The Best Debt Consolidation Loans

The best debt consolidation loan isn't just the one with the lowest APR. It should offer you exactly the amount of money you need with minimal fees, helpful resources, and excellent communication. The better your credit score, the more options you'll have, but we've picked out lenders with a range of requirements so you can find the one that's best for you.

The 6 best debt consolidation loans

Best for Average Credit
Prosper
Pros
Easy pre-approval process
Clear communication
Low minimum APR
Cons
Can’t adjust payment schedule

Why we chose it

Easy pre-approval process

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.

Clear communication

Prosper explained to us in transparent terms the reason our tester had been declined for a loan. That gave 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. In our tester’s case, the reason given was having “too few open trades,” meaning she may not have had enough open credit cards to qualify.

Low minimum APR

Prosper’s minimum APR of 5.99% was one of the lowest we saw. Of course, you’ll need a great credit score to qualify for that number, but having the potential for a low APR is essential to a great lender. Prosper did have a maximum of 35.99%, on the higher end of our top picks, but that's generally reserved for borrowers at the bottom of Prosper’s minimum required credit score.

Points to consider

Can’t adjust payment schedule

Prosper is a little less flexible than some of our other top picks in this area. Unlike its most similar competitor, Lending Club, they set the due date for your monthly bill, and you’re not able to change it at any point. And if you do miss a payment, you’ll be charged a late fee of either 5% of the unpaid installment or $15, whichever is greater.

Best for Average Credit
Lending Club
Lending Club
Pros
Easy pre-approval process
Low minimum APR
Flexible loan amounts
Cons
2016 controversy
Extra fees

Why we chose it

Easy pre-approval process

We found Lending Club’s pre-approval process to be just as painless as Prosper’s. You’ll just need to provide your birthday, address, and annual income, without having to figure out more complex information like taxable income.

Low minimum APR

At only 6.16%, Lending Club has one of the lowest minimum APRs that we saw. That doesn’t mean that you’ll necessarily pay that rate — you’ll need a high credit score to qualify for the minimum APR — but we appreciated that rates started so low. Lending Club has a maximum APR of 35.89%, slightly lower than Prosper, but still at the higher end of our top picks.

Flexible loan amounts

Lending Club offers loans up to $40,000, tied for the highest of our top picks for borrowers with average credit. (Marcus goes up to $30,000, while Prosper tops out at $35,000.) While it’s not as high as some other lenders — SoFi goes up to $100,000, for example — we still thought it was a great option for those with average credit scores looking for bigger loans. It’s not just at the higher limits that they excelled, either. Lending Club also had the lowest loan minimums of any of our picks at $1,000, meaning you probably won't be stuck taking out a bigger loan than you need.

Points to consider

2016 Controversy

Lending Club has received a lot of media attention since it was formed in 2007, and not always for the most flattering reasons. In 2016, news broke that the CEO was involved in padding reported loan volume and splitting loans to make them appear less risky to investors. This controversy affected investors more than borrowers, with stock prices falling 34% at the time. 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 its standards, becoming less willing to lend to people with very low credit scores.

Extra fees

Lending Club was the only one of our top picks to charge a check processing fee, meaning it will cost you $7 each time you pay your bill with a check rather than electronically. It also has a harsher origination fees than other companies we saw, ranging all the way up to 6% (as opposed to Prosper’s 5%, or Marcus’s 0%).

Best for Average Credit
Marcus by Goldman Sachs
Pros
No fees
Low maximum APR
Customer service
Easy pre-approval process
Cons
High minimum APR

Why we chose it

No fees

Marcus is unique in its promise of “No fees. Ever.” The company doesn’t charge origination, late, or unsuccessful payment fees. This doesn’t necessarily mean it will necessarily 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 fees into your budget if you miss your payment window by a couple of days.

Lower maximum APR

Marcus’s maximum APR was much lower than other lenders in serving customers with average credit. Rates only go up to 24.99%, compared with around 36% for both Prosper and Lending Club.

Customer service

We also appreciated Marcus’s 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. Once we did get through, the agents seemed genuinely invested in answering our questions, never once trying to steer us towards a loan.

Easy pre-approval process

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

Points to consider

Higher minimum APR

The minimum APR rate on Marcus’s debt consolidation loans was a little higher than most of our picks (6.99%, versus Lending Club’s 6.16%). Still, we considered that one percentage point difference to be fairly negligible when you consider that the maximum APR is about 12 percentage points lower than those other two.

Best for Low Credit
Upgrade
Pros
Low minimum credit score
Educational resources
Flexible loan amounts
Cons
Newer company

Why we chose it

Low minimum credit score required

Upgrade requires a low minimum credit score of 620 to apply for a loan — second only to Avant’s 580 — making it a great choice for those with less-than-stellar credit. But be aware that more than just credit score is taken into account.

