Skip to Main Content

Best debt consolidation loans in August 2022

As of August 13, 2022
Bankrate logo Why you can trust Bankrate
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editoral integritythis post may contain references to products from our partners. Here's an explanation for how we make money.
Bankrate analyzes the best personal loans for debt consolidation and what borrowers should look for before signing a loan agreement. The lenders listed here were evaluated based on interest rates, terms and features. We also go over the benefits and drawbacks of debt consolidation, as well as available alternatives. 

Debt consolidation loans can help borrowers combine high-interest debt into a new loan, hopefully with a lower interest rate. When choosing a debt consolidation loan, consider factors like interest rates, terms and fees.

Debt consolidation loans typically have interest rates from 6 percent to 36 percent. The actual rate you will qualify for depends on your credit history, annual income and debt-to-income ratio. 
 
|
Filters

Check Your Personal Loan Rates

Answer a few questions in two minutes or less to see which personal loans you pre-qualify for. It's free and will not impact your credit score.

4.6

Bankrate Score
APR from

5.73%*

with AutoPay
Loan Amount

$5k- $100k*

Term: 2-7 yr*
Min. Credit

Not disclosed

Apply on partner site

4.8

Bankrate Score
APR from

6.95- 35.97%

with AutoPay
Loan Amount

$1k- $50k

Term: 2-7 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.7

Bankrate Score
APR from

7.99%

3 or 5 year term
Loan Amount

$2k- $50k

Term: 3-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.6

Bankrate Score
APR from

7.99- 22.73%

with AutoPay
Loan Amount

$5k- $100k

Term: 2-7 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.6

Bankrate Score
APR from

5.99%

Loan Amount

$5k- $40k

Term: 2-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.5

Bankrate Score
APR from

6.34- 35.89%

Loan Amount

$1k- $40k

Term: 3-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.8

Bankrate Score
APR from

6.99- 24.99%

Loan Amount

$3.5k- $40k

Term: 3-6 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.6

Bankrate Score
APR from

7.95- 35.99%

Loan Amount

$2k- $40k

Term: 3-5 yr
Min. Credit

560

Check rate with Bankrate

4.4

Bankrate Score
APR from

7.99- 35.99%

Loan Amount

$2k- $37k

Term: 2-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.5

Bankrate Score
APR from

9.95- 35.99%

Loan Amount

$2k- $35k

Term: 2-5 yr
Min. Credit

550

Check rate with Bankrate

3.9

Bankrate Score
APR from

18.00- 35.99%

Loan Amount

$1.5k- $20k

Term: 2-5 yr
Min. Credit

None

Check rate with Bankrate
APR from

7.99- 35.99%

Loan Amount

$1k- $35k

Term: 1-3 yr
Min. Credit

None

Check rate with Bankrate

The Bankrate guide to choosing the best debt consolidation loan

Why trust Bankrate?

Bankrate has been comparing and surveying lenders and financial products for over 40 years. Hundreds of top news organizations rely on Bankrate as a trusted source of information. Bankrate strives to help you make smart, informed decisions about your finances. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is fact-checked to ensure accuracy.

A debt consolidation loan can help you manage your debts more effectively, but only if you find a loan that works for your situation. When shopping for the best debt consolidation loan, look for the lowest interest rate, a loan amount that meets your needs, an affordable and workable repayment term and low to no fees. Loan details presented here are current as of July 28, 2022. Check the lenders’ websites for the latest information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability.

What is debt consolidation?

Debt consolidation is a process where multiple debts, often from things like credit cards, are rolled into a single payment. This can make it easier to pay off debt faster and keep track of how much debt you have. One of the most common ways to consolidate debt is through a debt consolidation loan.

How does debt consolidation work?

There are several ways to consolidate debt, but the general process is paying off current debts using new debt. This can be done by taking out a personal loan or home equity loan, by transferring your balance to a new credit card or by working with a credit counseling agency to establish a debt management plan.

In these situations, you use the new funds to pay off your current debt. You are then left with one payment on the new loan on balance transfer card instead of needing to keep track of multiple payments. Debt consolidation can also save money if you can find a loan with lower interest rates and fees than you had with your previous debts.

