Best Personal Loans for Debt Consolidation

Marcus by Goldman Sachs offers the best personal loan with low fees

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Personal loans for debt consolidation are personal loans that are taken out to consolidate your debt. These loans may be offered by online or brick and mortar lenders and come with a variety of different rates, terms, and borrower qualifications. They can help you combine your debts into one payment that is more affordable and easier to manage. 

The best personal loans for debt consolidation offer competitive interest rates, lower fees, a variety of repayment terms, and are accessible to borrowers with good and bad credit.

Best Personal Loans for Debt Consolidation of May 2022

Best Overall and for Low Fees : Marcus by Goldman Sachs

  • Starting interest rate: 6.99%
  • Minimum credit score: 660
  • Loan terms (range): 36-72 months
Why We Chose It

Our choice for best overall and low fees, Marcus by Goldman Sachs has a strong industry reputation, doesn’t charge any fees to its borrowers, and offers a range of flexible loan terms. 

Pros and Cons
  • No fees

  • Adequate loan limit

  • Easy application process

  • Higher APRs

  • Need good credit to qualify for the lowest rates

  • No joint applications

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+

Read the full review: Marcus Personal Loans

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



  • Starting interest rate: 5.99%
  • Minimum credit score: 680
  • Loan terms (range): 36-84 months
Why We Chose It

Discover is known for its flexible payment options, including personal loans with repayment times of up to seven years. 

Pros and Cons
  • Seven-year repayment option

  • Low $2,500 minimum to borrow

  • 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 5.99%-24.99%
Loan Terms 36-84 months
Fees Late fee of $39, no origination fee
Time to Receive Funds 1 day or more
Recommended Credit Score 680+

Read the full review: Discover Personal Loans

Best for Consolidating Credit Card Debt : Payoff

  • Starting interest rate: 5.99%
  • Minimum credit score: 550
  • Loan terms (range): 24-60 months
Why We Chose It

Payoff will help you set up a debt reduction plan and it offers competitive rates to consolidate your debt.

Pros and Cons
  • Lower starting APR

  • Debt payoff plan

  • Origination fee of 0% to 5%

  • Higher minimum starting loan amount

Payoff Personal Loan Details
Loan Amounts $5,000-$40,000
Fixed APR 5.99%-24.99%
Loan Terms 24-60 months
Fees Note late fee, origination fee between 0%-5%
Time to Receive Funds Unlisted
Recommended Credit Score 550+

Read the full review: Payoff Personal Loans

Best for Low Rates : LightStream



  • Starting interest rate: 3.99%
  • Minimum credit score: 680
  • Loan terms (range): 24-84 months
Why We Chose It

LightStream offers competitive interest rates for borrowers with high FICO scores and it also offers rate reductions for setting up auto-pay.* 

Pros and Cons
  • High maximum loan amounts

  • Rate Beat program

  • Same day funding on some loans

  • Need a high credit score

  • $5,000 loan minimum

  • No pre-qualification option

LightStream Personal Loan Details
Loan Amounts $5,000-$100,000
Fixed APR 3.99%-19.99% with autopay
Loan Terms 24-84 months
Fees No fees
Time to Receive Funds As soon as the same day
Recommended Credit Score 680+

Read the full review: LightStream Personal Loans

Best for Large Debts : SoFi



  • Starting interest rate: 6.99%
  • Minimum credit score: 680
  • Loan terms (range): 24-84 months
Why We Chose It

SoFi offers debt consolidation loans with higher loan limits and fixed and variable rates that are ideal for taking on large debt. 

Pros and Cons
  • High maximum loan amount

  • Unemployment protection

  • Loan terms of up to seven years

  • Income requirements can be stricter than other companies

  • Need high credit score

  • No loans under $5,000

SoFi Personal Loan Details
Loan Amounts $5,000-$100,000
Fixed APR 6.99%-21.78% with autopay
Loan Terms 24-84 months
Fees No late fees or origination fees
Time to Receive Funds Within a few says
Recommended Credit Score 680+

Read the full review: SoFi Personal Loans

Best for Bad Credit : Upgrade

Upgrade logo

 Upgrade logo

  • Starting interest rate: 5.94%
  • Minimum credit score: 580
  • Loan terms (range): 28-84 months
Why We Chose It

Upgrade offers low minimum loan amounts to borrowers who don’t have good credit. 

