Best Debt Consolidation Loans

Find a personal loan for debt consolidation to help make debt repayment easier

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You can use personal loans for a lot of different purposes. They can help you cover emergency expenses, finance a home improvement project, or even purchase a vehicle. Yet you might be surprised to learn that, with the right plan and some consistent follow-through, personal loans could potentially help you get out of debt faster.

With debt consolidation loans, you can pay off high-interest debts like credit cards. If your new loan features a lower interest rate than you were paying before, you could save money in interest fees. Below you'll find our complete list of the best personal loans for debt consolidation as well as information about how debt consolidation loans work and how they can impact your credit.

Best Debt Consolidation Loans of January 2022

Best Rate : LightStream

LightStream logo

LightStream is the online lending division of SunTrust Bank. LightStream offers rates starting as low as 2.49% (with auto pay) on personal loans for debt consolidation. The rates will vary though by amount of loan and duration of the loan. 

If you qualify, the lender may let you borrow up to $100,000. When you add in the benefit of no fees, LightStream may be an affordable option to consolidate other high-interest debts.

  • Rates as low as 4.98% on debt consolidation loans when signing up for auto pay

  • No fees

  • LightStream guarantees to beat any qualifying rate from another lender (restrictions apply)

  • Good credit is recommended

  • No pre-approvals—you must allow a hard inquiry of your credit report to check your rate

Other important information:

  • Minimum/maximum amount you can borrow: $5,000 to $100,000.
  • APR range: 2.49%–19.99% for consolidation loans after signing up for autopay.
  • Fees: LightStream doesn't charge borrowers any fees. (Florida loans are subject to Documentary Stamp Tax.)
  • Minimum recommended credit score: Reported to be 660, but not disclosed on LightStream's website
  • Other qualification requirements: LightStream looks for borrowers with "good credit." The lender defines good credit as several years of credit history, a mixture of account types, and few delinquencies. An ability to save, stable income, and an acceptable debt-to-income ratio are also keys to qualifying for a loan.
  • Repayment terms: Debt consolidation loans must be repaid between 24 and 84 months. 
  • Time to receive funds: Funds possibly deposited in your account the same day you apply.
  • Restrictions: If you earn income from the cannabis industry, LightStream won't count those earnings for loan qualification purposes. You can't refinance an existing LightStream loan with a new one. There are also restrictions on how you use the loan. For example, funds can’t be used to cover educational or business expenses.

Read the full review: LightStreams Personal Loans

Best for Fair Credit : Payoff

Payoff logo

The Payoff platform helps people who want to consolidate credit card debt find lenders that may be willing to help. Interest rates from Payoff Lending Partners start as low as 5.99%. You can borrow up to $40,000 if you qualify. Borrowers will also receive a free monthly update of their FICO Score.

  • Borrow with a fair credit score (as low as 600), if you can satisfy other loan requirements

  • Few fees apply. Loans include no application fee, prepayment penalty, late fee, or annual fee

  • A soft credit inquiry allows you to check your rate online

  • Limitations on how you use funds—consolidate credit cards and certain unsecured installment loans only

  • Origination fees of up to 5% may apply

  • Minimum rate increases to 6.99% if you need to borrow more than $15,000

Other important information:

  • Minimum/maximum amount you can borrow: $5,000 to $40,000
  • APR range: 5.99%–24.99% (6.99% minimum for loans over $15,000)
  • Fees: Origination fees range between 0% and 5%. 
  • Minimum recommended credit score: 600 FICO Score
  • Other qualification requirements: To qualify, they'll also consider your debt-to-income ratio of 50% or lower, age of credit history, and satisfactory tradelines that you’ve paid on time, and zero delinquencies on your credit report in the past 12 months.
  • Repayment terms: Select terms between 2 to 5 years.
  • Time to receive funds: Most loans funded in 2–5 business days.
  • Restrictions: Payoff loans aren’t available to residents of the following states: Massachusetts, Mississippi, Nebraska, and Nevada.

Read the full review: Payoff Personal Loans

Best for Bad Credit : Avant



Avant, through its relationship with WebBank, offers and services personal loans for qualified borrowers. The company has issued over 800,000 loans since it was founded in 2012. 

Personal loans from Avant may be a good fit for middle-income borrowers who don’t have perfect credit histories. Rates start at 9.95% and climb up to 35.99%. That’s admittedly high compared with the APR range some other lenders offer. Yet bad credit borrowers could potentially save money with an Avant personal loan versus other high-rate financing options, like credit cards. 

