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Last updated on Nov 20, 2019

The Best Debt Consolidation Loans

A straightforward application process to get the money you need at a rate you can afford ​
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How We Found the Best Debt Consolidation Loans

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7 Finance Experts Interviewed

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18 Online Lenders Examined

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8 Top Picks

The Best Debt Consolidation Loans

The best debt consolidation loans fold high-interest debt from several sources into a single, manageable payment with a lower interest rate, ultimately helping you pay off everything faster. They should also offer you 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 8 Best Debt Consolidation Loans

    The Best Debt Consolidation Loans: Summed Up

    Prosper Lending Club Marcus Upgrade Avant SoFi Best Egg Discover Personal Loans
    Best for Easy Pre-Approval Average Credit Customer Service Flexible Loan Amounts Low Credit Low APR Online Resources Decent Repayment Periods
    Minimum credit score 640 600 660 620 580 ~700 640 n/a*
    Loan amounts $2,000 – $40,000 $1,000 – $40,000 $3,500 – $40,000 $1,000 – $50,000 $2,000 – $35,000 $5,000 – $100,000 $2,000 – $35,000 $2,000 – $35,000
    Loan periods 3 – 5 years 3 – 5 years 3 – 6 years 3 – 5 years 2 – 5 years 3 – 7 years 3 – 5 years 3 – 7 years
    APR 6.95% – 35.99% 6.95% – 35.89% 5.99% – 28.99% 7.99% – 35.89% 9.95% – 35.99% 5.99% – 17.67% 5.99% – 29.99% 6.99% – 24.99%
    Check Rates Check Rates Check Rates Check Rates Check Rates Check Rates Check Rates Check Rates

    *Provider does not list minimum credit scores on its site.

    How We Chose the Best Debt Consolidation Loans

    Online lenders

    We focused our search on online lenders for three reasons: They’re better suited to offering personal loans than banks are, they’re more widely available, and you don’t have to be a member to get a loan.

    To gain a more concrete understanding of debt consolidation loans and when they’re useful, we sought the advice of financial experts to walk us through tips and important considerations when it comes to the lending industry. “To lenders, personal loans are the riskiest loans we do,” says Bill Dallas, co-founder and CEO of Cloudvirga. Banks are risk-averse, and unsecured personal loans, which don’t require you to put up collateral, don’t provide them the same recourse that secured loans do. “A bank has directors and board members, and they have very strict guidelines that they cannot change,” says Snowe Saxman, a success, wealth, and women’s expert. By comparison, online lenders are often self-regulated. We found that this translated to a simpler approval process. Being approved for a loan — and getting that money in your bank account — can happen a lot faster with an online lender (we’re talking hours or days as opposed to weeks).

    APR between 5% and 36%

    APR, or annual percentage rate, is the amount you’ll pay each year to borrow money. (Take out a $500 loan at 10% APR and you’ll pay $50 in interest.) Most debt consolidation lenders fall between 5% and 40% APR, but the best (read: lowest) rates will only be offered to borrowers with the strongest credit history, so having the option to obtain a low APR is key. This is especially important when considering lenders with extremely high maximum APRs — for example, NetCredit’s rate can go all the way up to 155%!

    Origination fees between 0% and 6%

    These are the administrative fees a lender charges — basically, the payment it takes for setting you up with a loan. Like APR, origination fees fall into a pretty tight clump among personal loans; most are in the 0%–6% range. We thought about eliminating any lenders that included origination fees altogether, but only a few (including SoFi and Marcus, two of our top picks) don’t charge it. And a loan that includes an origination fee might end up giving you a better APR that will cost you less in the long run. So instead, we capped origination fees at 6%. Upstart, previously one of our honorable mentions, was disqualified at this stage thanks to an increase in its origination fee — it now reserves the right to charge as much as 8%.

    Fixed interest rates

    Fixed interest rates stay the same throughout the lifetime of the loan, while variable interest rates may start low, but can go up at an unpredictable rate (they do tend to be capped, though, so they won’t jump from, say, 6% to 155%). For many, predictability is the safer way to go when taking out a loan — this way you can assure you won’t be hit with any surprises you’ll suddenly have to squeeze into your budget. We made sure our top picks offered fixed rates as an option, although a few of our top picks offer fixed and variable interest rates. It’s best to make sure you’re comparing apples to apples, not a low but unstable variable rate to a higher but reliable fixed rate.