Educational resources

We loved how Upgrade provides a number of free educational resources on its website to help you make smart financial decisions. Its Credit Health Insights page is full of useful articles and videos that can help you do things like improve your credit score, fix an error on your credit report, and figure out how to pay off large debts. The company also offers an effective credit score simulator, so you can see exactly how different scenarios affect your score.

Flexible loan amounts

Upgrade offers loans from $1,000 to $50,000, one of the widest ranges we saw among our top picks. The only one of our top picks that went higher was SoFi, which provides loans all the way up to $100,000.

Points to consider

Newer company

Upgrade is fairly new to online lending, having opened its doors in April 2017. The company was begun by two of Lending Club’s original co-founders, Renaud Laplanche and Soul Htite, after they were forced to resign following a 2016 controversy involving padding reported loan volume and splitting loans to make them appear less risky to investors. Ultimately, we weren’t incredibly concerned about this history. The inaccuracy at Lending Club was fairly minor, and although it has only been around for little more than a year, Upgrade has received overwhelmingly positive reviews, with an A rating from the BBB.

Best for Low Credit
Avant
Pros
Lowest minimum credit score required
Cons
Mobile app
High minimum APR

Why we chose it

Lowest minimum credit score required

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.

Points to consider

Mobile app

Along with SoFi, Avant was one of only two of our top picks to come with a mobile app, theoretically making it simple to view and manage loan payments. Unfortunately, it’s received a number of negative reviews, with the most common issue being frequent crashing. Still it has a 3.5* rating on 563 Google Play reviews, and 3* out of 41 ratings in the App Store. Those aren’t the most reassuring scores, to be sure, but we still appreciated that Avant thought to include a mobile app, even if there are some kinks left to work out.

High minimum APR

At 9.95%, Avant had by far the highest minimum APR of any of our top picks. Marcus was the next closest at 6.99%, and most of them stayed between 5% and 6%. APR doesn’t tell the whole story of a loan — additional fees could significantly increase what you end up paying — but this was still higher than we would have liked. It’s not like Avant offset it with a low maximum APR, either — its 35.99% maximum tied Prosper for the highest APR.

Best for Excellent Credit
SoFi
Pros
Great terms for borrowers with high credit scores
Networking opportunities
Mobile app
No fees
Cons
Targeted towards affluent borrowers

Why we chose it

Great terms for borrowers with high credit scores

Instead of relying strictly on credit scores like our other top picks, SoFi factors in things like cash flow, career experience, and your monthly income after expenses. This 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 15.365% APR (with AutoPay) blow our other top picks out of the water.

Networking opportunities

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.

Mobile app

SoFi has received much more positive feedback on its mobile app than Avant has. It has a rating of more than four stars on 187 ratings in the Google Play store, with most users having pretty positive feedback on the app’s functionality. It’s a little more spotty on the App Store — 2.8 stars on 52 ratings — with a lot of complaints saying that SoFi only lets you view your loan amount, without letting you do anything to manage your account on the app.

No fees

Like Marcus, SoFi doesn’t charge any of the fees that are standard with debt consolidation lenders. There is no origination fee, no charge if a payment fails to go through, and as of April 2018, no late payment fee. That doesn’t mean you’ll necessarily be paying less over the entirety of your loan period — again, it’s best to check terms from a few companies — but it’s certainly not a negative, either.

Points to consider

Targeted towards affluent borrowers

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. While this can result in better terms than most companies, it can also be frustrating if you don’t meet SoFi’s high standards.

Guide to debt consolidation loans

How to find the best debt consolidation loan

Establish a loan amount and repayment period to look for

There’s no such thing as the right debt consolidation loan amount or payback plan for everybody. “It’s all going to be relative to your income and ability to repay, so there’s really no limit to it,” debt attorney Chad Van Horn told us. “If you’re making $500 or $600 a month, a $1,000 loan may seem like you’ll never be able to pay it off. But if you’re making $10,000 per month, it’s the $100,000 loan that may seem like you’ll never be able to pay it off.” It’s important to have a good idea what you’re looking for going in. All our top picks offer two or three repayment period plans (three- and five-year plans are the most common) and range from $1,000 to $100,000.

Evaluate potential fees

In addition to the costs included in your APR, your loan will likely come with other small fees. These vary from lender to lender, but should be both fair and absolutely transparent. The most common are fees for late and unsuccessful payments, prepayments (making a payment early), and check processing. Keep in mind that even if a company doesn’t have any of these fees, it’s not necessarily a better deal — it just means that the company makes all its money through interest. No matter what, it’s still important to compare your quoted APR against offers from other companies.

Compare rates

“The best way to find the best loan is to try a few different companies and actually go through the process of applying to see the official rate you would be getting,” says Erik Kroll, a certified financial planner with Hilltop Financial Advisors. “Then you can calculate the total cost of the loans — including any fees — and weigh your options by comparing the monthly payment, how long the loan will last, and how much total interest you’ll pay.” The only problem? Because rates vary depending on your individual profile, you can’t simply check a price list. Shopping around for a loan requires you to hand over personal information and (this is the big one) have your credit checked. That’s where our next step comes in.

