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Best debt consolidation loans in February 2024

Feb 21, 2024

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PERSONAL LOANS

LightStream: BEST FOR HIGH-DOLLAR LOANS AND GENEROUS REPAYMENT TERMS

4.7

Est. APR
7.99- 25.49%
* with AutoPay
Loan term
2-7 yrs*
Loan amount
$5k- $100K
Min credit score
695
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PERSONAL LOANS

Upstart: BEST FOR CONSUMERS WITH LITTLE CREDIT HISTORY

4.7

Est. APR
7.80- 35.99%
Loan term
3-5 yrs
Loan amount
$1k- $50K
Min credit score
Not disclosed
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Achieve: Bankrate 2024 Awards Winner for Best Debt Consolidation Loan

4.6

Est. APR
8.99- 35.99%
Loan term
2-5 yrs
Loan amount
$5k- $50K
Min credit score
620
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PERSONAL LOANS

Citi® Personal Loan: BEST FOR MULTIPLE DISCOUNTS

4.6

Est. APR
10.49- 19.49%
Loan term
1-5 yrs
Loan amount
$2k- $30K
Min credit score
720
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PERSONAL LOANS

LendingClub: BEST FOR USING A CO-BORROWER

4.1

Est. APR
9.57- 35.99%
Loan term
2-5 yrs
Loan amount
$1k- $40K
Min credit score
600
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PERSONAL LOANS

Happy Money: BEST FOR CONSOLIDATING CREDIT CARD DEBT

4.6

Est. APR
11.72- 17.99%
Loan term
2-5 yrs
Loan amount
$5k- $40K
Min credit score
Not disclosed
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PERSONAL LOANS

Avant: BEST FOR PEOPLE WITH BAD CREDIT

4.5

Est. APR
9.95- 35.99%
Loan term
1-5 yrs
Loan amount
$2k- $35K
Min credit score
550

PERSONAL LOANS

Upgrade: BEST FOR FAST FUNDING

4.7

Est. APR
8.49- 35.99%
with AutoPay
Loan term
2-7 yrs
Loan amount
$1k- $50K
Min credit score
600
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PERSONAL LOANS

Best Egg: BEST FOR HIGH-INCOME EARNERS WITH GOOD CREDIT

4.7

Est. APR
8.99- 35.99%
Loan term
3-5 yrs
Loan amount
$2k- $50K
Min credit score
600
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PERSONAL LOANS

Discover: BEST FOR GOOD CREDIT AND NEXT-DAY FUNDING

4.8

Est. APR
7.99- 24.99%
Loan term
3-7 yrs
Loan amount
$2.5k- $40K
Min credit score
Not disclosed

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How to compare debt consolidation loan lenders

There are many factors to consider before choosing an individual lender. Here are some key points to keep track of when comparing lenders.

  • Check loan amount ranges. The maximum or minimum you can borrow will vary depending on the lender. Add up the balances of all the credit you want to consolidate to make sure you apply for enough to  accomplish your goal. 
  • Learn approval requirements. Lenders consider your credit score, income and debt-to-income ratio when assessing loan applications. Some specialize in bad credit loans, while excellent credit lenders tend to offer low rates for high credit scores.
  • Review interest rates. Different lenders advertise different annual percentage rates. The lowest advertised rate is never guaranteed and your actual rate depends on your credit. 
  • Look for 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 how much money you need to borrow. 
  • Compare the payment on different loan terms. Most debt consolidation lenders offer repayment terms ranging between one and seven years. A longer term gives you the lowest payment, but at a higher rate. You’ll typically get a lower rate for a shorter term. Although a shorter term will save you a bundle in interest, your monthly payment will be larger. 

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 7.80%-35.99% $1,000-$50,000 3 or 5 years No requirement
Achieve Quick approval 8.99%-35.99% $5,000-$50,000 2-5 years 620
Citi Multiple discounts 10.49%-19.49% $2,000-$30,000 1-5 years 720
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
Upgrade Fast funding 8.49%-35.99% $1,000-$50,000 2-7 years 600
Best Egg High-income earners with good credit 8.99%-35.99% $2,000-$50,000 3-5 years 600
Discover Good to excellent credit 7.99%-24.99% $2,500-$40,000 3-7 years 660

A closer look at our top debt consolidation loan lenders

Here's a deep-dive into each lender, why is the best in each category and specifically who would benefit most from borrowing from the lender.