    Streamlined application processes

    When trying to decide whether you’re eligible for a debt consolidation loan, the last thing you should have to worry about is your inquiry significantly docking your credit score. For this very reason, we only kept companies that took “soft pulls” on your credit upon applying. Unlike “hard pulls,” these are mainly for your records, meaning the lender itself won’t investigate your credit beforehand. This allowed us to test each contender’s application process to see where we stood on receiving a loan (without taking hits to our credit score) and how clearly the lender communicated the results.

    Lenders should be transparent before the application process — you don’t want to waste time applying for a loan with a credit score requirement in the upper 700 range if yours in the low 600s. However, it’s not always this cut-and-dried, and you’re not going to know the full story on where you stand until you receive an actual report on your application or rate check. We wanted to cut some of the middleman for borrowers by grouping our picks by creditworthiness (good, average, bad) which is one of the ways lenders filter applicants. But this is just a starting point — even if you do fall perfectly within the credit requirements, you’re not automatically guaranteed a loan, so it’s important to consistently compare lender requirements.

    Best for Easy Pre Approval
    Discover

    Prosper

    Pros

    Low maximum APR
    Higher repayment periods
    No origination fee

    Cons

    High unsuccessful payment fees

    Why we chose it

    Easy pre-approval process

    Like most of our picks, Prosper’s pre-approval process is 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’re happy with what you’re getting.

    Clear communication

    As part of our testing, we applied for loans with each of the lenders. Prosper denied us, but explained to us in transparent terms the reason our tester had been declined. 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.

    Lenient debt-to-income ratio

    Prosper is more lenient about debt-to-income (DTI) ratios than our other top picks. Most companies cap DTI around 30%, but Prosper will consider borrowers as long as your DTI ratio is lower than 50%. If you have decent credit but are running a little high on debt, we recommend looking into Prosper’s loans.

    Points to consider

    Inflexible 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, Prosper sets the due date for your monthly bill, and you’re not able to change it without consulting Prosper. If you miss a payment, you’ll be charged a late fee of either 5% of the unpaid installment or $15, whichever is greater.

    Higher income and FICO score

    There is no minimum income amount required, however, the average annual income for borrowers was a little more than $98,000, based on data collected between March and August, 2018. The company’s minimum credit score is also 640, but the average for users is around 710 — which is something to consider before applying, especially if you’re near the company’s minimum credit score requirement.

    Best for Average Credit
    Best Egg

    Lending Club

    Pros

    Decent APR range
    Quick turnaround
    Great educational resources

    Cons

    Fair loan range

    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.

    It’s worth mentioning that Lending Club may have stricter borrower requirements than some of our other top picks for average credit, as the average Lending Club borrower holds a FICO score of around 700 and a debt-to-income (DTI) ratio of about 12%. The maximum DTI is 30%, so if you’re carrying more than this, you’ll want to consider another lender.

    Fair minimum APR

    At only 6.95%, Lending Club doesn’t have the lowest minimum APR we saw but we have seen higher minimums from Avant and Upgrade. However, that doesn’t mean 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 lower than most. LendingClub has a maximum APR of 35.89%, which is 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, which is fairly average for our top picks. (Both Marcus and Prosper go up to $40,000). While this isn’t as high as some other lenders — SoFi goes up to $100,000, and Upgrade goes to $50,000 — we still thought it was a great option for those with average credit scores looking for bigger loans. LendingClub also holds one of the lowest minimums of any of our top picks at $1,000 (along with Marcus and its $1,000 minimum), meaning you don’t have to take on more debt than you really 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. Data from 2018 reflects this trend, as lower-grade loans continue to wane.

