Best Debt Consolidation Companies
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Debt consolidation can be a great way to simplify your finances by combining multiple debts into one easy payment, often at a lower interest rate. This can help you stay on top of your bills and even save some money on interest.
However, it’s important to choose a provider with low fees and favorable rates, ensuring the monthly payment is affordable. Be cautious of companies that charge high fees or offer interest rates similar to your existing debts. The key is finding a reliable lender that can offer a consolidation loan with better terms than your current debts.
In this article
Best debt consolidation companies
- Best for borrowing a large amount: SoFi
- Best for borrowing a little money: Upgrade
- Best for borrowers with weak credit: Upstart
- Best for those looking to work with a bank: Wells Fargo
- Best for no-fee loans: LightStream
- Best for quick consolidation: Reach Financial
Compare the best debt consolidation companies
Lender name | Description | Origination fees | Interest rates | Loan amount | Loan tenure |
SoFi offers a high wide of loan amount with same day funding. | 0% to 7% of the loan amount. | 8.99% to 29.49% | $5,000 to $100,000 | 24 to 84 months | |
Upgrade offers fast funding and has no prepayment fees. | 1.85% to 9.99% of loan amount | 9.99% to 35.99% | $1,000 to $50,000 | 24 to 84 months | |
Upstart offers quick funding in as soon as 1 day. | Up to 12% of loan amount | 7.8% to 35.99% | $1,000 to $50,000 | 36 or 60 months | |
A well known bank, Wells Fargo offers a wide loan amount and complete banking services. | None | 7.49% to 24.99% | $3,000 to $100,000 | 12 to 84 months | |
Lightstream offers no-fee loans. | None | 8.49% to 25.99% | $5,000 to $100,000 | 24 to 240 months | |
Reach Financial specialises in debt consolidation and credit card refinance. | 0% to 8% of loan amount | 5.99% to 35.99% | $3,500 to $40,000 | 24 to 60 months |
Best for borrowing a large amount: SoFi
Pros & cons
Pros
- High loan amount.
- Same day funding.
- Offers complete banking services.
- Can apply with a cosigner.
- Online instant prequalification.
Cons
- High interest rates.
- High minimum loan amount.
Loan amount: $5,000 to $100,000
APR: 8.99% to 29.49%
SoFi is a lender that provides personal, home, and student loans. It's a popular choice among those looking for personal loans because it charges no fees for these loans, and you can borrow up to $100,000.
As with all personal loans, you can use the funds from your SoFi loan to pay off your existing credit card debt. You'd then make one payment each month to SoFi, with interest, until you pay off your personal loan.
Interest rates on SoFi loans range from 8.99% to 29.49%. You'll qualify for an interest rate discount of 0.25% if you set up autopay on your loan payment. Your interest rate will depend on the strength of your credit, with borrowers with higher credit scores qualifying for loans with lower interest rates. SoFi says that its credit check will not hurt your credit score.
SoFi says 82% of its loan applications were funded on the same day. This means that most approved borrowers received their money the same day they applied for their loan.
The downside to a SoFi loan? It's not great for borrowers looking for a smaller amount of money. SoFi loans range from a minimum of $5,000 to a maximum of $100,000. If you want to borrow a smaller amount, you'll need to apply with a different lender.
Visit SoFi
Or read JoyWallet’s Review of SoFi.
Best for borrowing a little money: Upgrade
Pros & cons
Pros
- Offers multiple financial services.
- Receive funds in one business day.
- No prepayment fees.
Cons
- High origination fees.
- High credit score requirement.
- Limited loan amount upto $50,000.
Loan amount: $1,000 to $50,000
APR: 9.99% to 35.99%
Upgrade is a good choice if you need to borrow less money. This lender offers personal loans ranging from $1,000 to $50,000 and provides its funds quickly, too. The company says it sends your money directly to a bank account you choose within one day of approving you for a loan.
You can choose from loan terms of 24 to 84 months or two to seven years. Upgrade charges interest rates of 9.99% to 35.99%. The company says that your interest rate will depend on your credit score. Again, the higher your score, the lower your Upgrade personal loan’s interest rate will be.
The negative of applying with Upgrade? This lender charges an origination fee ranging from 1.85% to 9.99% of the amount you are borrowing. Upgrade will deduct this fee from your loan amount. You’ll qualify for a lower origination fee if you set up autopay on your loan.
Here’s an example, provided by Upgrade, on how this works: If you take out a $10,000 loan with a 36-month term and a 17.59% APR — made up of a 13.94% yearly interest rate and a 5% one-time origination fee — you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the three years of the loan, your payments would total $12,293.46.
