest rates, multiple options for loan amounts and payoff periods, and no pre-payment fees — exactly what you want in a lender. They cater to a variety of credit scores: Prosper, Marcus, and Lending Club are right in the middle and good options for borrowers with credit scores in the mid-to-upper 600s. The average SoFi lender has a credit score of 700. Avant and Upgrade are willing to dip into the 620-580 range.

We recommend that you apply to multiple lenders to compare offers. Each company calculates its lending rates with in-house algorithms, so shopping around can help you find the loan with the best interest rate. Applying is easy. Each application takes less than 3 minutes, and lets you know immediately if you’re pre-approved, and at what rates. Most importantly, these companies only do a soft pull on your credit score at this stage — you won’t be dinged just for comparing pre-approval offers.

Our Picks for the Best Debt Consolidation Loans

Because loans are so personal and shopping around for the best rate is so important, we have six top picks, catering to a range of credit scores and risk profiles. Honestly, we like them all, but as mentioned earlier, it’s best to get multiple quotes to see which company is the best match.

The Best Debt Consolidation Loans at a Glance

Prosper
Lending Club
Marcus
Upgrade
Avant
SoFi
Good for
Average Credit
Average Credit
Average Credit
Poor Credit
Poor Credit
Excellent Credit
Minimum credit score
640
660
660
620
580
N/A (700 is typical)
Loan amounts
$2,000 to $35,000
$1,000 - $40,000
$3,500 to $30,000
$1,000 to $50,000
$2,000 to $35,000
$5,000 to $100,000
Loan periods
3 or 5 years
3 or 5 years
3 - 6 years
3 or 5 years
2 - 5 years
3, 5 or 7 years
APR
5.99% - 35.99%
5.99% - 35.89%
6.99% - 23.99%
5.66% - 35.97%
9.95% - 35.99%
Fixed 5.49% - 14.24% (with AutoPay)
Origination fee
1% - 5%
1% - 6%
None
1% - 5%
4.75%
None
Unsuccessful payment fee
$15
$15
None
$10
$15 (most states)
None
Late payment fee
Greater of: 5% of unpaid installment or $15
Greater of: 5% of unpaid installment or $15
None
$10 after 15-day grace period
$25 (most states)
Lesser of 4% of the payment due or $15

Best for Average Credit

ProsperMinimum credit score: 640
Loan amounts: $2,000–$35,000
APR: 5.99%–35.99%

Prosper is the oldest peer-to-peer lending group in America (founded 2005). With a credit rating requirement of 640, it’s right in the middle of our top picks for credit score. It’s most comparable to Lending Club (whom we’ll discuss in a minute) as they both have similar policies on origination fees, unsuccessful and late fees, and have nearly identical APRs.

Screenshot of Prosper Decline Letter for Debt Consolidation Loans

If you’re not approved for a loan, Prosper’s email states in its first line the reason why.

We liked how, in addition to a friendly customer service agent, Prosper let us see clearly the reason our tester had been declined for a loan. This gives us some insight into whether it was a problem we could fix, either by building up our credit history, or finding a co-signer, rather than leaving us wondering what happened. Like most of our picks, Prosper’s pre-approval process is also extremely simple, asking for name, address, credit score and income, rather than more obscure categories like “taxable income” that showed up in some of our finalists’ sign-up boxes. Once you’ve entered your information and been pre-approved, Prosper lets you evaluate available loan options by payoff period, monthly payment, and loan amount to make sure you are happy with what you’re getting.

Screenshot of Prosper Loan Details for Debt Consolidation Loans

If, after you’ve done the math and compared your options, you choose to go forward with Prosper, you will need to complete the full application. From there, your anonymous loan request will go out to Prosper’s investors. If at least 70 percent of the amount you request is funded, you will receive a loan; only during this final handshake will Prosper do a hard check on your credit. You should receive your loan three to five days after that. If your loan isn’t funded 100 percent, or at all, you can reapply for another loan. There is no waiting period between applications and no maximum number of times you can apply — however Prosper states it does decline users that have submitted a previous application and were declined by the company in the last 120 days.