  • No prepayment penalties

  • Avant performs a soft credit inquiry when you first check your loan rates and terms

  • Easy-to-use app lets you manage your account on a mobile device

  • APR is high compared to what you might qualify for somewhere else, if you have good credit

  • Upfront administration fee (up to 4.75%) comes directly out of your loan

  • Late fees and dishonest payment fees

Other important information:

  • Minimum/maximum amount you can borrow: $2,000 to $35,000 (Minimums vary by state.)
  • APR range: 9.95%–35.99%
  • Fees: Avant charges an administration fee of up to 4.75%. Late fees and dishonored payment fees could apply as well. 
  • Minimum recommended credit score: Most qualified applicants have a minimum score of 600 to 700.
  • Other qualification requirements: Avant considers your credit score and income to determine if you qualify for a loan and, if so, how much you can borrow. The lender may need to verify information about your identity, employment, income, and bank account as part of the application process.
  • Repayment terms: 24 to 60 months
  • Time to receive funds: Funds are usually available by the next business day.

Read the full review: Avant Personal Loans

Best Customer Reviews : Best Egg

BestEgg logo

BestEgg logo

Best Egg is an online lending platform that helps borrowers find personal loans they can use to consolidate debt and for other purposes. The platform has funded over 500,000 loans (through FDIC-insured Cross River Bank) since it was founded in 2014. 

Fixed-rate loans with Best Egg start as low as 5.99%. Qualified borrowers may access up to $35,000 in funding.

  • A fair credit score (over 640) may be sufficient to qualify, but not at the lowest rates

  • You can have two loans open at once with Best Egg

  • A soft credit inquiry when you check your loan rate

  • Charges an origination fee from 0.99% to 5.99%

  • Low maximum loan amount compared with some other lenders (especially if you have good credit and high income)

  • A credit score of 700 or higher and at least $100,000 in annual income is necessary to qualify for the lowest APR

Other important information:

  • Minimum/maximum amount you can borrow: $2,000 to $35,000 (Potentially borrow up to $50,000 with special offers.)
  • APR range: 5.99%–35.99%
  • Fees: Best Egg charges an origination fee of up to 5.99%. Returned payments also incur fees of $15 each.  
  • Minimum recommended credit score: Borrowers need a FICO Score above 640.
  • Other qualification requirements: In addition to your credit score and income, Best Egg also reviews your debt-to-income ratio. If your income is higher than your debt, you may qualify.
  • Repayment terms: 36 to 60 months
  • Time to receive funds: as little as 1–3 business days
  • Restrictions: Loans are not available to residents of Vermont, West Virginia, or the U.S. Territories. 

Read the full review: Best Egg Personal Loans

Best for Good Credit : Marcus

Marcus by Goldman Sachs

Marcus—an online branch of Goldman Sachs—offers high-yield savings accounts and personal loans. Loans go as high as $40,000 and there are no fees whatsoever.

APRs start at 6.99% and go up to 19.99%. You also have the option to change your due date if the one assigned to you doesn't work for you.

  • Low APR starts at 6.99% for borrowers with excellent credit.

  • No fees — not even late fees.

  • Pre-qualification option available to see if you're eligible before applying.

  • Autopay available.

  • No co-signer option.

  • At least high fair credit needed to qualify.

Other important information:

  • Minimum/maximum amount you can borrow: $3,500 to $40,000
  • APR range: 6.99%–19.99%
  • Fees: No fees whatsoever. 
  • Minimum recommended credit score: Most personal loan borrowers have a credit score of 660 and above.
  • Repayment terms: 36 to 72 months
  • Time to receive funds: Within 1–4 business days

Read the full review: Marcus Personal Loans

Best Bank : Wells Fargo

Wells Fargo

Wells Fargo

For borrowers who prefer an in-person loan application experience, Wells Fargo offers assistance across the country at any of their 5,200 branches. As one the largest banks, applicants with good credit have access to flexible repayments terms starting at 12 months and competitive rates starting at 5.74%.

  • Funding as soon as the next business day

  • High maximum loan amount

  • Discounts available on loan rates

  • Prequalification option only available to current customers

  • In-person applications only for new customers

  • History of scandals

Other important information:

  • Maximum/minimum amount you can borrow: $3,000 to $100,000
  • APR range: 5.74%–19.99% (with 0.25% relationship discount)
  • Minimum recommended credit score: 670
  • Fees: Minimal
  • Other qualification requirements: To receive rate discount, applicants need to opt into autopay with a qualifying Wells Fargo bank account. 
  • Repayment terms: 12 to 84 months
  • Time to receive funds: As soon as the next business day
  • Restrictions: New customers need to apply at a branch

Read the full review: Wells Fargo Personal Loans

Best for Fast Funding : Rocket Loans

Rocket Loans

Rocket Loans

Borrowers with lower credit scores will like that Rocket Loans offers fast funding—same day available—and competitive rates starting at 5.97% with autopay, although there is an origination fee. Part of the Quicken family of companies, applicants can prequalify for a loan through a soft credit pull. 