Lightstream: Best for high-dollar loans and generous repayment terms

LightStream
Rating: 4.7 stars out of 5
4.7

Overview: Lightstream touts itself as the nation's premier online lender and is so confident that its customers will have a positive experience that it provides a $100 guarantee to back up these claims. As part of Truist bank, it offers loans for nearly every purpose.

Est. APR
7.99%–25.49%
Loan amount
$5k– $100k
Min credit score
695

Upstart: Best for consumers with little credit history

Upstart
Rating: 4.1 stars out of 5
4.1

Overview: Upstart has originated over $16 billion in personal loans to-date, earning them a trustworthy reputation among online lenders. It offers low loan amounts starting at $1,000 and relatively low APRS that start at 6.40 percent.

Est. APR
7.80%–35.99%
Loan amount
$1k– $50k
Min credit score
Not specified

Achieve: Best debt consolidation loan

Achieve
Rating: 4.6 stars out of 5
4.6

Overview: Previously known as FreedomPlus, Achieve offers borrowers flexible solutions for the consolidation of debt. The lender primarily caters to those with fair credit, as there is a minimum credit score of 620.

Est. APR
8.99%–35.99%
Loan amount
$5k– $50k
Min credit score
620

Citi: Best for multiple discounts

Citi® Personal Loan
Rating: 4.6 stars out of 5
4.6

Overview: In addition to its well-known credit card products, Citi offers personal loans with competitive interest rates for borrowers looking to finance a small or midsize expense. Unlike other lenders, Citi doesn’t charge any application, origination or late payment fees, and there are no prepayment penalties. This can make its loans cost less compared to those offered by its competitors.

Est. APR
10.49%–19.49%
Loan amount
$2k– $30k
Min credit score
720

LendingClub: Best for using a co-borrower

LendingClub
Rating: 4.1 stars out of 5
4.1

Overview: LendingClub started as a peer-to-peer lender, but has since transitioned to a loan marketplace. It is a great option for small or midsize consolidation of debt as LendingClub has a minimum of $1,000.

Est. APR
9.57%–35.99%
Loan amount
$1k– $40k
Min credit score
600

Happy Money: Best for consolidating credit card debt

Happy Money
Rating: 4.6 stars out of 5
4.6

Overview: Happy Money offers debt consolidation loans through a network of officially insured and licensed lenders. This lender is unique from other lenders as it also functions as a financial wellness company that offers financial assessments, resources and debt management tools.

Est. APR
11.72%–17.99%
Loan amount
$5k– $40k
Min credit score
Not specified

Avant: Best for people with bad credit

Avant
Rating: 4.5 stars out of 5
4.5

Overview: Avant is a respected lender that has been in business since 2012. It is a competitive option for those that have less-than-perfect credit. The lender also does not enforce restrictions, limited to legal uses, on loan proceeds – ideal for those with different types of debt.

Est. APR
9.95%–35.99%
Loan amount
$2k– $35k
Min credit score
550

Upgrade: Best for fast funding

Upgrade
Rating: 4.7 stars out of 5
4.7

Overview: Upgrade boasts a seamless online experience, customer support seven days a week and flexible borrowing amounts. Borrowers can receive competitive, fixed rates to consolidate debt up to $50,000.

Est. APR
8.49%–35.99%
Loan amount
$1k– $50k
Min credit score
600

Best Egg: Best for high-income earners with good credit

Best Egg
Rating: 4.7 stars out of 5
4.7

Overview: Best Egg has earned its reputation as a legitimate and trustworthy online lender. The company has been in business since 2014 and has since served over 788,000 customers and has funded over 1.1 million loans.

Est. APR
8.99%–35.99%
Loan amount
$2k– $50k
Min credit score
600

Discover: Best for good credit and next-day funding

Discover
Rating: 4.8 stars out of 5
4.8

Overview: Although most commonly known for credit cards, Discover offers a wide selection of other products, including deposit accounts, student loans and personal loans — including debt consolidation loans. The bank has only one in-person branch, so it's best for those who are comfortable with completing the entire application process online.