Lending ClubMinimum Credit Score: 660
Loan Amounts: $1,000 to $40,000
APR: 5.99% to 35.89%

While Lending Club received a lot of media attention in 2016 (and not for any flattering reasons), the news affected investors more than borrowers. There was controversy over the ousted CEO padding reported loan volume and splitting loans to make them appear less risky to investors. For borrowers, not much has changed — the CEO has been replaced, and the company continues to offer the same services, although some analysis suggests that Lending Club might be raising their standards, becoming less willing to lend to people with very low credit scores.

We suggest that if you meet the minimum 660 requirement, you should at least see what sort of rate the company offers. The pre-approval process is as easy as Prosper’s, requiring just the basic address, birthday, and annual income. While they are the only company of our top picks to charge a check processing fee — it will cost you $7 each time you pay your bill with a check rather than electronically — their interest rates and fees are comparable to Prosper. Be aware of Lending Club’s origination fee, however, which can range all the way up to 6% (as opposed to Prosper’s 5%, or Marcus’s 0%). An APR calculator is the best way to see how origination fees will affect your overall costs.

Marcus by Goldman SachsMinimum credit score: 660
Loan amounts: $3,500 to $30,000
APR: 6.99% to 23.99%

Marcus by Goldman Sachs is relatively new to online lending, debuting in October 2016. Its minimum credit score, 660, matches Lending Club’s. Its minimum APR rate is higher than most of our picks (6.99%, versus Lending Club’s 5.99%), but averaging things out on the other end, the company’s maximum APR rate is also lower (23.99% versus Lending Club’s 35.89%), so that Marcus still falls well within the typical range of our top picks.

Marcus debt consolidation loan process

Where Marcus proves to be most interesting is its promise of “No fees. Ever.” They don’t charge origination, late, or unsuccessful payment fees. This doesn’t necessarily mean they’ll be the cheapest loan you can find — you’ll want to compare APR and interest rates as well — but it’s a nice perk and helps ensure that you know exactly what you’ll be paying each month. No need to worry about factoring these fees into your budget if you miss your payment window by a couple of days. We also appreciated their extremely courteous customer service. When we called to ask questions about our loan terms, we only had to wait a couple of seconds before being put directly through to a live representative.

Like our other top picks, Marcus’s pre-approval process can be completed in about five minutes and only requires to provide general background info, like income, credit score, and monthly housing costs.

Best for Poor Credit

UpgradeMinimum Credit Score: 620
Loan Amounts $1,000 to $50,000
APR: 5.66% to 35.97%

Like Marcus, Upgrade is fairly new to online lending, opening its doors in April 2017. The company was begun by two of Lending Club’s original co-founders, Renaud Laplanche and Soul Htite, but caters to a lower minimum credit score — 620 — than our other picks (Avant, below, goes lower still). Upgrade plans for their service to double as a tool for improving financial literacy, with the New York Times reporting that the company has “free credit monitoring tools and online education” in the works.

That said, Upgrade is still quite young, and we weren’t bowled over by their current offerings. Their Credit Health Insights resource page is still being developed and is available only to current borrowers. There also isn’t an app yet, unlike Avant, below.

Apart from this in-the-works educational component, the company feels very similar to our other top picks. The pre-approval process is fast and straightforward. There’s a $10 late fee following a 15-day grace period, plus a $10 for unsuccessful payments.

AvantMinimum Credit Score: 580
Loan Amounts: $2,000 to $35,000
APR: 9.95% to 35.99%

At 580, Avant’s minimum credit score is a full 40 points lower than Upgrade’s, making it (theoretically) accessible to the 85 percent of Americans who can meet or exceed that benchmark (but like we discovered when our testers applied for pre-approval, more than pure credit score is taken into account). Avant also offers an app, to make it easier to view and manage your payments.

While Avant isn’t as free of fees as Marcus, we did appreciate its late fee forgiveness policy. If a borrower makes one late payment, but their next three payments are on time, Avant will refund the $25 late charge in most states, which is a great morale boost when you’re working hard to get out of debt.

Avant’s pre-approval form is slightly more robust than our other top picks, so budget a few extra minutes to fill it out. Among other things, Avant requires your Social Security number, inquires whether or not you own your home, and wants your specific monthly net income before it decides whether or not you’ll be approved. Once you’re approved for and sign off on a loan, you’ll get that hard credit check and could receive your loan as soon as the next business day, or up to a week at most.

