Best Debt Consolidation Loans to Reducing High-Interest Debt
Joy Wallet is advertiser-supported: we may earn compensation from the products and offers mentioned in this article. However, any expressed opinions are our own and aren't influenced by compensation. To read our full disclosure, click here.
Use AmONE to Get a Personal Loan
- If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
- With personal loan interest rates rising, now could be a great time to find a personal loan. Through our partner AmONE, you could get matched to a lender who could offer as much as a $50k loan with rates as low as 5.99% APR.
- Approval and loan terms vary based on applicant qualifications. Not all applicants will qualify for the full amount or lowest available rates. It takes minutes to see your results. And don't worry- filling out the form won't hurt your credit score and is free, so why not give it a try?
The average American has about $8,674 in credit card debt, but a debt consolidation loan can help by cutting your interest rate nearly in half and lowering monthly payments. These loans combine high-interest debts, like credit cards, into one easier, lower-interest payment. If you have good credit, you can get the best rates—around 9.41% compared to the average 16% on most credit cards. Here's a list of some top personal loans for debt consolidation.
Millions struggle with debt. We help them move on with their lives.
- End your debt stress with a proven, affordable debt relief program. Our consultants will guide you through every step.
- Everyone’s financial situation is different. That’s why we start by giving you a free debt analysis and create a custom solution based on your unique needs and goals.
- Let us help you solve your debt problems and move forward with improving your overall financial health.
Not available in CO, HI, ND, OR, RI, VT, WA, WV, WY, MN, DE, IA.
In this article
Overview of the best debt consolidation loans
- Best for fair credit: Upstart
- Best for quick application: Best Egg
- Best for 0% origination fees: Discover
- Best for low rates: LightStream
- Best for good to excellent credit: Quicken Loans
- Best for unemployment protection: SoFi
- Best for secured loans: Avant
- Best for peer-to-peer lending: LendingClub
- Best for online application: Prosper
Compare the best debt consolidation loans
Lender | APR range | Loan amount | Loan term | Origination fee |
7.8% - 35.99% | $1,000- $50,000 | 3 & 5 years | Up to 12% | |
7.99% - 35.99% | $2,000 - $50,000 | 3-5 years | 0.99% - 9.99% | |
7.99% - 24.99% | $2,500 - $40,000 | 3-7 years | 0% | |
6.99% - 25.49% | $5,000 - $100,000 | 2-10 years | 0% | |
9.11% - 29.99% | $2,000 - $45,000 | 3-5 years | Up to 9% | |
8.99% - 29.49% | $5,000 - $100,000 | 2-7 years | 0% | |
9.95% - 35.99% | $2,000 - $35,000 | 1-5 years | Up to 9.99% | |
8.98%-
35.99% | $1,000 - $40,000 | 2 & 5 years | 3% - 8% | |
8.99% - 35.99% | $2,000 - $50,000 | 2 & 5 years | 1% - 9.99% |
Best for fair credit: Upstart
Pros & cons
Pros
- User-friendly platform.
- Fast funding.
- High approval odds due to the use of AI.
Cons
- Higher minimum loan amount in certain states.
- Origination fees.
- Does not allow a co-signer.
Loan amount: $1,000- $50,000
APR range: 7.8% - 35.99%
Upstart says its interest rates for personal loans are 40% lower than traditional models. The company uses artificial intelligence and machine learning to approve qualified borrowers and estimates it has approved 27% more borrowers than under a standard lending model.
It allows a minimum credit score of 600, considered fair credit, so you don’t have to have excellent credit to get loan offers from Upstart.
Upstart offers a range of loan amounts, from $1,000 to $50,000. If you’re borrowing at the lower end to consolidate your debts and expect to pay the loan off within a year or so, it may not be worthwhile to consolidate your loans.
Upstart charges up to 12% in origination fees, which can easily eat into any savings from switching to a lower-interest loan. You may be better off keeping the original loan and paying it off in a year or less if you can.
Visit Upstart
Or read Joywallet's review of Upstart.
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.
Best for quick application: Best Egg
Pros & cons
Pros
- Wide range of loan terms and repayment terms.
- No prepayment penalty.
- Offers a credit card at no fees.
Cons
- Charges an origination fee.
- Minimum credit score requirement is high.
- Does not allow a co-signer.
