Skip to Main Content

Best debt consolidation loans in December 2023

Dec 06, 2023

Bankrate logo The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for . Learn more about who we are and our promise to guide you through life’s financial journey.

|

Check Your Personal Loan Rates

CheckmarkCheck personalized rates from multiple lenders in just 2 minutes
CheckmarkExplore loans ranging from $500 to $100,000
CheckmarkThis will NOT impact your credit score

Filter results

Close X

PERSONAL LOANS

Best for high-dollar loans and longer repayment terms

4.7

Bankrate Score
Est. APR
7.99- 25.49%
* with AutoPay
Loan amount
$5k- $100K
Term: 2-7 yrs*
Min credit score
695
See offersArrow Right

Apply on partner site

PERSONAL LOANS

Best for consumers with little credit history

4.7

Bankrate Score
Est. APR
6.40- 35.99%
Loan amount
$1k- $50K
Term: 3-5 yrs
Min credit score
Not disclosed
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for quick approval

4.6

Bankrate Score
Est. APR
7.99- 29.99%
Loan amount
$5k- $50K
Term: 2-5 yrs
Min credit score
620
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

BEST FOR MULTIPLE DISCOUNTS

4.6

Bankrate Score
Est. APR
10.49- 19.49%
Loan amount
$2k- $30K
Term: 1-5 yrs
Min credit score
720

PERSONAL LOANS

Best for using a co-borrower

4.1

Bankrate Score
Est. APR
9.57- 35.99%
Loan amount
$1k- $40K
Term: 2-5 yrs
Min credit score
600
See offersArrow Right

Check with Bankrate

PERSONAL LOANS

Best for consolidating credit card debt

4.6

Bankrate Score
Est. APR
11.72- 24.81%
Loan amount
$5k- $40K
Term: 2-5 yrs
Min credit score
Not disclosed
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for people with bad credit

4.5

Bankrate Score
Est. APR
9.95- 35.99%
Loan amount
$2k- $35K
Term: 1-5 yrs
Min credit score
550
Read our reviewArrow Right

on Bankrate

PERSONAL LOANS

Best for fast funding

4.7

Bankrate Score
Est. APR
8.49- 35.99%
with AutoPay
Loan amount
$1k- $50K
Term: 2-7 yrs
Min credit score
600
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for high-income earners with good credit

4.7

Bankrate Score
Est. APR
8.99- 35.99%
Loan amount
$2k- $50K
Term: 3-5 yrs
Min credit score
600
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

BEST FOR GOOD CREDIT AND NEXT-DAY FUNDING

4.8

Bankrate Score
Est. APR
7.99- 24.99%
Loan amount
$2.5k- $40K
Term: 3-7 yrs
Min credit score
Not disclosed
Read our reviewArrow Right

On Bankrate

In the last two years, we helped fund over $744 million in loans. Let’s fund yours next.

How to compare debt consolidation loan lenders

There are many factors to consider before choosing an individual lender. Here are some key things to keep in mind when comparing lenders.

  • Approval requirements. Lenders consider your credit score, income and debt-to-income ratio when assessing loan applications. If you have bad credit, look into lenders with more flexible approval criteria.
  • Interest rates. Different lenders advertise different annual percentage rates. The lowest advertised rate is never guaranteed and your actual rate depends on your credit. Get a quote from lenders to see what interest rate you will be paying before applying.
  • Fees. While some lenders do not charge any additional fees, be on the lookout for late fees, origination fees and prepayment penalties. Factor these in when calculating your monthly payment.
  • Loan amounts. Make sure you know how much you need to borrow before choosing a lender, as each lender has its own loan amount range.
  • Repayment options. Lenders typically offer several repayment term options. If you are taking out a larger loan, finding a lender that offers a long repayment period could help you decrease your monthly payment.

Outside of these factors it is also important to consider customer service, unique features offered and potential fees.

Compare debt consolidation loan lenders from Bankrate’s top picks

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN. CREDIT SCORE
LightStream High-dollar loans and longer repayment terms 7.99%-25.49% with Autopay $5,000-$100,000 2-7 years 695
Upstart Consumers with little credit history 6.40%-35.99% $1,000-$50,000 3 or 5 years No requirement
Achieve Quick approval 7.99%-29.99% $5,000-$50,000 2-5 years 620
LendingClub Using a co-borrower 9.57%-35.99% $1,000-$40,000 2-5 years 600
Happy Money Consolidating credit card debt 11.72%-24.67% $5,000-$40,000 2-5 years 640
Avant People with bad credit 9.95%-35.99% $2,000-$35,000 1-5 years 550
Citi Multiple discounts 10.49%-19.49% $2,000-$30,000 1-5 years 720
Best Egg High-income earners with good credit 8.99%-35.99% $2,000-$50,000 3-5 years 600
Upgrade Fast funding 8.49%-35.99% $1,000-$50,000 2-7 years 600
Discover Good to excellent credit 7.99%-24.99% $2,500-$40,000 3-7 years 660

How we made our picks for the best debt consolidation loan lenders

To select the best personal loans for personal loans, Bankrate’s team of experts evaluated over 30 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories:

  • Checkmark
    Affordability
    The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score. We also give bonus points to lenders offering rate discounts, grace periods and that allow borrowers to change their due date. 
  • Checkmark
    Availability
    Minimum loan amounts, number of repayment terms, eligibility requirements, ability to apply using a co-borrower or co-signer and loan turnaround time are considered in this category.
  • Checkmark
    Customer experience
    This category covers customer service hours, if online applications are available, online account access and mobile apps.
  • Checkmark
    Transparency
    For this factor, we consider how well information is presented to the borrower on the lender’s website. This includes listing credit requirements, rates and fees, in addition to offering prequalification.
Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
20
loan features weighed
Rates
665
data points collected

What to know about debt consolidation

What is debt consolidation?

