Best for high-income earners with good credit

Best Egg
- Min. credit score:
- 600
- Fixed APR From:
- 8.99% –35.99%
- Loan amount:
- $2,000– $50,000
- Term lengths:
- 3 to 5 years
- Min. annual income:
- Not disclosed
Bankrate’s top picks for debt consolidation loans considers interest rates, terms and features offered by each lender. We also go over the benefits and drawbacks of debt consolidation, as well as available alternatives.
Debt consolidation loans allow borrowers to combine high-interest debt into a new loan, hopefully with a lower interest rate. When choosing a debt consolidation loan, there are several factors to consider.
Debt consolidation loans typically have interest rates from 6 percent to 36 percent. The actual rate you qualify for depends on your credit history, annual income and debt-to-income ratio. When applying for a debt consolidation loan, it is important that you find a lower rate than what you are currently paying.
APR from 9.99- 25.99%* with Autopay | Loan Amount $5k–$100K* Term: 2-7 yr* | Min. Credit Not disclosed | Apply on partner site | ||
APR from 8.24- 35.97% with AutoPay | Loan Amount $1k–$50K Term: 2-7 yr | Min. Credit 560 | Check rate with Bankrate | ||
APR from 8.99- 35.99% | Loan Amount $2k–$50K Term: 3-5 yr | Min. Credit 600 | Check rate with Bankrate | ||
APR from 7.99- 35.99% | Loan Amount $5k–$50K Term: 2-5 yr | Min. Credit 620 | Check rate with Bankrate | ||
APR from 10.50- 29.99% | Loan Amount $5k–$40K Term: 2-5 yr | Min. Credit 640 | Check rate with Bankrate | ||
APR from 8.05- 36.00% | Loan Amount $1k–$40K Term: 2-5 yr | Min. Credit Not disclosed | Check rate with Bankrate | ||
APR from 18.00- 35.99% | Loan Amount $1.5k–$20K Term: 2-5 yr | Min. Credit Not disclosed | Check rate with Bankrate | ||
APR from 9.95- 35.95% | Loan Amount $2k–$35K Term: 1-5 yr | Min. Credit Not disclosed | Check rate with Bankrate | ||
| Check rate with Bankrate |
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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 Feb. 17, 2023. 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.
LENDER | EST. APR | LOAN TERM | LOAN AMOUNT | BEST FOR | MIN. CREDIT SCORE |
---|---|---|---|---|---|
Best Egg | 8.99%-35.99% | 3-5 years | $2,000-$50,000 | High-income earners with good credit | 600 |
Happy Money | 10.50%-29.99% | 2-5 years | $5,000-$40,000 | Consolidating credit card debt | 640 |
LightStream | 9.99%-25.99%* (with AutoPay) | 2-7 years | $5,000-$100,000 | High-dollar loans and longer repayment terms | Not specified |
PenFed | 7.74%-17.99% | Up to 5 years | $600-$50,000 | Smaller loans with a credit union | 700 |
OneMain Financial | 18.00%-35.99% | 2-5 years | $1,500-$20,000 | Fair to poor credit | Not specified |
Discover | 6.99%-24.99% | 3-7 years | $2,500-$35,000 | Good to excellent credit | 660 |
Upstart | 6.70%-35.99% | 3 or 5 years | $1,000-$50,000 | Consumers with little credit history | No minimum |
Overview: Happy Money is specifically designed for borrowers who want to pay off their credit card debt. The application and approval process are completed online, and borrowers can get free monthly FICO updates.
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.
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.
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.
Overview: Discover offers unsecured personal loans for debt consolidation, with the option to pay creditors directly. Plus, its minimum APR for the most creditworthy applicants is lower than most lenders, coming in at 6.99 percent.
Overview: Upstart offers unsecured personal loans for borrowers with a less-than-perfect credit score or a thin history with its unique underwriting criteria. Instead of just basing approval on credit, the lender also looks at factors like schooling and employment history.
Debt consolidation is a process where multiple high-interest debts — like credit cards — are rolled into a single payment. Debt consolidation simplifies your repayment structure and can make it easier to keep track of your remaining debt and may help you pay it off faster.
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.
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. With fixed interest rates and monthly payments, it's possible to save money over the life of your loan by securing a lower rate than what you had on your previous debts.
Applying for a debt consolidation loan is like applying for any other lending product, but you'll want to pay special attention to each lender's interest rates. Debt consolidation only makes sense if you can secure a lower rate than that of your previous debts.
Start by prequalifying with lenders, banks and credit unions to check your predicted rates and eligibility odds without impacting your credit. Look through the eligibility requirements of each lender and sift through the predicted rates, terms and fees to find the best loan for your situation.
Once you've narrowed down your search, look into each loan's benefits and potential drawbacks. Look for perks like autopay discounts or member benefits that will add to the value of your loan, and be on the lookout for value detractors, like origination fees. From there, you can find the best loan for your credit situation and apply online, or depending on the lender, you may be able to complete the process in person at a brick-and-mortar location.
Debt consolidation loans are offered through online lenders, banks and credit unions. While most applications can take place completely online, there are some in-person lenders that may require you to go to a physical location for the application process.
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.
Simplified payments: Debt consolidation turns multiple payments into one fixed monthly payment. Only having to make one payment a month — as opposed to four or five — can help encourage healthy repayment habits.
Lower rates: Borrowers with above-average credit can qualify for lower interest rates and save money in interest over the life of the loan.
Improve credit health: Consolidating your debts into one payment can help you grow your credit faster through simplifying the repayment process.
Potential fees: Many loans come with fees, like prepayment and origination fees that can eat into the overall value of your loan.
Doesn't pay down debt: While consolidation can help make your debt more manageable, it doesn't actually pay it down, and you'll still have to make the monthly payments.
Doesn't solve overspending: If you run up revolving accounts, like credit cards, or continue to live outside your means a debt consolidation loan may only offer temporary relief.
It's important to find a debt consolidation loan that fits your budget and helps you reach your goal of eliminating debt. Many lenders offer prequalification, which gives you a prediction of the rate, loan amount and loan term that you could qualify for without making a hard credit inquiry.
You can then use the offers to compare options and decide which is best for you based on several factors.
Debt consolidation has many potential benefits.
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.
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.
Who this is not good for: Those unsure of their ability to maintain the monthly payments.
Home equity loan versus 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, including 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.
Who this is not good for: Those with a thin credit history or less-than-stellar credit score.
Debt relief services versus debt consolidation loan: Unlike debt consolidation loans, debt relief services aim to eliminate some of your debt without you having to pay it. With that said, pursuing debt relief is a risky move, and it can damage your credit score.
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.
Who this is not good for: Those with little wiggle room in the budget.
Credit counseling versus 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.
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 is also 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.
Who this is not good for: People with a young credit history or a less-than-average score.
In an effort to combat rising inflation, the Federal Open Market Committee (FOMC) raised interest rates seven times in 2022. Most recently, the Fed hiked rates by 0.25 percent during the first Fed meeting of 2023. These rate hikes have caused interest rates on personal loans to rise.
Most personal loans have fixed rates, meaning that borrowers who already have a personal debt loan for debt consolidation do not need to worry. However, those looking to take out a new loan may face higher rates.
If you are in the market for a debt consolidation loan and want to ensure you get the best rate possible, there are some steps you can take.
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.