  • Same day funding available

  • Check initial rate without affecting your credit score

  • Available for those with lower credit scores

  • 1% to 6% origination fee

  • Individual applications only

  • Autopay discount smaller compared to other lenders

Other important information:

  • Maximum/minimum amount you can borrow: $2,000 to $45,000
  • APR range: 5.97%–29.99% w/autopay discount
  • Fees: 1%–6% origination fee (deducted from loan proceeds); $15 late fee
  • Minimum recommended credit score: 580 
  • Other qualification requirements: Applicants need to be a U.S. citizen or permanent resident and the age of majority in their state. 
  • Repayment terms: 36 or 60 months
  • Time to receive funds: Same day funding available
  • Restrictions: No co-signers or joint applications allowed

Read the full review: Rocket Loans Personal Loans

Best Peer-to-Peer Lender : Peerform



Peerform is a peer-to-peer lending offering rates starting at 5.99% and origination fees starting at 1%—not exactly low for those who have excellent credit, but a viable choice for borrowers with fair credit scores. Applicants can take out loans as low as $4,000 and receive funding within a few business days. 

  • Prequalification available

  • No prepayment penalties when making extra payments or paying off remaining balance of loan

  • Borrowers can qualify for a loan even with a short credit history

  • Origination fees from 1% to 5%

  • At $4,000, minimum loan amount is high

  • No joint applications

Other important information:

  • Maximum/minimum amount you can borrow: $4,000 to $25,000
  • APR range: 5.99%–29.99%
  • Fees:1% to 5% origination fee; $15 late fee; $15 returned check fee
  • Minimum recommended credit score: 600
  • Other qualification requirements: Peerform requires one year’s worth of credit history without delinquencies 
  • Time to receive funds: Within a few business days 
  • Restrictions: Individual applications only

Read the full review: Peerform Personal Loans

Compare Best Debt Consolidation Loans–December 2022

Lender Best For APR Range Minimum Loan Amount Maximum Loan Amount Terms Recommended Credit Score
LightStream Best Rate 2.49%–19.99% with autopay $5,000 $100,000 24–84 months 660+
Payoff Best for Fair Credit 5.99%–24.99% $5,000 $40,000 2–5 years 640+
Avant Best for Bad Credit 9.95%–35.99% $2,000 (minimums vary by state) $35,000 24–60 months 600+
Best Egg Best Customer Reviews 5.99%–35.99% $2,000 $35,000 36–60 months 640+
Marcus by Goldman Sachs Best for Good Credit 6.99%–19.99% $3,500 $40,000 36–72 months 660+
Wells Fargo Best Bank 5.74%–19.99% with relationship discount $3,000 $100,000 12–84 months 670+
Rocket Loans Best for Fast Funding 5.97%–29.99% with autopay $2,000 $45,000 36 or 60 months 580+
Peerform Best Peer-to-Peer Lender 5.99%–29.99% $4,000 $25,000 Not readily available online 600+
Loan amounts, APR, and repayment period may vary by loan purpose or type.


What Is Debt Consolidation?

Debt consolidation is the process of combining several debts you already owe together into a single, new account. Once combined, you make one monthly payment to take care of your total credit obligation. 

The term debt consolidation can describe a few different approaches to combining debts, including:

With both approaches above, debt consolidation can roll several existing financial obligations into one. Ideally, with either option, your goal should be to obtain a lower interest rate and better terms.

How Does Debt Consolidation Work?

In general, debt consolidation is limited to unsecured credit obligations. These may include credit cards, student loans, and unsecured installment loans you currently owe. Medical bills may also fit into this category. However, if you want to refinance a secured loan, like a mortgage, you’ll generally need to look at different financing options.

There are a few common ways to consolidate unsecured debts. The chart below features highlights and a comparison of two of the most popular debt consolidation options.

Debt Consolidation Loans Credit Card Balance Transfers
The Process You borrow money with a new installment account to pay off existing debts. Afterward, make a single monthly payment on the new account. You borrow money with a revolving credit card to pay off existing debts. Afterward, make a single monthly payment on the new account.
Fees Your new lender might charge origination fees, application fees, or other fees that could raise the cost of financing. Many credit card balance transfers include a balance transfer fee that can increase the cost of financing.
APR Debt consolidation loans generally feature fixed rates over a fixed period of time. Low introductory rates often expire after 6–18 months. Once the introductory rate expires, you’ll be charged the standard APR on the account. (Average credit card rates are currently around 17%.)
Qualifying Lenders review your credit, income, and other factors to determine eligibility and set your interest rate. Lenders review your credit, income, and other factors to determine eligibility and set your interest rate.