Avant debt consolidation loan pre-approval process

Avant's pre-approval process is more involved than our other finalists'.

Best for Excellent Credit

SoFiTypical credit score: 700
Loan amounts: $5,000 to $100,000
APR: 5.49% to 14.24% Fixed (with AutoPay)

SoFi, short for Social Finance, was originally designed for student loan financing — and even though it has expanded its products to include personal loans and mortgages, its target demographic remains the same: individuals with high incomes, or recent grads that have high earning potential. The pre-approval application process includes questions about your alma mater, major, advanced degrees, and income. Like Avant, SoFi offers an app to help manage your repayments.

SoFi cherry-picks who it approves for loans, which can be frustrating if you’re denied, but the terms of the loan have the potential to be better than any of our other top picks. Even though SoFi doesn’t list a minimum credit score, we chatted with Laurel Toney from SoFi’s public relations team who confirmed, “SoFi borrowers generally have scores above 700.” But SoFi takes care of its customers: Its $5,000–$100,000 loan range and max fixed 14.24% APR (with AutoPay) blow our other top picks out of the water.

The name Social Finance comes from the fact that SoFi actually has a networking component, complete with career coaching and in-person events. It clearly caters to the educated and financially ambitious, with features like an entrepreneur program and a specific MBA loan. It also has a feature called Social Comparison, which shows where you fit into the bigger picture of borrowers and lenders.

Screenshot of SoFi Social Comparison for Debt Consolidation Loans

Another to Consider

DiscoverMinimum credit score: 660
Loan amounts: $2,500 to $35,000
APR: 6.99% to 24.99%

Discover Personal Loans (the same company as Discover Credit Cards) has similar rates to our other picks, but we had a few reservations that kept it from joining the top six. We liked that Discover doesn’t charge prepayment, origination, or check processing fees, but it has the highest late payment fee of all our finalists: $39 — you’ll definitely want to make sure you don’t miss a payment.

Discover’s minimum credit score is 660, which means it should be a good option if you have average credit. However, NerdWallet reports that Discover’s borrowers have an average credit score of 747 (versus Lending Club's 699 average), which means that actually receiving a loan from Discover might be more competitive than it would be with our other mid-tier picks like Lending Club and Prosper. Still, if you're looking for additional options and meet the minimum requirements, it's worth a look. Be aware that Discover's pre-application process is fairly involved, requiring info like social security, occupation, length of employment, and savings account balances.

Did You Know?

You don’t have to calculate APR by hand.

If you want to compare several loan offers, calculating APRs by hand is possible but tricky. Instead, we’d suggest Bankrate’s Loan Comparison Calculator. It allows you to type in the numbers and rates you’ve been offered for up to three different loans. Once you’ve filled out the simple form (the data that you need should be included in your pre-approval quotes), the calculator will make a cross-comparison chart to show which loan offer has the lowest monthly payments, the lowest APR, and the lowest cost over time. It doesn’t take into account recurring costs, so if you are paying Lending Club with a check, you’ll need to mentally add their $7 check processing fee on top of the calculated monthly rate. But overall, it’s an easy tool to figure out which lender is making you the best offer.

Get creative with (resolving your) debt.

Debt consolidation loans are a useful tool, but if you’re trying to get your expenses under control, our experts also recommended other measures.

It’s not glamorous, but the first step to truly resolving your debt is figuring out how much money you have, and where it’s going. Shawn Tydlaska, a Certified Financial Planner at Ballast Point Financial Planning who works with clients to help resolve their debts, says that “The first step is writing down all your debts, putting down your current credit limits and interest rate, and then calculating your minimum payments and how much of your credit you’re using.” Tracking your interest rates, in particular, is key to figuring out whether you’ll benefit from grouping any of your unsecured debts under a single debt consolidation loan.

In addition to debt consolidation loans, there are other ways to take control of your debt. Both Shawn Tydlaska and Ben Woolsey, President and General Manager of CreditCardForum, suggested opening a new credit card — so long as it’s the right one. Many credit cards billed as “balance transfer” cards, have a 0% intro APR that typically lasts for one to two years. These cards usually have an initial transfer fee of about 3%, according to Woolsey, but if you can pay off your balances within the 0% intro APR promotional period, you’ll spend less than you would have with a debt consolidation loan.

