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Best debt consolidation loans in July 2024

Updated Jul 02, 2024

What to know first: Debt consolidation loans allow borrowers to combine high-interest debt into a new loan, ideally with a lower interest rate. These loans typically have interest rates that range from around 7 percent to 36 percent, but the rate you qualify for depends on your credit history, annual income and debt-to-income (DTI) ratio.

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PERSONAL LOANS

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

4.7

Est. APR
8.89- 24.29%
* with AutoPay
Loan term
3-7 yrs*
Loan amount
$5k- $100K
Min credit score
695
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Apply on partner site

PERSONAL LOANS

Upstart: Best for little credit history

4.8

Est. APR
7.80- 35.99%
Loan term
3-5 yrs
Loan amount
$1k- $50K
Min credit score
300
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Check rate with Bankrate

Achieve: Bankrate 2024 Awards Winner for Best Debt Consolidation Loan

4.7

Est. APR
8.99- 35.99%
Loan term
2-5 yrs
Loan amount
$5k- $50K
Min credit score
620
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Check rate with Bankrate

PERSONAL LOANS

LendingClub: Best for using a co-borrower

4.5

Est. APR
8.98- 35.99%
Loan term
2-5 yrs
Loan amount
$1k- $40K
Min credit score
600
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Check rate with Bankrate

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
640
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Check rate with Bankrate

PERSONAL LOANS

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

4.6

Est. APR
8.99- 35.99%
Loan term
3-5 yrs
Loan amount
$2k- $50K
Min credit score
600
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Check rate with Bankrate

PERSONAL LOANS

Citi® Personal Loan: Best for multiple discounts

4.6

Est. APR
11.49- 20.49%
Loan term
1-5 yrs
Loan amount
$2k- $30K
Min credit score
720
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Apply on partner site

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
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Avant: BEST FOR PEOPLE WITH BAD CREDIT

4.7

Est. APR
9.95- 35.99%
Loan term
2-5 yrs
Loan amount
$2k- $35K
Min credit score
580

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
660

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Compare debt consolidation loan rates from Bankrate's top picks 

Before making a decision with your debt, use this table to take a deeper look at our top consolidation loans. Scan each of our top debt consolidation lenders and compare the loan terms, amounts, APR ranges and minimum credit scores to find the best option for your consolidation needs.

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN. CREDIT SCORE
LightStream High-dollar loans and longer repayment terms 8.89%-24.29%* with AutoPay $5,000-$100,000 2 - 7 years 695
Upstart Best for little credit history 7.80%-35.99% $1,000-$50,000 3 - 5 years No requirement
Achieve Quick approval 8.99%-35.99% $5,000-$50,000 2 - 5 years 620
LendingClub Using a co-borrower 8.98%-35.99% $1,000-$40,000 2 - 5 years 600
Happy Money Consolidating credit card debt 11.72%-17.99% $5,000-$40,000 2 - 5 years 640
Best Egg High-income earners with good credit 8.99%-35.99% $2,000-$50,000 3 - 5 years 600
Citi Multiple discounts 11.49%-20.49% $2,000-$30,000 1 - 5 years 720
Upgrade Fast funding 8.49%-35.99% $1,000-$50,000 2 - 7 years 600
Avant People with bad credit 9.95%-35.99% $2,000-$35,000 2 - 5 years 580
Discover Good credit and next-day funding 7.99%-24.99% $2,500-$40,000 3 - 7 years 660

A closer look at our top debt consolidation loan lenders

The following is a closer look at each of our top picks, highlighting the most important aspects of each loan. This includes the lender's loan offerings and how they stand out against other lenders, who each loan is best for and why and, when available, unique Bankrate user data insights. 

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

LightStream
Rating: 4.7 stars out of 5
4.7

Overview: LightStream, part of Truist Bank, is an online-only lender specializing in high loan amounts, long terms and low rates for those with good or excellent credit. Most Bankrate users who take out a loan with LightStream have an excellent credit score.

Est. APR
8.89%–24.29%
Loan amount
$5k– $100k
Min credit score
695

Upstart: Best for limited credit history

Upstart
Rating: 4.8 stars out of 5
4.8

Overview: Upstart is Bankrate's 2024 award winner for best bad credit personal loan. It offers loans up to $50,000 and applicants can potentially qualify even without having enough credit history to generate a score. 

Est. APR
7.80%–35.99%
Loan amount
$1k– $50k
Min credit score
300

Achieve: Best debt consolidation loan

Achieve
Rating: 4.7 stars out of 5
4.7

Overview: Formerly known as Freedom Plus, Achieve's debt consolidation discount and co-borrower option sets this lender apart as the best consolidation loan. Plus, it offers borrowers flexible debt consolidation solutions, as long as they have at least $5,000 of debt that needs to be financed with a loan. 

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

LendingClub: Best for using a co-borrower

LendingClub
Rating: 4.5 stars out of 5
4.5

Overview: Headquartered in San Francisco, LendingClub started as a peer-to-peer lender in 2007, but has since transitioned to a loan marketplace. Its minimum loan amount is lower than many other lenders at just $1,000.

Est. APR
8.98%–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's loan, the Payoff Loan, is made specifically for consolidating credit card debt and features one of the lowest APR maximums on the market. According to a 2022 Happy Money study, borrowers who consolidated at least $5,000 in credit card debt saw an average FICO increase of 49 points within four months of getting their loan.