Debt consolidation is a process where multiple high-interest debts — like credit cards and loans — are rolled into a single payment. While there are multiple ways to consolidate your debt, borrowing a debt consolidation loan from a lender, bank or credit union is one of the most common methods.  

How does debt consolidation work?

Debt consolidation simplifies your repayment structure and can make it easier to keep track of your remaining debt. It may also help you pay it off faster. 

There are several ways to consolidate debt, but the general process entails taking out a new debt — in this case, a personal loan — to pay off multiple debts and streamline the repayment process. Borrowing a home equity loan or taking out a balance transfer credit card are also methods of debt consolidation.  

However, a debt consolidation loan is one of the most common and easiest ways to consolidate debt. If debt consolidation isn't an option, working with a credit counseling agency to establish a debt management plan may be a better way of dealing with your debt. 

Reasons to consolidate your debt

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 a debt consolidation loan can be helpful for many people, it won't solve your financial problems on its own. To reap the full benefits and avoid further issues, you’ll need to avoid making late payments and keep balances low on your recently paid off credit card accounts.

Caret Down

Credit card rates are variable and your monthly payments differ depending on your balance, so it can be hard to know when your debts will be paid off. Debt consolidation puts all of your payments in one place so you can keep track of it easier. 

 If you have several credit cards with double-digit interest rates and you qualify for a debt consolidation loan at a lower rate, you can potentially save thousands in interest and fees.

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 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.

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.

Pros and cons of debt consolidation loans

Before signing on the dotted line, it's important to be aware of the potential benefits and drawbacks that come with a debt consolidation loan. Here's what you need to know.

Green circle with a checkmark inside

Pros

  • Faster debt repayment: A fixed term can result in paying your debt off faster.
  • Simplified payments: Your debt becomes one simple fixed payment.
  • Lower rates: Borrowers with above-average credit can qualify for lower interest rates and save money in interest over the life of the loan.
  • Fixed repayment schedule: A loan involves fixed payments, so you know exactly how long it will take to pay off your debt.
  • Improve credit health: Consolidating your debts into one payment can help you grow your credit faster through simplifying the repayment process.
Red circle with an X inside

Cons

  • Doesn't solve the problem on its own: Overspending can cause you to end up back where you were if you don't make a budget and stick to it.
  • Potential fees: Many loans come with fees, like prepayment and origination fees that can eat into the overall value of your loan.
  • You may pay more: The interest rate you get for a loan may not be lower than some of your existing debts.
  • Missing payments can hurt your credit: As with any credit product, missing payments can set your score back.

Calculate what you could save by consolidating

To use the debt consolidation calculator, enter your outstanding debts and current interest rates. After receiving your estimated terms and monthly payment structure, adjust the details to find the most ideal consolidation loan for your budget.

The impacts of the Federal Reserve

Consolidating debt can save you money in the long run, but only if you can score a lower interest rate. Right now, it may be more difficult to score a lower rate due to both the overall economic environment and the Fed's actions over the past few years.

Bankrate's image file
LEARN MORE ABOUT

How the Federal Reserve impacts personal loans

Arrow Right

Alternatives to a debt consolidation loan

The best way to consolidate debt depends on your specific financial situation. Personal loans are a common method of debt consolidation, but there are other options such as a balance transfer credit card or a home equity loan. To decide what method of debt consolidation will work best for you, compare the interest rates and overall cost of each option and consider talking to a credit counselor.

Is a personal loan better than a balance transfer credit card for debt consolidation?

The right option to consolidate debt depends on your unique situation. In the case of using a balance transfer credit card or a personal loan to consolidate debt, there are different items to consider.

Lightbulb

Expert take

"The interest rate on a personal loan may be lower than on a balance transfer credit card. However, balance transfer credit cards may offer a teaser rate, even a 0% interest rate, that is good for a few months. When the introductory interest rate expires, you have to pay a much higher interest rate. Balance transfer credit cards may offer more flexible payments, so long as you pay at least the minimum payment, which may be higher than on a personal loan. But, check whether the personal loan allows prepayment without penalty."
- Mark Kantrowitz, Nationally recognized student financial aid expert

FAQs about debt consolidation loans

Written by: Hanneh Bareham, Writer, Personal Loans and Debt Relief for Bankrate

Hanneh Bareham has been a personal finance writer with Bankrate since 2020. She started out as a credit cards reporter before transitioning into the role of student loans reporter. She is now a writer on the loans team, further widening her scope across multiple forms of consumer lending.

Read more from Hanneh Bareham

Edited by: Rhys Subitch, Editor, Personal Loans, Auto Loans, and Debt

Rhys Subitch is a Bankrate editor who leads an editorial team dedicated to developing educational content about loans products for every part of life. Their experience spans student loans, auto loans and personal loans, and they have developed a passion for helping readers take control of their finances.

Read more from Rhys Subitch