What if I have bad credit and can't get approved?If you don’t have enough credit history, it’s difficult to get approved, either for a loan or a balance transfer card. Tydlaska advises getting a beginner credit card. They usually have a very low credit limit, and may have an annual fee, but they’ll help you build your credit so you can apply for a larger loan in the future.

For example, let’s say you owe $2,000 total If you were to take out a Prosper loan with an APR of 21% (the middle of its range) and pay it off over three years (its shortest payoff plan), you would pay $75.35 per month and accrue $712.60 in interest over time, making your total payment $2,712.60.

Now let’s say you transfer that same amount of debt to a balance transfer card, like our favorite, the Chase Slate card, which charges no balance transfer fee for the first 60 days. If you can pay off your balance within the 15-month 0% introductory APR period, you’ll need to make monthly payments of $133.33 for a total payment of exactly $2,000 — no added $700 interest.

Either of these options could be the right fit, but if you can afford to make that larger monthly payment, you’ll not only save in interest, but also be free of debt that much faster.

Unsecured loans come with limitations.

It’s important to note that unsecured loans are only meant for bundling other unsecured loans, like credit card debt, or bills like medical care and car repair. You might be able to consolidate some secured loans (like your car payments), too, but since secured loans generally have lower interest rates than unsecured ones, this might not be the best move.

And if you have student loans, be careful before you consolidate them with the rest of your debt. Student loans come with certain built-in features, like the option to defer or go into forbearance, not to mention forgiveness. If you consolidate them, you could lose all those benefits. If you’re still interested in consolidating, Marketplace recommends going straight to the Department of Education to figure out the best way to handle it.

Don’t be afraid to ask for help — or for better rates.

An even easier way to get some relief from your debt is to call your creditors yourself and let them know the position you’re in. Amazingly, these calls often do lead to a lower rate or even a postponed deadline. “It certainly never hurts to ask, as issuers have been known to lower interest rates or offer extended repayment terms to accommodate loyal customers who are unable to stay current with their accounts,” says Woolsey.

Saxman gives the same advice. “Let them know, ‘Hey, I’m falling behind.’ A lot of creditors will work something out for you,” she says. “Now, they may close your credit card in the process if you can’t make minimum payments, but that might be better in the long run.”

Similarly, Tydlaska suggests also simply calling up your current credit card company and asking for a lower interest rate. If you have a better offer from another credit card company, or a debt consolidation loan, they might lower your interest rates to keep your business.

Take Action

Make a budget. Find out how much, exactly, you owe, and how much you can afford to pay toward reducing your debt each month. “I feel like people sometimes are not realistic with themselves and they don’t write down, ‘Okay every month I have X amount of money coming in and X amount of money going out,’” says Van Horn. “If you’re going to do one of these loans, you need a way to pay it off. The money can’t come from rent and it can’t come from your car payment. And if you can’t do it on your own because you’re not good with numbers, find somebody that you can trust to review the numbers with you.”

Tydlaska likes using the 50/30/20 method for calculating expenses. “Try not to spend more than 50% of income on fixed expenses, like rent, insurance, and your minimum payments,” he suggests. 30% should go towards day-to-day expenses like dining out, travel, and gifts, while 20% should be saved for the future, whether that’s your 401k or you’re saving up for a house.

Get some unbiased advice — preferably for free. “You definitely want to sit down and make a plan and speak to some kind of counsel because I see people whose first response is, ‘I want to file for bankruptcy,’ and that’s not always the right choice,” explains Saxman. You may already have your heart set on a specific option, be it debt consolidation or a home-equity line of credit. But before you commit, get a second opinion, and make sure you can trust that it’s an impartial one. Woolsey recommends checking out the nonprofit Consumer Credit Counseling Services, which offers both free and inexpensive credit counseling services and has local branches around the country.

The Best Debt Consolidation Loans: Summed Up

Debt Consolidation Loan
Best For...
Prosper
Average Credit
Lending Club
Average Credit
Marcus by Goldman Sachs
Average Credit
Upgrade
Poor Credit
Avant
Poor Credit
SoFi
Excellent Credit