Avoid companies that use a “hard pull” the check your credit

There are two different ways that lenders can check your credit, and one is less intrusive than the other. A hard inquiry, or hard pull, can lower your credit score, whereas a soft inquiry, or soft pull, won’t. “A hard pull is the most definitive way to assess a borrower’s risk profile, while soft pull data is less complete and typically older info used for pre-qualification purposes,” explains Ben Woolsey, president and general manager of CreditCardForum.

Hard pulls are necessary for certain financial transactions, including officially closing the deal on a personal loan — you’ll suffer a hard pull eventually. But some (like LightStream or Rocketloans) require one at the very beginning of the process before you’re even able to see what rate you qualify for.

The issue is that hard pulls can signal that you’re desperate for credit and may be trying to spend beyond your means — and your credit score will drop by a few points. Granted, there’s an exception called “rate shopping,” which lumps all hard pulls within 45 days for the same kind of loan into one. But there’s always the chance that, after comparing rates, you’ll decide against taking out a personal loan. (Or, it may turn out that you don’t qualify for one at all.) In those cases, it’s better to walk away without having dinged your credit score for no reason. “My advice to consumers would be to utilize soft pull options whenever possible, and understand their credit score and credit costs/options to the fullest extent possible before initiating any full applications that involve a hard pull,” Woolsey told us.

Debt Consolidation Loan FAQs

What’s the difference between APR and interest rate?

These two attributes are related, but not the same. APR (short for annual percentage rate) is more comprehensive, including both your interest rate and your origination fee. Each loan is likely have different interest rates and origination fees, so APRs make it easier to compare two offers (think apples to apples, rather than two fruit salads with different grape-to-melon ratios).

Say you’re comparing two $5,000 loan options. One comes with 10% interest and a 3% origination fee. The other comes with 13% interest, but no origination fee. At a glance, it’s tough to know which one is a better deal. Knowing the APRs lets you make a one-to-one comparison. Lenders will provide you with an APR, but you can also calculate it yourself with a calculator like this one. When we enter the data for the options above, we can see that the first loan has an APR of about 12%. The second maintains its 13% APR. Provided other terms look good, the first is the better deal.

When should you go with a bank or credit union?

If you already have a great relationship with a bank or credit union — or have heard good things about one by word of mouth — we absolutely recommend checking to see what kinds of loan it can offer you. Credit unions in particular have some great rates for those who qualify.

One of the best we found during our research was USAA, a military credit union that covers not just military members, but also their families — even down to grandchildren and beyond (provided that their parents have USAA insurance). Its APRs for debt consolidation loans max out at 10.99%, which only one other of our contenders (Western Credit Union) could match. Saxman, who has USAA car insurance, highly recommends it, along with the similar Navy Federal Credit Union.

Does a lender need to be FDIC-insured?

Not necessarily. Of our top picks, Marcus, Lending Club, and Avant are backed by the FDIC, but when we asked our experts whether this mattered, the answer was a unanimous no. While insurance from the FDIC is crucial for savings accounts, when you take out a loan, you’re not counting on a bank or company to safeguard your money. If your lending company goes out of business, another company will buy out its loans, and you’ll pay that new lender instead.

Does a good credit score guarantee I’ll get approved for a loan?

Even if you have the right credit score to qualify, you still might not get approved for a loan. We discovered this firsthand: One of our testers who has an Excellent credit score was denied a loan from both Prosper and Avant. In its denial email, Prosper explained that her credit history indicates she had “too few open trades,” and shuttled her to a loan broker partner called AmOne to shop around for other options. AmOne said she was a good match for SoFi, but SoFi denied her loan request as well, and recommended she try Avant. Avant denied her and sent her back to AmOne, which again recommended SoFi. A whirlwind — and no loan.

Another tester was approved for Prosper, but denied by Avant. A third tester was denied by Prosper, but approved for Avant. Like we said, you’re going to need to shop around.

The Best Debt Consolidation Loans: Summed Up

Best For Minimum Credit Score Loan Amounts Loan Periods APR
Prosper Average Credit 640 $2,000 - $35,000 3 or 5 years 5.99% - 35.99%
Lending Club Average Credit 600 $1,000 - $40,000 3 or 5 years 6.16% - 35.89%
Marcus Average Credit 660 $3,500 - $40,000 3 - 6 years 6.99% - 24.99%
Upgrade Low Credit 620 $1,000 - $50,000 3 or 5 years 5.96% - 35.97%
Avant Low Credit 580 $2,000 - $35,000 2 - 5 years 9.95% - 35.99%
SoFi Excellent Credit ~700 $5,000 to $100,000 3 - 7 years 7.075% - 15.365%