Best Personal Loans for Debt Consolidation

Find a personal loan for debt consolidation and make debt repayment easier

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One way to consolidate credit card debt and other types of debt is with a personal loan. Even better, the best personal loans for debt consolidation put all your debt in one place, and might also offer lower interest rates and fees. To help you manage your debt, we reviewed over 50 lenders, evaluating each one for how much you can borrow, interest rates, fees, and more to determine the best debt consolidation loans to help you get out of debt quicker. Each loan was chosen with different factors in mind so that, no matter your specific circumstances, you can work toward paying off your debt. These are the best debt consolidation loans to consider.

Best Debt Consolidation Loans of May 2020

Lender Why We Picked It Fixed APR Loan Amounts Terms Recommended Credit Score
Marcus by Goldman Sachs Best Overall and Low Fees 6.99%-19.99% $3,500-$40,000 36-72 months 660+
Discover Best for Flexible Repayment Options 6.99%-24.99% $2,500-$35,000 36-84 months 680+
Payoff Best for Consolidating Credit Card Debt 5.99%-24.99% $5,000-$35,000 24-60 months 640+
LightStream Best for Low Rates 5.95%-19.99% with autopay $5,000-$100,000 24-84 months 680+
SoFi Best for Large Debts 5.99%-19.96% with autopay $5,000-$100,000 24-84 months 680+
Avant Best for Bad Credit 9.95%-35.99% $2,000-$35,000 24-60 months 600+

Marcus by Goldman Sachs: Best Overall and for Low Fees

Marcus

Marcus by Goldman Sachs comes with no fees and you can borrow amounts from $3,500 up to $40,000. The fact that there are no late fees in addition to no origination fees, and that rates are relatively low—6.99% to 19.99% APR—makes Marcus the best overall debt consolidation loan and the best for low fees on our list. While you should still make your payments on time to help your credit score, you won’t pay a fee if you make a mistake. You do need relatively good credit to qualify for the lowest rates, though, so keep that in mind. Loan terms range from 36 to 72 months (three to six years).

What We Like
  • No fees

  • Adequate loan limit

  • Easy application process

What We Don't Like
  • Good credit recommended

  • APR could be lower

Marcus by Goldman Sachs Personal Loan Details

Loan Amounts $3,500-$40,000
Fixed APR 6.99%-19.99%
Loan Terms 36-72 months
Fees No late fees or origination fees
Time to Receive Funds As little as 1 to 4 business days
Recommended Credit Score 660+

Discover Personal Loans: Runner-Up and Best for Flexible Repayment Options

Discover

Discover’s personal loans are a solid runner-up. Like Marcus, you may be able to secure an APR between 6.99% and 24.99%, and there are no fees, but you can only borrow up to $35,000. However, Discover is known for its flexible payment options, including personal loans with repayment times of up to seven years, making it a good second choice for those with good credit. SoFi and LightStream also offer a seven-year repayment term.

What We Like
  • Seven-year repayment option

  • Low $2,500 minimum to borrow

What We Don't Like
  • Good credit recommended

  • May take longer than one day to receive your funds

Discover Personal Loan Details

Loan Amounts $2,500-$35,000
Fixed APR 6.99%-24.99%
Loan Terms 36-84 months
Fees Late fee of $39, no origination fee
Time to Receive Funds 1 to 7 business days
Recommended Credit Score 680+

Payoff: Best for Consolidating Credit Card Debt

Payoff

Payoff bills itself as ideal to help consolidate credit card debt, and for good reason. Payoff will help you put together a debt reduction plan and help you consolidate your credit cards to make it happen. Payoff also has relatively low rates, starting from 5.99% to 24.99% APR. You can borrow between $5,000 and $35,000, and Payoff lends to individuals with slightly lower credit scores (640 or higher) than you might see with Marcus or Discover. Loan terms range from two to five years.