Visit Upgrade.
Or read JoyWallet’s Review of Upgrade.
Best for borrowers with weak credit: Upstart
Pros & cons
Pros
- Higher chances of approval.
- Approves borrowers with poor credit.
- Easy to use platform.
Cons
- High origination fees.
- Higher minimum loan amounts in some states.
- No co-signing or co-borrowers.
Loan amount: $1,000 to $50,000
APR: 7.8% to 35.99%
Have a lower credit score? You might try applying for a personal loan with Upstart. This lender says it doesn't rely solely on your credit score when determining whether you qualify for a loan. It also looks at factors such as your education and employment and how likely you are to repay what you borrow. If you have a steady monthly income, Upstart might approve you for a personal loan even if you have a weaker credit score. Upstart says you'll need a credit score of at least 300 to qualify for a personal loan.
You can apply for an Upstart personal loan from $1,000 to $50,000. Your interest rate will range from 7.8% to 35.99%, depending on your credit and income. You also won't pay any prepayment fees if you pay off your debt consolidation loan before its term ends.
Upstart isn't quite as flexible regarding how long you have to repay your loan. The company only offers two options: a debt consolidation loan with a three-year term or one with five. Like other debt consolidation providers on this list, Upstart works quickly. If Upstart approves your loan application by 5 p.m. Eastern Standard Time on a regular business day, it will send your funds the next day.
On the negative side, Upstart charges an origination fee of as high as 12% of the amount you are borrowing. This amount will be deducted from your loan amount. If you borrow $10,000 and your origination fee is 10%, you'll be charged $1,000, which will be deducted from the amount you borrow, leaving you with $9,000.
Visit Upstart.
Or read JoyWallet’s Review of Upstart.
Best for those looking to work with a bank: Wells Fargo
Pros & cons
Pros
- Offers complete banking services.
- High loan amount.
- Quick approval.
- Offers a relationship discount.
- No origination fees.
Cons
- Requires borrowers to have an account with the bank for at least one year to be eligible for the loan.
- Does not clarify the credit score requirements on the website.
Loan amount: $3,000 to $100,000
APR: 7.49% to 24.99%
Do you prefer working with a brand-name lender? Maybe you have more trust in a national bank with an established history. If so, you might consider taking out a debt consolidation loan with Wells Fargo.
Wells Fargo offers personal loans from $3,000 to $100,000 and charges no origination fees or prepayment penalties. Depending on your credit, the bank also offers reasonable interest rates ranging from 7.49% to 24.99%.
Those interest rates include what Wells Fargo calls a "relationship discount" of 0.25%. To qualify for this discount, you must have a Wells Fargo consumer checking account and must make automatic payments on your debt consolidation loan from a Wells Fargo account. Wells Fargo says it usually approves or rejects loan requests on the same day you apply.
The other possible negative with a Wells Fargo loan? You must have had an open Wells Fargo account for at least 12 months before applying for one. If you need money now and are not already a Wells Fargo customer, this option might not work.
Visit Wells Fargo
Or read JoyWallet’s Review of Wells Fargo.
Best for no-fee loans: LightStream
Pros & cons
Pros
- No origination fees.
- Autopay discount.
- High loan amount.
- Long repayment term upto 12 years.
Cons
- No co-signer allowed.
- Requires a credit score of 660 or higher.
- Applicants need to have several years of credit history.
Loan amount: $5,000 to $100,000
APR: 8.49% to 25.99%
If you hate paying fees? A LightStream debt consolidation loan might be a good choice for you. LightStream charges no origination or prepayment fees.
LightStream also offers plenty of options for borrowers. LightStream offers debt consolidation loans for as little as $5,000 if you want to borrow a small amount of money. If you want to borrow more? You can take out a LightStream loan for as much as $100,000.
LightStream charges interest rates that range from 8.49% to 25.99%. If you sign up for autopay, you will receive an interest rate discount of 0.50%. To qualify for the lowest possible interest rate, you'll also need excellent credit, according to LightStream. Don't expect that 8.49% rate unless your credit score is at or above 800.
LightStream also offers its Rate Beat program. Under this program, LightStream will offer you an interest rate of .10% points lower than the rate offered by any competing lender's unsecured loan if approved for that lower rate no later than 2 p.m. Eastern Time, two business days before your loan funding.
Visit LightStream
Or read JoyWallet’s Review of LightStream.
Best for quick consolidation: Reach Financial
Pros & cons
Pros
- Low APR.
- Fast funding.
- Autopay feature.
Cons
- High origination fees.
- No co-signer or co-borrower option.