Loan amount: $2,000 - $50,000
APR range: 7.99% - 35.99%
Best Egg can be a good option if you’re looking to get a loan funded quickly with its easy application process. Filling out an online Best Egg personal loan application takes only a few minutes. Loan approval and funding can take one to three business days, though same-day financing is possible.
Its personal loans can be used for almost any purpose, including a debt consolidation loan and credit card consolidation. However, a balance transfer credit card with 0% interest can be a better solution. Like many other personal loan lenders, Best Egg doesn’t allow the money to be used for postsecondary educational expenses such as student loans, securities, or any illegal activity.
Best Egg doesn’t directly pay off creditors, which you’ll have to do alone. It doesn’t have prepayment penalties, so you can pay off the loan early.Applicants don’t have to have excellent credit.
Visit Best Egg
Or read Joywallet's review of Best Egg.
Best for 0% origination fees: Discover
Pros & cons
Pros
- Offers a complete banking experience.
- User-friendly mobile app.
- No origination fees.
- No monthly fees.
Cons
- Maximum loan amount limited to $40,000.
- Not suitable for those who want an in-person service.
Loan amount: $2,500 - $40,000
APR range: 7.99% - 24.99%
Discover doesn’t charge an origination fee or prepayment penalties, which can make it a more affordable loan than borrowers may find elsewhere.
Discover offers the option to pay loan funds directly to third-party creditors, which can save you time and make getting your personal finances into order a lot easier.With installment loan options of up to seven years, borrowers may qualify for a lower interest rate and reduce their monthly payment by extending the loan over a more extended period.
Personal loans from Discover can be used for many personal uses, including debt management. They can also be used for small business expenses, which isn’t typical among most online lenders.
Visit Discover
Or read Joywallet's review of Discover.
Best for low rates: LightStream
Pros & cons
Pros
- No fees.
- Low APR.
- Loans as high as $100,000.
- Longer repayment terms.
- Autopay discount.
Cons
- Requires a credit score of 660 or higher.
- Does not allow co-signers.
- Does not offer the option of prequalification.
Loan amount: $5,000 - $100,000
APR range: 6.99% - 25.49%
LightStream offers an autopay discount that can lower the interest rate on its fixed-rate loans from 6.99% to 25.49%. It has the lowest APR out of all the companies we reviewed. Without the autopay discount, interest rates at LightStream are 0.50% higher.
LightStream may not expect an excellent credit score from applicants. Still, it makes it clear on its website that a track record of financial responsibility and several years of good credit history with various account types is preferred to qualify for its lower interest rate loans.
It also looks for plenty of assets, manageable revolving credit card debt, stable and sufficient income, and a good payment history with few delinquencies or other problems repaying debts. LightStream requires loans to start at $5,000, which may be more money than you need to borrow. But it also has some of the highest loan amounts, at $100,000, which may be much more than you need to borrow.
Visit LightStream
Or read Joywallet's review of LightStream.
Use AmONE to Get a Personal Loan
- If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
- With personal loan interest rates rising, now could be a great time to find a personal loan. Through our partner AmONE, you could get matched to a lender who could offer as much as a $50k loan with rates as low as 5.99% APR.
- Approval and loan terms vary based on applicant qualifications. Not all applicants will qualify for the full amount or lowest available rates. It takes minutes to see your results. And don't worry- filling out the form won't hurt your credit score and is free, so why not give it a try?
Best for good to excellent credit: Quicken Loans
Pros & cons
Pros
- Quick, online application.
- Approval within minutes.
- No pre-payment penalties.
- Flexibility to use funds the way you like.
Cons
- Charges an origination fee.
- Charges a late payment fee.
- Maximum loan amount is $45,000.
- Can only choose from two loan repayment terms.
Loan amount: $2,000 - $45,000
APR range: 9.11% - 29.99%
Like LightStream, Quicken Loans has an autopay discount, though it offers a lower discount of 0.25%. The company changed its name to Rocket Mortgage in 2021.
It offers debt consolidation loans for amount ranging between $2,000 to $50,000. However, its APR starts from 9.11% and is ideal for those with a good credit. It is suitable for applicants with a credit score of 640 and above. The loan funds can be transferred as soon as the next business day and it has a quick, online application process.