    Extra fees

    Lending Club charges a higher check processing fee than some of our other contenders, meaning it will cost you $7 each time you pay your bill with a check rather than electronically. So if you prefer checks, you could be shelling out $84 extra dollars a year in fees. It also has steeper 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 Customer Service
    Prosper

    Marcus by Goldman Sachs

    Pros

    Easy pre-approval process
    Clear communication
    Maximum debt-to-income ratio

    Cons

    Inflexible payment schedule
    Higher income and FICO score

    Why we chose it

    No fees

    Marcus promises “$0 fees. Ever.” The company doesn’t charge origination, late, or unsuccessful payment fees. This doesn’t necessarily mean it will 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 minimum APR

    Marcus’s minimum APR was much lower than other lenders in serving customers with average credit. Minimums only go up to 5.99% which is the lowest minimum APR we have seen in our research.

    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 and never once nudged us into getting 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 maximum APR

    The maximum APR on Marcus’s debt consolidation loans was a little higher than most of our top picks (28.99% versus SoFi’s 17.67% or Discover’s 24.99%). If you’re eligible for a SoFi or Discover debt consolidation loan, it might be worth checking these out for the lower APR ranges.

    Best for Flexible Loan Amounts
    Lending Club

    Upgrade

    Pros

    Easy pre-approval process
    Fair minimum APR
    Flexible loan amounts

    Cons

    2016 controversy
    Extra fees

    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
    Marcus by Goldman Sachs

    Avant

    Pros

    No fees
    Low minimum APR
    Customer service
    Easy pre-approval process

    Cons

    Higher maximum APR

    Why we chose it

    Lowest minimum credit score required

    In general, the lower your credit score, the fewer options you have when it comes to obtaining a loan. At 580, Avant’s minimum credit score is a full 40 points lower than Upgrade’s, making it (theoretically) accessible to the roughly 80% of Americans who have scores above 600. So, if your credit score lingers toward the bottom of this range, Avant is your best bet.

    After paying off your loan in-full, you can also become eligible to refinance your loan, which could land you more funds or a lower APR.

    Points to consider

    Mobile app

    AAlong with SoFi, Avant was one of only a few 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 3.4-star rating on roughly 966 Google Play reviews, and 3.1-star out of about 209 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.

    Customer reviews

    The number of one-star reviews for Avant surpasses any other loan company on ConsumerAffairs. Most of these reviews complain about an non-intuitive process and a lack of customer support. While no two customer experiences are going to be the same, the overall sentiment was lower for Avant than it was for our other top picks.

    High minimum APR

    Upgrade was the next closest at 7.99%, and most of them stayed between 5% and 6%. However, 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 offsets with a low maximum APR, either — its 35.99% maximum ties Prosper for the highest APR.

    Best for Low APR
    Upgrade

    SoFi

    Pros

    Low minimum credit score
    Educational resources
    Flexible loan amounts

    Cons

    Newer company

    Why we chose it

    Great terms for borrowers with high credit scores

    SoFi takes care of its customers: Its $5,000–$100,000 loan range and max fixed 17.67% APR (with AutoPay) blow most of our other top picks out of the water. Granted, you’ll have to jump through higher hoops to get those terms. SoFi doesn’t list a minimum credit score, but we chatted with a member of SoFi’s public relations team who confirmed that SoFi borrowers generally have scores above 700.

    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 1,078 ratings in the Google Play store, with most users having pretty positive feedback on the app’s functionality. Sofi boasts a stellar 4.8 stars in the App store, based on more than 8,300 votes — the highest rating you can expect to see from an app like this.

    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 2019, 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 — we just appreciate that SoFi doesn’t stack fees on top of the APR you’re already paying.

    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.

    Best for Online Resources
    Avant

    Best Egg

    Pros

    Lowest minimum credit score required

    Cons

    Mobile app
    Customer reviews
    High minimum APR

    Why we chose it

    Decent APR range

    Best Egg had a decent APR range from 5.99% to 29.99%. While these are not the lowest APRs around (that honor belongs to SoFi), they are nowhere near the highest. This means that interest rates can be considerably lower with Best Egg than, say, Avant, and that means you’ll be able to pay off your loan (and all that interest) a lot quicker.

    Quick turnaround

    According to Best Egg, “your money could be deposited into your bank account in as little as one business day.” This is, of course, subject to loan approvals and verification but it’s encouraging to think you could start consolidating your debt so quickly.