A debt consolidation loan is one of the most common and easiest ways to consolidate debt. You apply to borrow the amount that you owe on your existing debts. Once approved for the loan, you receive the funds and use them to pay off your credit cards or other loans. In some cases, the funds can be sent directly to your creditors. From there, you begin making monthly payments on your new debt consolidation loan. These loans are unsecured, which means you do not need to put up collateral. Personal loans also come with fixed interest rates and monthly payments.

How do I choose the best debt consolidation loan lender?

It's important to get a debt consolidation loan that fits your budget and helps you reach your goal of eliminating debt. Many lenders will prequalify you without making a hard inquiry into your credit. Prequalification gives you a good idea of the rate, loan amount and loan term that you could qualify for.
 
You can then use those to compare options and decide which is best for you based on the following factors:
  • Annual percentage rates. Your APR is determined by your credit score and other financial factors. This is the amount charged on top of your principal amount every month.
  • Loan cost. When you shop, compare the total cost of each loan, including origination fees and other charges. A large number of fees can outweigh the benefits of a low APR.
  • Lender features. Potentially helpful features to search for are things like the new lender making direct payments to your previous creditors, credit monitoring, hardship programs and other customer service programs.

Compare debt consolidation loan lenders in August 2022

LENDER EST. APR LOAN TERM LOAN AMOUNT BEST FOR MIN. CREDIT SCORE
Best Egg 7.99%–35.99% 3–5 years $2,000–$50,000 High-income earners with good credit 640
Payoff 5.99%–24.99% 2–5 years $5,000–$40,000 Consolidating credit card debt 600
LightStream 5.73%–19.99% (with autopay) 2–7 years $5,000–$100,000 High-dollar loans and longer repayment terms Not specified
PenFed 6.74%–17.99% 1–5 years $600–$50,000 Smaller loans with a credit union Not specified
OneMain Financial 18.00%–35.99% 2–5 years $1,500–$20,000 Fair to poor credit Not specified
Discover 5.99%–24.99% 3–7 years $2,500–$35,000 Good credit and next-day funding 660
Upstart 5.40%–35.99% 3 years or 5 years $1,000–$50,000 Consumers with little credit history Not Specified
Marcus by Goldman Sachs 6.99%–19.99% (with autopay) 3–6 years $3,500–$40,000 Consolidating large debts 660

Best for high-income earners with good credit

Min. credit score:
Not disclosed
Fixed APR From:
7.99%
Loan amount:
$2,000–$50,000
Term lengths:
3 to 5 years
Min. annual income:
$0
Overview: Best Egg offers unsecured personal loans for a variety of purposes, including debt consolidation. If you have a credit score of at least 640, you may qualify based on other criteria, such as income. Best Egg's debt consolidation loans range from $2,000 to $50,000.
Why Best Egg is best for high-income earners with good credit: The best rates and terms go to borrowers who earn $100,000 or more and have a credit score of at least 700, which is “good” on the FICO scale.

Best for consolidating credit card debt

Min. credit score:
Not disclosed
Fixed APR From:
5.99%
Loan amount:
$5,000–$40,000
Term lengths:
2 to 5 years
Min. annual income:
$30,000

Overview: Payoff is specifically designed for borrowers who want to pay off their credit card debt. The application and approval process are done online.

 

Why Payoff is the best for consolidating credit card debt: Payoff's personal loans can be used only to consolidate credit card debt, and you can do so without unnecessary fees.

Best for high-dollar loans and longer repayment terms

Min. credit score:
Not disclosed
Fixed APR From:
5.73%
Loan amount:
$5,000–$100,000
Term lengths:
2 to 7 years
Min. annual income:
$50,000

Overview: LightStream offers personal loans for a variety of purposes, including debt consolidation. It stands out for offering loans up to $100,000 and terms of up to 84 months — larger loans and longer terms than what other lenders offer. You must have excellent credit and sufficient assets and income to qualify for a jumbo-size personal loan.

Why LightStream is the best for high-dollar loans and longer repayment terms: LightStream offers unsecured, fixed-rate debt consolidation loans as big as $100,000, with up to seven years to repay.