Debt Consolidation and Your Credit

People commonly have two main questions when they consider debt consolidation options:

  • How much will it cost?
  • How will it impact my credit?

The first question can only be answered with research and rate shopping. Yet it's a bit easier to explain how debt consolidation may affect your credit.

Do Debt Consolidation Loans Hurt Your Credit?

Debt consolidation loans may be good for your credit scores, depending on the information on your credit reports. Credit scoring models, like FICO and VantageScore, pay close attention to the debt-to-limit ratio (aka credit utilization ratio) on your credit card accounts. When your credit reports show that you're using a larger percentage of your credit limits, your scores may suffer.

Installment accounts, like consolidation loans, don't receive the same treatment where credit scores are concerned. Imagine you owe $30,000 on an installment loan and $3,000 on a credit card with a $3,000 limit. Because the credit card is 100% utilized, it would likely impact your credit scores far more (and not in a good way) than the $30,000 installment account.

When you pay off revolving credit card debt with a debt consolidation loan, you may trigger a decrease in your credit utilization ratio. That reduction in credit utilization could result in a credit score increase. Additionally, your credit scores can be impacted by the number of accounts with balances on your credit report—the fewer, the better. When you use a new loan to pay off multiple accounts at once, it could potentially give your credit scores a small boost.

Do Balance Transfers Hurt Your Credit?

Opening a new credit card and using a balance transfer to pay off existing credit card debt may also lower your credit utilization ratio. However, a balance transfer card is still a revolving account. A debt consolidation loan might reduce your utilization ratio to 0% (if you paid off all of your credit card balances). A balance transfer to a new credit card won't have the same effect.

So, a credit card balance transfer could potentially improve your credit scores. But in general, paying off revolving credit cards with an installment account (aka a debt consolidation loan) has a chance to improve your scores more.

Is Debt Consolidation a Good Idea?

Here are a few signs that consolidating your debt might be a smart financial move.

  1. Your monthly payments are manageable, but you can’t afford to pay off your high-interest debt in full within the next few months.
  2. You can qualify for a lower interest rate than you’re paying on your current credit obligations.
  3. You’re paying down your debts and believe consolidating will help you to eliminate outstanding balances faster.
  4. You have a steady income, follow a budget, and believe you can avoid overspending in the future.

Only you can decide if debt consolidation is the right choice for your current financial situation. But considering some of the pros and cons of debt consolidation may make your decision a little easier.

  • Debt consolidation could reduce the amount of money you pay in interest. The average rate on an interest-assessing credit card is 14.75%. Meanwhile, the average interest rate on a 24-month personal loan is 9.46%, according to the Federal Reserve. 

  • Consolidating your debt might improve your credit. When you reduce your credit utilization ratio and the number of accounts with balances on your credit reports, your credit scores might benefit.

  • You only have to make one monthly payment to your new lender. This is easier to manage than multiple payments on various accounts.

  • Debt consolidation doesn't wipe out your debt. You'll have to follow a budget and avoid overspending if you want your new consolidation loan (or balance transfer card) to eliminate your debt for good.

  • If you have credit or income challenges, you may have trouble qualifying for a lower interest rate. There's usually little point in consolidating your debts if a new loan or balance transfer won't save you money. 

Bottom Line

A debt consolidation loan has the potential to help you improve your financial life. But whether a debt consolidation loan ultimately helps or hurts you depends on how you manage the account and your finances as a whole.

Above all, avoid the temptation to charge new balances on your recently paid-off credit cards. If you charge up new balances on the original accounts, you could be setting yourself up for a financial disaster in the future.

How We Chose the Best Debt Consolidation Loans

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders for all borrowing needs. We collected over twenty five data points across more than fifty lenders including interest rates, fees, loan amounts and repayment terms to ensure that our content helps users make the right borrowing decision for their needs.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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  2. Payoff. "Compare Lenders." Accessed Jan. 12, 2022.

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  4. Best Egg. "Personal Loan." Accessed Jan. 12, 2022.

  5. Marcus by Goldman Sachs. "We're Offering Personal Loans With No Fees. Ever." Accessed Jan. 12, 2022.

  6. Wells Fargo. "Personal Loan." Accessed Jan. 12, 2022.

  7. Rocket Loans. "Personal Loans." Accessed Jan. 12, 2022.

  8. Peerform. "Personal Loans." Accessed Jan. 12, 2022.