What We Like
  • Lower starting APR

  • Debt payoff plan

What We Don't Like
  • Origination fee of 0% to 5%

  • Higher minimum starting loan amount

Payoff Personal Loan Details

Loan Amounts $5,000-$35,000
Fixed APR 5.99%-24.99%
Loan Terms 24-60 months
Fees Note late fee, origination fee between 0%-5%
Time to Receive Funds As little as 2 to 5 business days
Recommended Credit Score 640+

LightStream: Best for Low Rates

LightStream

LightStream offers some of the lowest rates. You could potentially get an APR between 5.95% and 19.99% if you have excellent credit and sign up for automatic payments. Plus, LightStream will give you a rate that’s 0.10 percentage points lower than the rate you’re offered from a competing lender, as long as the loan has the same terms. You do need to borrow at least $5,000, but there are no origination or prepayment fees. And for larger loans ($25,000 to $100,000), you can get a longer repayment option of 73 to 84 months (about six to seven years). If you’re not happy with your loan for some reason, LightStream will even pay you $100 after you fill out a questionnaire and submit feedback.

What We Like
  • Low APR with autopay

  • Rate Beat Program

  • Fast funding (same day in some cases)

What We Don't Like
  • Might need a better credit score to qualify

  • $5,000 minimum

LightStream Personal Loan Details

Loan Amounts $5,000-$100,000
Fixed APR 5.95%-19.99% with autopay
Loan Terms 24-84 months
Fees No late fees or origination fees
Time to Receive Funds Same day or 1 business day
Recommended Credit Score 680+

SoFi: Best for Large Debts

SoFi

While many of the best debt consolidation loans have borrowing limits of $35,000 to $40,000, SoFi differentiates itself by offering personal loans of up to $100,000 with fixed rates that range from 5.99% to 19.96% APR when you sign up for autopay. LightStream also offers loans of up to $100,000, but you may need excellent credit in order to receive a loan for that amount. You’ll also need relatively good credit to qualify for any personal loan with SoFi, and you have to borrow at least $5,000.

SoFi does offer one other helpful feature: unemployment protection. If you lose your job (and it wasn’t your fault), SoFi allows you to pause your payments in three-month increments, for up to a total of 12 months. Interest will still accrue, but you’ll have some flexibility while you look for a new source of income.

What We Like
  • High borrowing limit

  • Unemployment protection

  • Loan terms of up to seven years

What We Don't Like
  • Good credit recommended

  • High minimum amount to borrow

  • Must meet income requirements

SoFi Personal Loan Details

Loan Amounts $5,000-$100,000
Fixed APR 5.99%-19.96% with autopay
Loan Terms 24-84 months
Fees No late fees or origination fees
Time to Receive Funds Typically within a week
Recommended Credit Score 680+

Avant: Best for Bad Credit

Avant

Avant may be a good choice for a personal loan if you have poor credit, such as a credit score below 600. Many of the best debt consolidation loans require that you have a credit score of at least 600, and while Avant states that its customers typically do have scores between 600 and 700, it does aim to offer personal loans to a wide variety of borrowers. So if your credit score isn’t top notch, you may still be able to borrow between $2,000 and $35,000. However, there’s an administration fee of 4.75%, and APRs range from 9.95% to 35.99%. Loan terms range from 24 to 60 months (two to five years).

What We Like
  • Funds as soon as next business day

  • Options for those with fair or poor credit

  • Low $2,000 minimum to borrow

What We Don't Like
  • High starting APR

  • Fairly high administration fee

Avant Personal Loan Details

Loan Amounts $2,000-$35,000
Fixed APR 9.95%-35.99%
Loan Terms 24-60 months
Fees Late fee of $25, administrative fee up to 4.75%
Time to Receive Funds At least 1 business day
Recommended Credit Score 600+

What Is Debt Consolidation & How Does It Work?

Debt consolidation is a method of paying down your debt by borrowing a larger loan that you then use to pay off multiple smaller loans or credit cards. You may be able to consolidate high interest credit card debt or other types of debt through borrowing a large amount.

One of the main advantages of debt consolidation is that it puts all of your debt “under one roof.” Rather than trying to keep track of several monthly payments and interest rates, you only have to make one, fixed monthly payment. Additionally, depending on the rates you have across your accounts, you may end up with a lower overall interest rate, which could help you save money on the amount you pay in interest.

As of May 1st, the average interest rates advertised by the 26 lenders we track is 16.83%.