    Great educational resources

    Best Egg’s site is home to an expansive resource section full of helpful articles on a range of topics, from understanding credit to managing debt. These are both important areas of focus considering that a lot of people getting a debt consolidation loan are doing so in order to manage credit card debt. Articles are easy-to-follow and break down some of the more complex aspects of debt consolidation to help you make an informed decision.

    Points to consider

    Fair loan range

    Best Egg has a fairly average maximum loan size. At $35,000 max, the company stands shoulder to shoulder with other companies, like Avant. However, anyone needing a larger loan will have to look elsewhere to Lending Club or SoFi, which cap out at $100,000.

    Best for Decent Repayment Periods
    SoFi

    Discover

    Pros

    Great terms for borrowers with high credit scores
    Networking opportunities
    Mobile app
    No fees

    Cons

    Targeted towards affluent borrowers

    Why we chose it

    Low maximum APR

    The max APR for Discover Personal Loans caps out at 24.99%, so your interest rates won’t get any higher than that with Discover. This makes it easier for you to get that debt consolidation loan paid off as quickly as possible.

    Higher repayment periods

    Discover Personal Loans offers repayment periods from three to seven years. This means more time to pay off your debt consolidation loan. It also means the possibility of lower monthly payments if you were, say, going to take out the same size loan but with a shorter repayment period.

    No origination fee

    More than half of our top picks feature an origination fee to cover the cost of processing the loan, but Discover was one of the few that completely foregoes this upfront cost. This means you won’t have to deal with tacking on an additional cost and adding to your debt.

    Points to consider

    High unsuccessful payment fees

    If you’re going to sign up with Discover, you’re going to need a reliable income stream to keep up with your monthly payments. This provider had some of the highest unsuccessful payment fees at $39. If you’re concerned about your ability to keep up with monthly payments and don’t want to leave anything to chance, Marcus and SoFi both waive this fee.

    How to Find the Best Debt Consolidation Loans

    Decide on the loan amount and repayment plan you need

    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” to 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.

    Consolidate credit card debt without a loan

    Loans aren’t the only route you can take when it comes to paying off debt. One alternative is transferring debt onto a credit card with a 0% introductory balance transfer APR, that way you can evade interest altogether. However, you need to make sure you don’t miss any payments (you aren’t invincible to those penalty APRs) and pay debt before the introductory offer ends, which typically lasts around a year.

    Banking Terms Defined

    APR: Annual percentage rate — the annual rate charged for borrowing money or money earned through an investment. In other words, it’s the cost of the loan. APR is expressed as the actual yearly cost of funds provided over the term of the loan.

    Credit Score: A number formulated and assigned to a person that helps indicate their ability to repay a loan.

    Debt Consolidation: In order to pay off numerous liabilities and/or consumer debts, debt consolidation allows you to take out a new loan, usually with more favorable payoff terms (lower monthly payments and lower interest rates) and condense the existing debts into one larger, more manageable debt.

    DTI: Debt-to-income. A personal finance measure that compares your overall income to the total amount of debt you have. This is a way to measure your capacity to manage and repay the money you borrow.

    FDIC: Federal Deposit Insurance Corporation. An independent federal agency that insures deposits for U.S. banks in the event of a banking failure or catastrophe.

    Hard Inquiry/Hard Pulls: When a financial institution checks your credit before making a lending decision. This could lower your credit score by a few points, and having too many hard pulls in a short amount of time could label you as a higher-risk customer to lenders. Hard pulls typically happen when you’re taking out a loan or credit card, or when you’re applying for a mortgage. Hard pulls typically stay on your credit report for about two years and cannot occur without your permission.

    Interest rate: Normally expressed as an annual percentage of the principal, interest rate is the amount a lender charges for the loan.

    Soft Inquiry/Soft Pull: A preliminary review of a person’s credit history, performed by a financial institution, lender, or other entity, usually for regular account maintenance or to pre-screen you for some service or product. This will not dock points from your credit score, and it can occur without your consent.

    Debt Consolidation Loans FAQ

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