When you apply for a debt consolidation loan with Quicken Loans, there will be a soft credit inquiry but it will not affect your score. It has an origination fee upto 9% but there is no prepayment penalty. The origination fee will be deducted from your loan amount and you will receive the balance. It also charges a late fee of $15. The only drawback of Quicken Loans is that the repayment options are limited to two-36 and 60 months only.
Visit Quicken Loans
Or read Joywallet's review of Quicken Loans.
Best for unemployment protection: SoFi
Pros & cons
Pros
- No fees.
- Instant prequalification.
- Online application.
- Same day funding.
- Autopay discount.
Cons
- High minimum loan amount
- High APR.
Loan amount: $5,000 - $100,000
APR range: 8.99% - 29.49%
The company says if you’re paying more than 20% interest on credit cards, SoFi personal loans could help you save thousands of dollars. SoFi and LightStream have the highest maximum loan amounts of companies we reviewed, offering up to $100,000.
Its annual percentage rate starts at 8.99% APR, which includes a 0.25% autopay discount. Also, payroll direct deposits of at least $1,000 per month to a SoFi Money account must be made to qualify for the discount. SoFi Money is a cash management account.
SoFi personal loans have no fees. Specifically, no origination fees, no late fees, and no prepayment penalties. It also offers unemployment protection. If you lose your job, SoFi will temporarily pause your payments and help you find a new job. Interest will continue accruing and be added to the principal balance at the end of each forbearance period for up to 12 months.
Visit SoFi
Or read Joywallet's review of SoFi.
Best for secured loans: Avant
Pros & cons
Pros
- Online application.
- Open for borrowers with fair credit.
- No prepayment fees.
Cons
- Maximum loan amount $35,000.
- Origination fees.
- High APR.
- High administrative fees.
- Late fees.
Loan amount: $2,000 - $35,000
APR range: 9.95% - 35.99%
Avant can offer you a secured loan, a type of personal loan backed by collateral you own, such as a car. Interest rates for secured loans can be cheaper than unsecured debt, making the monthly payment and the overall loan more affordable.
Its secured loans don’t require buying another piece of collateral, such as a home or car, but can be spent on anything, including debt settlement. Paying the loan back on time each month can raise your credit score. So you can use the loan to pay off your credit card debt, which lowers your credit utilization rate.
Avant has a range of repayment terms, from one to five years, making an Avant loan a good option. Its APR range, however, is on the high end for people with good to excellent credit.
Visit Avant
Or read Joywallet's review of Avant.
Best for peer-to-peer lending: Lending Club
Pros & cons
Pros
- Easy online application.
- Open for borrowers with fair credit.
- Allows co-signers.
Cons
- Maximum loan amount $40,000.
- High APR.
- Origination fees.
Loan amount: $1,000 - $40,000
APR range: 8.98% - 35.99%
Lending Club is a peer-to-peer lender that connects borrowers with investors who provide personal loans. Interest rates are generally lower than at a traditional bank, and qualifying might be easier if you have fair credit. Lending Club offers the option of paying your creditors directly, so you don’t have to deal with the hassle of debt consolidation.
It has some of the highest APRs among lenders we reviewed. Joint loans are available for you and a spouse who use the same credit cards and want to consolidate them on a new, cheaper loan with a cosigner. Borrowers typically receive loan funds within four days of loan approval. It can be extended if a lender requires more documentation or verification.
Visit Lending Club
Or read Joywallet's review of Lending Club.
Best for online application: Prosper
Pros & cons
Pros
- Quick rate check.
- Wide catalog of products.
- Funds are disbursed in one day.
Cons
- Maximum loan amount of $50,000.
- Requires a credit score of 600.
- Not available in every state.
Loan amount: $2,000 - $50,000
APR range: 8.99% - 35.99%
Prosper is another peer-to-peer lending platform connecting borrowers with investors. It offers unsecured loans that aren’t backed by collateral like your home but are based on creditworthiness.
Checking your loan rate on its website won’t affect your credit score and is done through a soft credit check. A hard inquiry will be made if you’re approved for a loan, and this credit check can affect your credit score for a while.
It uses TransUnion to get an applicant’s credit score and income, a debt-to-income ratio of 50% or better, no bankruptcies in the last year, less than five credit inquiries in the last six months, and three open credit lines. Prosper doesn’t charge a prepayment penalty for making partial prepayments.
Visit Prosper
Or read Joywallet's review of .
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 a debt consolidation loan work?