Loan amount: $3,500 to $40,000
APR: 5.99% to 35.99%
Looking for funds quickly? Reach Financial promises that within 24 hours of your loan approval, your funds will be available to pay the creditors named on your Truth-in-Lending Disclosure, the document that states important information about your loan, including how much you are borrowing and what interest rate you are paying.
There are some limits with a Reach Financial debt consolidation loan, though. You can only borrow from $3,500 to $40,000. And you can only choose a 24- to 60-month term for your loan or two to five years.
Interest rates, though, can be low. If you have good credit, you can qualify for an interest rate as low as 5.99%. Depending on your credit, your interest rate can soar as high as 35.99%. On the downside, Reach Financial charges an origination fee ranging from 0% to 8% of the amount you borrow.
As an example of how this works, Reach Financial states that if you are approved for a five-year loan of $10,000 with an interest rate of 8.93% and an origination fee of $500, your loan would have a total APR — a measure of the cost of your loan including both interest and fees — of 9.80%. You'd then pay $207.20 a month for 60 months until your loan is paid off, resulting in a total payment of $12,435.
Visit Reach Financial
Or read JoyWallet’s Review of Reach Financial.
Relieve $25k+ in Credit Card Debt or Personal Loan Debt With TurboDebt
- Relieve $25k+ in credit card debt or personal loan debt with this special relief program.
- TurboDebt has a Trustpilot rating of 5/5 based on 1288 reviews
- Subject to qualification and approval. $1,500 monthly income required.
- Apply in 5 minutes. If you qualify, chat online with a friendly online debt representative.
How does debt consolidation work?
Debt consolidation works by combining multiple debts, such as credit cards, medical bills, or personal loans, into a single loan. You apply for a debt consolidation loan, and if approved, use the loan amount to pay off all your existing debts. This means instead of making multiple payments to different creditors, you make one monthly payment to the consolidation loan provider.
Ideally, the new loan comes with a lower interest rate, which can reduce the amount you pay in interest over time and potentially lower your monthly payments. The goal is to simplify your financial management, reduce interest costs, and make it easier to stay on top of your debt payments. However, it’s important to ensure the terms of the consolidation loan—such as interest rate, fees, and repayment schedule—are favorable and affordable.
How to choose a debt consolidation company?
When choosing a debt consolidation company, start by comparing interest rates to ensure you're getting a loan with a lower rate than your current debts, which will help you save on interest over time. Be sure to review all potential fees, such as origination or prepayment penalties, as these can add to your costs. Look for loan terms that balance affordable monthly payments with the total interest paid over the loan's life. Research the company’s reputation by reading customer reviews and checking ratings with the Better Business Bureau (BBB) to ensure they are trustworthy and transparent.
Avoid companies that make unrealistic promises, like guaranteeing approval or eliminating all your debt, as these are red flags. Make sure the company’s eligibility requirements, like credit score and income, match your financial profile.
FAQs
What’s the difference between a debt consolidation loan and debt settlement?
Debt consolidation involves taking out a new loan to pay off existing debts, while debt settlement involves negotiating with creditors to reduce the total amount you owe, which can negatively impact your credit score.
Can I use a debt consolidation loan for all types of debt?
Debt consolidation loans are typically used for unsecured debts like credit cards, medical bills, and personal loans. They usually can't be used for secured debts like mortgages or auto loans.
What are the risks of debt consolidation loans?
If you don't get a lower interest rate, you might end up paying more in the long run. Some companies also charge high fees, and if you miss payments on your new loan, your credit score could suffer.
What happens if I can’t pay my debt consolidation loan?
If you fail to make payments, the lender may report missed payments to the credit bureaus, negatively affecting your credit score. You could also face collection actions, depending on the terms of your loan.
Relieve $25k+ in Credit Card Debt or Personal Loan Debt With TurboDebt
- Relieve $25k+ in credit card debt or personal loan debt with this special relief program.
- TurboDebt has a Trustpilot rating of 5/5 based on 1288 reviews
- Subject to qualification and approval. $1,500 monthly income required.
- Apply in 5 minutes. If you qualify, chat online with a friendly online debt representative.
The bottom line
Consolidating your unsecured debt into a single loan could help you gain control over your financial health. The key is to do your research: You want to find a debt consolidation company that offers a loan with the lowest interest rates and fees. If you do, you can simplify your life by swapping several credit card and personal loan payments with one monthly charge.
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Writer
Dan Rafter is a freelance writer who has more than 20 years experience covering personal finance. He's written for the Chicago Tribune, Washington Post, Bankrate, CreditCards.com, Rocket Mortgage, NortonLifeLock and several others.
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