Pros and Cons
  • Fast funding

  • Prequalification won’t affect credit

  • Higher interest rates

  • Loans come with origination fees

  • Late fees and administrative fees

Upgrade Personal Loan Details
Loan Amounts $1,000-$50,000
Fixed APR 5.94%-35.97%
Loan Terms 24-84 months
Fees Late fee of $15, administrative fee up to 8%
Time to Receive Funds Within one business day
Recommended Credit Score 580+

Read the full review: Upgrade Personal Loans

Final Verdict

For those looking for a personal loan for debt consolidation, all of the companies on our list have something to offer, whether it’s a lower interest rate, higher maximum loan amount, or longer repayment terms. When picking a loan, however, make sure you check all the requirements including credit score as many lenders won’t lend to those with poor credit.  

If you’re not sure which lender to pick, we recommend checking out Marcus by Goldman Sachs. Besides being backed by a financial powerhouse, the company offers an easy application process and doesn’t charge origination or late fees.

Compare The Best Personal Loans for Debt Consolidation

Lender Starting Interest Rate Minimum Credit Score Loan Terms (range) Maximum Loan Amount
Marcus by Goldman Sachs Best Overall and Low Fees 6.99% 660 36-72 months $40,000
Discover Personal Loans Best for Flexible Repayment Options 5.99% 680 36-84 months $35,000
Payoff Best for Consolidating Credit Card Debt 5.99% 550 24-60 months $40,000
LightStream Best for Low Rates 3.99% 680 24-84 months $100,000
SoFi Best for Large Debts 6.99% 680 24-84 months $100,000
Upgrade Best for Bad Credit 5.94% 580 24-84 months $50,000

Guide to Choosing the Best Personal Loan for Debt Consolidation

Are You in Need of a Personal Loan?

Before you apply for a personal loan, you will want to assess your needs to see if you need one, when you need it, and for what purpose. You may need a personal loan to consolidate debt that has been accruing. A personal loan may be able to help you simplify your bills, reduce interest payments, and help you get out of debt sooner. If you’re considering a personal loan for emergency funds, medical expenses, or other reasons, you might want to look at other options instead. 

Compare Personal Loan Lenders

Before choosing a lender, you will want to compare several lenders. You will want to consider the following factors when comparing lenders:

  • Loan amount: You should know the minimum and maximum loan amounts the lender offers and make sure your desired loan amount falls within that range. You don’t want to borrow more (or less) than what you need. Make sure the lender you select offers the amount you’re looking for or you might need to take out another loan. 
  • Interest rate: Is the rate fixed or variable? What will your rate be? What are rates based on and how can you lower your rate? The better your credit score, the lower your rate is usually. This matters because paying high interest rates costs you more money, and you’ll want to pick a lender that charges the lowest interest.  
  • Fees: Know what fees the lender charges upfront. Look for prepayment fees, origination fees, and late fees. The more fees, the more your loan balance and monthly repayment amount will be. You’ll want to choose a lender that has low to no fees attached to the loan. 
  • Repayment periods: You need to know how long you have to pay back the loan and when your payments are due. Some lenders offer flexible terms and others are more stringent. Compare the different options between lenders, and also consider if the shorter term might come with a larger monthly payment. Those payments might not fit your budget. 
  • Funding times: If you need your money in a hurry, choose a lender with next-day loan funding. Funding times vary, but they are usually within a few days of an approved loan application. 

Apply for a Personal Loan  

You’ll typically apply for a personal loan online, over the phone with an agent, or at a bank or credit union branch with a representative. You will generally need a form of photo identification, your Social Security number, and proof of income. Lender requirements vary but bank statements, pay stubs, and tax returns are generally accepted. 

Keep in mind that having your finances in order improves your chances of approval and a good credit score improves your chances of getting a low interest rate.

Frequently Asked Questions

What Is Debt Consolidation and 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.

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.

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.

Debt reduction software can help you organize and execute a debt repayment plan that includes debt consolidation as one of its strategies.

It’s important to have a broad 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 and Cons of Debt Consolidation

  • 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

  • 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

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.


To choose the best personal loans for debt consolidation, we considered company reputation, time in business, and other factors including fees, interest rates, repayment terms, minimum credit score requirements, and minimum and maximum loan amounts.

*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of 3 years would result in 36 monthly payments of $303.99.

Article Sources

  1. Marcus. "Personal Loans." Accessed Feb. 7, 2022.

  2. Discover. "Personal Loans with No Origination Fees | Discover." Accessed Feb. 7, 2022.

  3. Payoff. "Payoff Credit Card Personal Loan." Accessed Feb. 7, 2022.

  4. Lightsteam. "LightStream | Loans for Practically Anything." Accessed Feb. 7, 2022.

  5. SoFi. "Personal Loans - Fixed Rates Starting at 5.74% APR | SoFi." Accessed Feb. 7, 2022.

  6. Upgrade. "Upgrade - Personal Loans, Cards and Rewards Checking." Accessed Feb. 7, 2022.