Est. APR
11.72%–17.99%
Loan amount
$5k– $40k
Min credit score
640

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

Best Egg
Rating: 4.6 stars out of 5
4.6

Overview: Best Egg's loans are ideal for consolidation of many types of unsecured debt, from credit cards to medical debt. It has funded over 1.1 million loans since its inception in 2014. 

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

Citi personal loan: Best for multiple discounts 

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

Overview: New York-based Citi is well known for its extensive banking products. Its personal loans come with zero application, origination, late payment or prepayment fees. This, along with its multiple discounts and a low maximum APR, makes for potentially low-cost loans. But you must have the credit to qualify.

Est. APR
11.49%–20.49%
Loan amount
$2k– $30k
Min credit score
720

Upgrade: Best for fast funding

Upgrade
Rating: 4.7 stars out of 5
4.7

Overview: Upgrade is one of the newer companies on our list, founded in 2016. It isn't the only lender that offers same-day funding, but it also extends this benefit to borrowers with fair credit. Along with these features Upgrade offers a seamless online experience and customer support seven days a week.

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

Avant: Best for people with bad credit

Avant
Rating: 4.7 stars out of 5
4.7

Overview: Founded in 2012 and headquartered in Chicago, Avant is one of the few lenders that accept borrowers with a credit score under 600. It's a competitive option for those who have bad credit. 

Est. APR
9.95%–35.99%
Loan amount
$2k– $35k
Min credit score
580

Discover: Best for good credit and next-day funding 

Discover
Rating: 4.8 stars out of 5
4.8

Overview: Discover tested its first credit card in 1985 and has come a long way since. Headquartered in Riverwoods, Illinois, Discover has grown into a company that offers digital banking services well beyond just credit cards — and that product suite includes personal loans. 

Est. APR
7.99%–24.99%
Loan amount
$2.5k– $35k
Min credit score
660

What are debt consolidation loans and how do they work? 

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 fixed payment. Debt consolidation loans work to save you thousands of dollars in interest by consolidating debts instead of making the minimum payment on multiple variable interest rate credit cards. This is especially true if you secure a lower interest rate.

The debt consolidation loan process starts with deciding which debts you want to pay off. Next, you’ll need to qualify based on the lender’s requirements. A high credit score is necessary to get the best rates. 

The lender will deposit your funds into your bank account or will send the money directly to your creditors. Once the loan is paid out, you'll make payments based on your chosen terms.

When is a debt consolidation loan a good idea?  

While a great repayment tool, a debt consolidation loan won’t change your spending habits. If your income suddenly drops or you incur more debt, a fixed monthly payment may become a burden. Weighing the pros and cons of debt consolidation will help you decide if it’s the best move for your finances.

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 payments 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 12 percent.
  • Prepayment penalties may limit how quickly you can pay the balance off.
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The author's expert insights: 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

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 to compare debt consolidation loans 

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 — among other factors — when assessing loan applications. Some specialize in bad credit debt consolidation loans but typically have higher rates and fees, while excellent credit lenders tend to offer low rates for high credit scores.
  • Review interest rates: Different lenders advertise different annual percentage rates (APRs). The APR is the annual cost expressed as a percentage. It combines the interest rate and any fees. 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. 

How the Federal Reserve impacts debt consolidation loans 

Interest rates were originally predicted to see declines in 2024, which could have lowered debt consolidation loan rates as well. However, this sentiment has since changed due to stubbornly high inflation. It's more likely that the Fed will keep rates as-is rather than implementing a rate cut in the near future. 

Even so, record-breaking high 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 12 percent in early 2024.

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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. However, you will have an easier time qualifying for a debt consolidation loan with a higher credit score. 

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 for your debt consolidation loan to fund. 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 APRs go to the borrowers with the highest credit scores. That doesn’t mean you won’t benefit from a debt consolidation loan with bad credit. It only 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. 

If your credit 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 both. If you cannot get approved, you may want to consider other ways to consolidate debt.

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. 

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Bankrate tip

As your credit scores improve, you may be targeted with a large number of new credit card offers. Resist the urge to take on unnecessary debts and instead focus on growing your credit and building your savings.

Alternatives to personal loans for debt consolidation 

If you’re not convinced a personal loan is the right fit, you may want to consider the pros and cons of debt consolidation alternatives. You may be able to find help with debt relief in a few forms, including other financing options and methods that don't involve taking out a loan.

Other options that involve borrowing

Balance transfer cards, home equity loans, home equity lines of credit and peer-to-peer loans may be better debt consolidation options for you. It depends on how much debt you have, your credit scores, and how quickly you’d like to pay off the balances. 

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.

Debt consolidation vs. debt relief

Although often talked about together, debt relief and debt consolidation loans are not synonyms. In many senses, debt relief is an umbrella term. Debt relief encompasses many different strategies for getting out of debt, including consolidation. 

Each type of debt relief has benefits and drawbacks. Some debt relief strategies involve working with a nonprofit credit counselor or for-profit companies. A debt relief company may steer you toward debt consolidation or building a debt management plan. 

If those strategies fail, or the customer has too much debt to handle that way, a debt relief company may suggest debt settlement or bankruptcy. These options come with big drawbacks, like long-term damage to your credit score, and should be considered last. 

FAQs about debt consolidation loans

How we chose the best debt consolidation loan lenders

Bankrate's trusted debt consolidation loans industry expertise

57

years in business

30

lenders reviewed

20

loan features weighed

665

data points collected

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

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