Est. APR
7.99%–24.99%
Loan amount
$2.5k– $35k
Min credit score
Not specified

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

Bankrate's trusted personal loans industry expertise

57 years

in business

30

lenders reviewed

20

loan features weighed

665

data points collected

To select the best 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:

What to know about debt consolidation loans

A debt consolidation loan is a type of financing that combines several other debts — usually high-interest rate credit cards — into one new loan with a lower interest rate and a fixed payment. You can save you thousands of dollars in interest charges by using a personal loan to consolidate debt instead of continuing to pay the minimum payment on multiple variable interest rate credit cards. 

You’re not limited to consolidating only credit cards with a debt consolidation loan. It can be a valuable tool to combine student and car loan balances or even clear out a home equity loan balance on a house you plan to sell. 

While there are many ways to consolidate your debt, a debt consolidation loan from a lender, bank or credit union is usually easier to qualify for than a home equity loan, with funds available in days rather than weeks or months. 

How do debt consolidation loans work?

The general debt consolidation loan process starts with deciding what debts you want to pay off. While it’s a great tool for paying off maxed-out credit cards, you can also spread the term out on auto loan payments that have become unaffordable. Or you could consolidate several student loan balances into one payment. 

Next, you’ll need to qualify based on the lender’s requirements. You’ll need a high credit score to get the best rates. Lenders will also review your debt-to-income ratio to ensure you earn enough for your new monthly debt consolidation loan payment. 

The lender will deposit your funds into your bank account to pay off the other debts you choose and you’ll make payments on the new loan based on your chosen terms.

Do debt consolidation loans hurt your credit?

Your credit score may temporarily drop slightly because of the hard inquiry related to your final personal loan approval. You may also see a small dip if you borrow more than the balances you’re paying off for extra cash since you'll have more total debt.

However, you’ll likely see a large jump in your scores soon after paying off credit cards — as long as you don’t reuse them. Your credit utilization ratio measures how much revolving debt (like credit cards) you carry, and the lower it is, the higher your credit scores typically are. 

Like any loan, your credit score could drop if you miss a personal loan monthly payment.

Pros and cons of a debt consolidation loan 

Debt consolidation loans offer some great financial benefits. They can save you hundreds or even thousands of dollars in interest charges, or free up room in your budget to pad your emergency or retirement fund. 

However, a debt consolidation loan won’t change your credit spending habits, and the fixed monthly payment may become a burden if your income suddenly drops. Weighing the pros and cons will help you decide if it’s the best type of loan for you to combine your debts.

Green circle with a checkmark inside

Pros

  • Interest rates are fixed and usually lower than credit cards and payday loans.
  • You’ll only have one monthly payment to track instead of several.
  • No collateral is typically required — your car and home are safe.
  • Funding may be available in as little as one business day.
  • Credit scores could improve after credit cards are paid off.
Red circle with an X inside

Cons

  • Maximum terms are usually limited to seven years which could make payment high.
  • Rates may be higher for borrowers with bad credit.
  • Funds can’t be reused as they’re paid off like credit cards.
  • Origination fees may be as high as 10 percent.
  • Prepayment penalties may limit how quickly you can pay the balance off.
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Ask the experts: When is the best time to get a debt consolidation loan?

There are three times when a debt consolidation typically makes the most sense. The first is when you want to pay off credit card debts to reduce how much interest you pay and improve your credit scores. The second is if you want to simplify your bill-paying strategy by combining credit cards, medical bills and other debt into one payment with a set payoff date. Finally, a debt consolidation loan could help you pay your debt off faster if you can afford the high payment that comes with a one or two year term.

- Denny Ceizyk | Bankrate Senior Loans Writer

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, avoid making late payments and keep balances low on the credit card accounts you pay off.

How to get a debt consolidation loan

Whether you have bad credit or excellent credit, the steps for getting a debt consolidation loan are the same. 

1. Add up the balances of all the debts you want to combine

Check your current statements for the most accurate figures, and add a few extra hundred for interest that will accrue while you’re waiting to fund your debt consolidation loan. It’s easier to reduce your loan amount then increase it once you’re approved. 

Use a debt consolidation calculator for a rough look at how much you could save, and what your new payment will look like. 

2. Check your credit scores

The lowest advertised debt consolidation interest rates go to the highest credit score borrowers. That doesn’t mean you won’t benefit from a debt consolidation loan even with bad credit. It just means you may need to refinance your debt consolidation loan to save more money as your credit scores improve. 