It’s important to have a debt repayment plan when you use debt consolidation, though. Once you pay off your smaller loans and credit cards, you might be tempted to get into even more debt. This can be an issue with credit cards since paying them off through debt consolidation can “free up” more room to spend on those lines of credit. If you aren’t careful, you could accumulate a large amount of debt again.

Pros & Cons of Debt Consolidation

Pros
  • All debt is in one, manageable place

  • Potential to reduce the overall interest rate and save money

  • May help you get out of debt faster

Cons
  • Interest rates may be high if you have poor to fair credit

  • Newly freed-up space on credit cards could tempt you to spend again

  • Origination fees could add to the cost of the new loan

When Does Debt Consolidation Make Sense?

If you’re hoping to simplify your bills and potentially get out of debt faster, debt consolidation might help. Debt consolidation is most likely to make sense when you have good credit, but your debt amounts might be too high to complete a credit card balance transfer. Additionally, a debt consolidation loan may also be a good move if you don’t want to use the equity in your home to manage your unsecured debt.

Alternatives

If a debt consolidation loan doesn’t fit your budget or financial situation, there are alternatives to consider.

  • HELOC: A home equity line of credit, or HELOC, is based on the equity in your home. You might be able to pay off a large amount of debt at a reasonable interest rate. However, you’re securing that line of credit with your home, so if you run into any financial problems in the future, you could potentially lose your house.
  • Credit card balance transfer: It’s possible to use a balance transfer credit card to consolidate and pay off your debts via one line of credit. Many balance transfer cards offer 0% APR for a certain introductory period of time, too, so you can save on paying any interest for, say, 21 months. You may be able to pay off your debt faster when the entire payment goes toward one low-interest balance.
  • Debt snowball: Rather than putting everything together at once, the debt snowball method has you tackle your smallest balance first while maintaining your minimum payments on all other debts. As each debt is paid off in full, you add your old payment amount to the next debt on your list, accelerating the rate at which you pay down your next debt. Ideally, over time, you’ll eliminate each debt one by one until you’re debt free.
  • Debt avalanche: Similar to the debt snowball method, this strategy starts with your highest-interest debt. The debt avalanche method doesn’t offer the quick psychological win of the debt snowball, but it can help you save you money on interest and may be faster.

How Should I Choose a Personal Loan for Debt Consolidation?

There’s no one way to determine the best debt consolidation loans. To find the right fit for you, start by figuring out what you need to accomplish. Decide what’s important, whether it’s fast funding, low or no fees, or the ability to consolidate a large amount of debt. Some lenders also offer longer repayment periods, which could lower the amount you pay per month.

Additionally, if you have poor to fair credit, you might need to look for a lender that specializes in offering personal loans to those with credit problems. Pay attention to origination fees and other costs, and compare your loan options. Depending on what you qualify for, you might have no choice but to pay an origination fee.

While checking your loan options with a lender may not affect your credit score, officially applying for and securing one will. Consider shopping around for the right personal loan within 30 days to reduce the number of inquiries to your credit. Securing the loan may ding your score, but if you stay on top of your payments, you could rebuild it.

How We Chose the Best Debt Consolidation Loans

Our writers spent hours researching loan options from more than 50 different lenders. Recommendations are based on personal loan companies offering a combination of good interest rates, loan terms, low fees, loan amounts, speed of funding, and more. These loan recommendations take into account that all borrowers have different needs and financial situations that may require loans that meet various priorities. Not every recommendation is right for every borrower, so consider all of your options before applying.

Article Sources

The Balance requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
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  2. Discover. "Personal Loans." Accessed March 23, 2020.

  3. Payoff. "Getting Approved." Accessed March 23, 2020.

  4. Payoff. "Rates & Terms." Accessed March 23, 2020.

  5. LightStream. "Debt Consolidation." Accessed March 23, 2020.

  6. SoFi. "Personal Loans." Accessed March 23, 2020.

  7. SoFi. "Disclosures & Disclaimers." Accessed March 23, 2020.

  8. Avant. "What Is the Typical Credit Score of an Avant Customer?" Accessed March 23, 2020.

  9. Avant. "Apply for a Loan Online, Check Your Loan Options." Accessed March 23, 2020.