A debt consolidation loan works by combining multiple debts, like credit cards or personal loans, into one single loan with a lower interest rate. Instead of juggling multiple payments with different rates, you take out a new loan to pay off your existing debts. This simplifies your finances and can reduce the amount of interest you pay, potentially lowering your monthly payments. The goal is to make your debt more manageable and pay it off faster. However, the loan terms depend on your credit score, with better rates for those with good or excellent credit.
Why you should use a debt consolidation loan?
A debt consolidation loan can be a good way to cut in half the loan interest rate you pay on your credit cards and instead have one monthly payment that’s less than what you pay on multiple credit cards. Many lenders offer such loans, including to people with fair or poor credit, and provide installment loans with the same monthly payments that last two to seven years. You can not only save money with a debt consolidation loan through lower interest rates and set due dates each month, but you may be able to pay the debts off quicker than you would with credit card bills that seem like they can go on forever.
Know what your credit score is before you apply for a personal loan. The lower your credit score, the more likely you are to be charged a higher interest rate over the life of the loan. Also, check if an origination fee is charged, which lenders charge for their work and can run as high as 12% of the loan value. Most personal loans don’t have prepayment penalties but ask the lender to ensure you won’t be charged if you pay the loan off early.
Your Online Loan Marketplace
- 100% free of fees
- $0 origination fees
- $0 to check your rates
- $0 prepayment penalties
- One simple form
FAQs
Will it help me stick to a repayment plan?
It should. An installment loan through a personal loan has a set repayment plan that requires a specific payment each month. The loans are due in two to seven years, with the same payment amounts due each month. On the other hand, credit cards are revolving credit that doesn’t have a set repayment plan. You can use the card and pay the minimum amount due each month, and you could be in debt forever.
When is a debt consolidation loan a good idea?
Debt consolidation loans are based mainly on your creditworthiness. If your credit report shows a good credit score of 670 or higher, you’ll likely qualify for a loan with an interest rate that’s at least 50% lower than the annual percentage rate you pay on your credit cards. Consolidating high-interest debt can save you a lot of money if you pay off the debt entirely with a new loan and then pay that loan off as quickly as possible.
When should I not get a personal loan?
If you don’t think you can stick to a budget or can’t afford the monthly loan payments, you may not want to get a personal loan. Having fair or bad credit is another reason to avoid a personal loan because the lender will likely charge you the highest interest rate. Lastly, if you have a credit card balance that you think you can pay off within the next 12 months, then the savings from a debt consolidation loan won’t be worth it.
The bottom line
Being in credit card debt is no fun. It’s especially no fun if it’s not useful debt, such as a loan for a car or home. Debt consolidation loans won’t help refresh your memory, but they can make paying off credit card debt cheaper and more manageable while improving your financial situation. Shop for the best interest rates and make sure the total cost of the new loan is a lot less than paying off the existing debt.
- Complete Our Questionnaire
- Compare Solutions
- Cash Out Refinance
- Home Equity Loans
- Home Equity Line of Credit
- Personal Loans
- Home Equity Alternative Solutions
- Connect with Providers
Joy Wallet is an independent publisher and comparison service, not an investment advisor, financial advisor, loan broker, insurance producer, or insurance broker. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Joy Wallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Featured estimates are based on past market performance, and past performance is not a guarantee of future performance.
Our site doesn’t feature every company or financial product available on the market. We are compensated by our partners, which may influence which products we review and write about (and where those products appear on our site), but it in no way affects our recommendations or advice. Our editorials are grounded on independent research. Our partners cannot pay us to guarantee favorable reviews of their products or services.
We value your privacy. We work with trusted partners to provide relevant advertising based on information about your use of Joy Wallet’s and third-party websites and applications. This includes, but is not limited to, sharing information about your web browsing activities with Meta (Facebook) and Google. All of the web browsing information that is shared is anonymized. To learn more, click on our Privacy Policy link.
Images appearing across JoyWallet are courtesy of shutterstock.com.
Writer
Aaron Crowe is a freelance journalist who specializes in personal finance writing and editing. He has worked at newspapers, where he won a Pulitzer Prize, and has written for numerous online publications. These include AOL, US News & World Report, WiseBread, Bankrate, AARP, and many websites focusing on housing, credit and insurance. He lives in California with his wife and daughter.
Share this article