3. Compare loan options by prequalifying with several lenders

Most debt consolidation lenders offer a prequalification option, which allows you to get a ballpark of the terms and APRs you may be eligible for without hurting your credit score. Review the APRs, terms and fees to decide which option is right for you.

4. Apply with the debt consolidation lender you choose

Unless you do business in person at your local bank or credit union, you’ll apply for your loan online. The lender will collect information like your pay stubs, previous employment contacts and last few years of address history. Your credit will be pulled to confirm your credit score and look at how much other debt you carry. 

One thing worth noting: If your credit report score is lower than you estimated or you have too much debt compared to your income, the lender could reduce your loan amount, increase your rate or do both. 

5. Finalize your papers, get your funds and pay off your debts

Once your approval is completed, provide any additional documents the lender requests. Some debt consolidation lenders pay your creditors directly, while others give you the funds to pay them on your own. 

Lightbulb

Bankrate tip

Resist the urge to open new credit cards. As your credit scores improve, you may be inundated with new credit card offers. Avoid them and focus on building savings. 

Alternatives to personal loans for debt consolidation 

If you’re not convinced a personal loan is the right fit for your debt consolidation plans, you may want to consider the pros and cons of other loan options. Balance transfer cards, home equity loans, home equity lines of credit, peer-to-peer loans and debt management plans may work better depending on how much debt you have, your credit scores, and how quickly you’d like to pay off the balances. 

Other debt consolidation loan options

Type of debt consolidation loan Pros Cons
Funding approval may be faster; Lower loan amounts available than most home equity products allow; Lower interest rates than most credit cards; No collateral requirements Fees for origination, late payments or early pay off may apply; Higher credit scores required for best rates; Shorter terms than home equity options
Rates as low as 0% during introductory period; Faster to get than other debt consolidation loan types; No risk of losing assets since no collateral is required Typical fees range between 3 percent and 5 percent added to transfer balance; Higher APR than other loans after the intro period expires; Hard credit pull could lower credit scores
Fixed rate loan with a set monthly payment; Repayment terms as long as 30 years available; Lower interest rates than credit cards; Higher loan amounts Risk of losing home to foreclosure; Must have home equity to qualify; Longer repayment terms may mean more interest charges overall; Longer average funding turn time
Interest-only payment options to keep payments low; Payments only based on amount drawn; Can pay off and re-use the account as often as needed Risk of losing home to foreclosure; Variable interest rate; Line is limited by how much home equity you have; Yearly fees and close out penalties may apply
Fast application, approval and funding process; More flexible qualifying standards Fees ranging between 1 percent and 8 percent of loan amount; Higher interest rates than traditional lenders
Options may be provided free of charge; Better rates than other choices; May lead to improved credit score Plan may set restrictions on spending; Credit score may drop at first

Ways to consolidate debt without a new loan

The ultimate goal of any debt consolidation strategy is to be debt free. If you don’t qualify for debt consolidation loans, you may want to consider other strategies for paying off debt

Ask the experts: Is a personal loan better than a balance transfer credit card for debt consolidation?


Nationally recognized student financial aid expert

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.

Senior Loans Writer

The main debt consolidation advantage of a personal loan versus a balance transfer credit card is that it replaces revolving debt with installment debt with a definite payoff date. Consumer credit card use hit an all time high in 2023, and personal loans offer a way to combine those debts into one payment, often at a much lower rate than credit cards. Balance transfer cards are a good choice for borrowers who are very disciplined with their credit use, and can take advantage of teaser rates as low as 0%. However, once the introductory period is over, the transfer credit card rate can rise.

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.

How the Federal Reserve impacts personal loans

Debt consolidation loan rates may be headed lower in 2024 as the Fed is expected to lower rates twice in the second half of the year. That could mean extra savings if you’re carrying a lot of high-interest rate credit card debt from last year. 

Despite the lower rate forecast, the average personal loan rate edged up to 11.94 percent in January 2024, a slight increase from the 11.60 average rate in December 2023. 

Higher rates didn’t deter personal loan borrowers in 2023. They borrowed an average of $11,281, the highest average on record, according to TransUnion data. Borrowers with excellent credit turned to personal loans at a record pace last year, as originations of personal loans for excellent credit jumped 20 percent from 2022.

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Personal Loan Interest Rate Forecast For 2024

Average personal loan interest rates hover around 11 to 12 percent in late 2023.

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FAQs about debt consolidation loans