Best for smaller loans with a credit union

Min. credit score:
Not disclosed
Fixed APR From:
6.74% –17.99%
Loan amount:
$500–$50,000
Term lengths:
1 to 5 years
Min. annual income:
$0

Overview: Pentagon Federal Credit Union, known as PenFed, offers unsecured, fixed-rate personal loans for debt consolidation. While you'll need to become a member of the credit union in order to receive loan funds, you can do so by opening a savings account with a $5 initial deposit.

Why PenFed is the best for smaller loans with a credit union: You can borrow as little as $600 through PenFed, and credit unions often offer more personalized service than larger banks.

Best for fair to poor credit

Min. credit score:
None
Fixed APR From:
18% –35.99%
Loan amount:
$1,500–$20,000
Term lengths:
2 to 5 years
Min. annual income:
$7,200

Overview: OneMain Financial is a bank based out of Indiana. Its loan amounts are smaller and rates are higher than typical debt consolidation personal loans, but the lender is still a good alternative to the high interest rates and hidden fees that can come with payday loans. Your credit history, income and debt load determine whether you qualify.

Why OneMain Financial is the best for fair to poor credit: OneMain's fixed-rate loans charge high rates, but borrowers with bad credit will find more favorable rates with the company than with risky payday lenders, which can charge as much as 400 percent interest.

Best for good credit and next-day funding

Min. credit score:
660
Fixed APR From:
5.99% –24.99%
Loan amount:
$2,500–$35,000
Term lengths:
3 to 7 years
Min. annual income:
$25,000

Overview: Discover offers unsecured personal loans for debt consolidation, with the option to pay creditors directly.
You cannot apply for a debt consolidation loan from Discover within our site. Read our Discover personal loans lender review for more details about this lender's terms.

Why Discover is the best for good credit and next-day funding: The average Discover borrower has very good credit, and it’s possible to get an approval decision the same day you apply and get your money the next business day, provided your application is accurate and complete.

Best for consumers with little credit history

Min. credit score:
Not disclosed
Fixed APR From:
5.4% –35.99%
Loan amount:
$1,000–$50,000
Term lengths:
3 to 5 years
Min. annual income:
$12,000

Overview: Upstart offers unsecured personal loans for debt consolidation to consumers who have little credit history but a regular income.
You cannot apply for a debt consolidation loan from Upstart within our site. Read our Upstart personal loans lender review for more details about this lender's terms.

Why Upstart is best for consumers with little credit history: Upstart has flexible credit requirements which is great for borrowers who are just starting out.

Best for consolidating large debts

Min. credit score:
Not disclosed
Fixed APR From:
6.99% –24.99%
Loan amount:
$3,500–$40,000
Term lengths:
3 to 6 years
Min. annual income:
$35,000

Overview: Marcus by Goldman Sachs offers unsecured personal loans for debt consolidation to consumers who don’t have much credit history.

 

Why Marcus by Goldman Sachs is the best for consolidating large debts: The $40,000 loan limit can accommodate borrowers with a lot of debt to consolidate, and they can choose to have Marcus pay their creditors directly.

Why consolidate your debt?

Debt consolidation may have advantages, including:
 
  • Potentially lower interest rates: If you have several credit cards with double-digit interest rates and you qualify for a debt consolidation personal loan at a lower rate, you can potentially save a lot of money in interest and fees.
  • Sooner debt payoff: Combining all the debt into one bucket can make it easier to pay the debt off sooner, because you don’t have to balance separate payments.
  • Simplified finances: Credit card rates are variable, so your monthly payments differ depending on your balance, and it can be hard to know when your debts will be paid off. Debt consolidation puts everything into one place so you can keep track of it easier.
  • Set repayment schedule: A debt consolidation loan combines multiple debts into one monthly payment with a fixed rate and a set repayment term, so your monthly payments stay the same. You don’t have to worry about multiple due dates or varying payment amounts.
  • Credit score improvement: Credit scoring models, like FICO and VantageScore, place a lot of weight on your credit utilization ratio. When a new consolidation loan lowers your credit utilization ratio, your credit score might climb as a result.
Generally, a debt consolidation loan is a good idea if you can pay off the new debt, you have a high credit score to get good rates and you like the stability of a fixed monthly payment. 
 
Although debt consolidation can be helpful for many people, it cannot solve all your financial problems on its own. You’ll need to avoid making late payments or running up balances again on your recently paid-off credit card accounts. Otherwise, you could put your credit in a worse position. It's also not a good idea if you get offered higher interest rates through consolidation — otherwise, you'll pay more on your debt overall.

Alternatives to a debt consolidation loan

Debt consolidation loans can be useful, but they’re not right for everyone. If you’re looking for alternatives to debt consolidation loans, below are some additional options you may want to consider.

Home Equity

One popular way people pay off debt is to use the equity in their homes. Home equity loans and home equity lines of credit (HELOCs) let borrowers use their homes as collateral in exchange for financing. Just be sure to factor in the risks if you’re considering this option. The lender can seize your home if you can't make the payments.

Who this is best for: Borrowers who have built up equity in their homes.

Home equity loan vs. debt consolidation loan: Home equity loans and HELOCs may offer lower rates than debt consolidation loans, though they come with more risks, since your home is used as collateral.

Debt relief services

Debt relief services, commonly referred to as debt settlement companies, offer another way to deal with your debt if you can’t qualify for a consolidation loan. These companies reach out to creditors and debt collectors on your behalf and try to settle the debt for a lesser amount. If you decide to pursue debt relief services (perhaps as an alternative to bankruptcy), be aware that the fees these companies charge can be steep. Take your time to fully research fees, reviews and other details before applying. It’s also wise to compare multiple debt relief companies before you commit.

Who this is best for: Borrowers who are experiencing financial hardship and cannot pay their debt.

Debt relief services vs. debt consolidation loan: Unlike debt consolidation loans, debt relief services aim to eliminate some of your debt without your having to pay it. With that said, pursuing debt relief is a risky move, and it can damage your credit score.

Credit counseling

Another option that can help you get debt under control is credit counseling. Credit counseling companies are often (though not always) nonprofit organizations. In addition to debt counseling, these companies may offer a service known as a debt management plan, or DMP.

With a DMP, you make a single payment to a credit counseling company, which then divides that payment among your creditors. The company negotiates lower interest rates and fees on your behalf to lower your monthly debt obligation and help you pay the debts off faster.

DMPs are rarely free, though, even if they’re done by a nonprofit credit counseling service. You may have to pay a setup fee of $30 to $50, plus a monthly fee (often $20 to $75) to the credit counseling company for managing your DMP over a three- to five-year term.

Who this is best for: Borrowers who need help structuring their debt payments.

Credit counseling vs. debt consolidation loan: With a debt consolidation loan, you're in control of your payoff plan, and you can often apply with few fees. With credit counseling, a third party manages your payments while charging setup fees.

Balance transfer credit card

With a balance transfer card, you shift your credit card debt to a new credit card with a 0 percent introductory rate. The goal with a balance transfer card is to pay off the balance before the introductory rate expires so that you save money on interest. When you calculate potential savings, make sure you factor in balance transfer fees.

Keep in mind that paying off existing credit card debt with a balance transfer to another credit card isn't likely to lower your credit utilization ratio like a debt consolidation loan would.

A debt consolidation loan also is going to offer higher borrowing limits, enabling you to pay off more debt, as well as fixed monthly payments, which make it easier to budget and stay disciplined with paying off debt.

Who this is best for: Borrowers who can pay off existing debt quickly.

Balance transfer credit card vs. debt consolidation loan: Often, balance transfer cards are the best choice for borrowers who have the means to pay off their debt within 18 months, which is a standard 0 percent APR period. If you need longer to pay off your debt, or if you have a lot of debt, a debt consolidation loan is a better choice.

FAQs about debt consolidation loans

Methodology

To select the top debt consolidation loan lenders, Bankrate reviewed 33 lenders across the personal loan space. Several factors related to consolidation were considered, including a variety of credit profiles accepted, loan amounts, terms and whether the lenders had specialized consolidation loan products or services.
 
Bankrate star ratings rely on 15 data points broken into three categories: availability, affordability and customer experience. Availability covers how fast you can get a loan, how much you can borrow and the income and credit requirements. Affordability includes fees, the range of interest rates offered and penalties. Lastly, customer experience is an evaluation of online applications, online account access, customer service hours and apps.
 
Among the top features evaluated for debt consolidation loans were the availability of online applications, flexible repayment options and customer discounts.