10 Best Debt Consolidation Loans in 2023
If you currently have multiple high-interest debts, such as credit cards and payment plans, then debt consolidation could be a way to save money and make repayment easier. Debt consolidation is a way to refinance existing debt by taking out one loan with a lower interest rate and monthly payment to consolidate your existing debts and get rid of your outstanding balance more quickly.
Although the best loans have low personal loan rates and fees, personal loan interest rates will be higher for people with bad credit rather than good credit. Find out what you need to know about personal loans to consolidate your debt.
LightStream: Best for Quick Funding
SoFi: Best for Larger Loans
Upgrade: Best for Bad Credit
PersonalLoans.com: Best for Low APRs
LendingClub: Best for Peer-To-Peer Loans
Best Egg: Best for No Prepayment Fees
Discover: Best for No Interest for 30 Days
Happy Money (Payoff): Best for Credit Card Debt
Upstart: Best for Secured Loans
Avant: Best for Short Terms
Top 10 Personal Loans for Debt Consolidation
It only makes sense to refinance your credit card debt if you can find a lower rate than your credit card is charging. The field is so competitive, however, that you should look for personal loans with additional features and benefits. When researching how to pay off debt, consider the following lenders for debt consolidation loan options:
LightStream: Best for Quick Funding
LightStream is a division of SunTrust Bank and offers a host of benefits for debt consolidation loans, including $0 fees, same-day funding, loan terms up to 84 months and loan limits up to $100,000. Borrowers who aren’t satisfied with their lending experience can contact LightStream, fill out a questionnaire within 30 days of loan disbursement and receive $100.
Rates are reasonable, starting at 8.99% for borrowers with excellent credit on a $10,000 or greater loan maturing in 36 months. The company also offers a Rate Beat Program that promises to beat any comparable rate from a competitor by 0.10%.
Details
APR: 8.99% to 25.99%
Loan Terms: 24 to 84 months
Loan Amounts: $5,000 to $100,000
Fees: None
Funding Time: As soon as the same day as your application
Pros
Satisfaction guarantee
Rate Beat Program
High loan limits of $100,000
24- to 144-month term loan range
No fees
Fast funding
Cons
Excellent credit needed for lowest rates
Loans required to be identical to qualify for Rate Beat Program
SoFi: Best for Larger Loans
SoFi offers many of the top features of LightStream, including $0 fees, refinancing rates as low as 8.49%, loan limits up to $100,000 and terms as long as seven years. Funding is fast, and you can receive your money within a few days of signing your application.
Details:
APR: 8.99% to 25.81%
Loan Terms: 36 to 84 months
Loan Amounts: $5,000 to $100,000
Fees: None
Funding Time: Within a few days
Pros
$0 fees
Low debt consolidation rates
High loan limits
Long loan terms available
Rapid funding
Cons
Debt consolidation loans only offered for unsecured debts, like credit card debt.
Must meet state eligibility qualifications for approval
Upgrade: Best for Bad Credit
Upgrade has a quick, one-page application you can complete online to check your rate and get a loan decision within seconds. Fixed-rate loans are offered between $1,000 and $50,000, and you can pay it back over 24 to 84 months.
Although total funding time can be up to four business days, Upgrade sends your funds within one day of verifying your identity and your financial information. Loans have an origination fee of 1% to 5%.
Details
APR: 8.49% to 35.99%
Loan Terms: 24 to 84 months
Loan Amounts: $1,000 to $50,000
Fees: Origination fee, 1.85% to 9.99%
Funding Time: Within four business days
Pros
Easy to apply
Loans up to $50,000
Rapid funding after verification
Cons
Rates can go as high as 35.99%
Origination fee of 1.85% to 9.99%
PersonalLoans.com: Best for Low APRs
PersonalLoans.com serves as a connector between borrowers and lenders. After completing an online application, lenders in the PersonalLoans.com network will review your information and decide whether or not to extend credit.
You can receive funding in as little as one business day after your application for loans of $250 to $35,000, after which you’ll have between 90 days and 72 months to pay off your loan, at rates between 5.99% and 35.89%. For peer-to-peer loans, you should have a credit score of 600+ and an income of at least $2,000 per month.
Details
APR: 5.99% to 35.89%
Loan Terms: 90 days to 72 months
Loan Amounts: $250 to $35,000
Fees: Origination fee for peer-to-peer is between1% to 5%
Funding Time: As soon as the next business day after signing your loan agreement
Pros
Network of lenders
Rapid funding
Lowest rates are competitive
Wide range of loan terms
Cons
Origination fee of 1% to 5% for peer-to-peer loans
Relatively low maximum funding amount
LendingClub: Best for Peer-To-Peer Loans
LendingClub works somewhat like its competitor PersonalLoans.com in that it doesn’t originate loans itself, but rather, connects investors and borrowers. LendingClub provides access to loans of between $1,000 and $40,000, with interest rates as low as 9.57%. Loan terms are 24 to 60 months and origination fees cost between 3% and 8%.
Details
APR: 9.57% to 35.99%
Loan Terms: 24 to 60 months
Loan Amounts: $1,000 to $40,000
Fees: Origination fee between 3% to 8%
Funding Time: As few as 3 days
Pros
Peer-to-peer lenders offering access to numerous funding sources
High customer satisfaction
Funds available in approximately three days
Cons
Highest rates reach 35.99%
High origination fees
Best Egg: Best for No Prepayment Fees
With Best Egg, you can apply online and have your funding in as little as one business day. The company offers either three- or five-year loans, which contain no hidden fees or prepayment penalties. Rates as low as 8.99% make the lender competitive with peers, and loan maximums reach as high as $50,000.
Details
APR: 8.99% to 35.99%
Loan Terms: 36 to 60 months
Loan Amounts: $2,000 to $50,000
Fees: Origination fee, 0.99% to 8.99%
Funding Time: 1+ days
Pros
Rates as low as 8.99%
Quick access to funds
No prepayment penalties
High maximum funding level of $50,000
Cons
Rates top out at 35.99%
Origination fees of 0.99% to 8.99%
Discover: Best for No Interest for 30 Days
There are no fees to originate a loan via Discover, which offers funding of$2,500 to $40,000 in one or more business days. The firm’s personal loan rates range from 7.99% to 24.99% and have terms of 36 to 84 months.
Details
APR: 7.99% to 24.99%
Loan Terms: 36 to 84 months
Loan Amounts: $2,500 to $40,000
Fees: None
Funding Time: 1+ days
Pros
No fees to originate loans
Flexible terms of between three and seven year
Midlevel interest rates
Cons
Relatively low maximum of $40,000
Relatively high minimum of $2,500
Happy Money: Best for Credit Card Debt
Happy Money, previously known as Payoff, is one of the few lenders that specifies a minimum credit score to qualify for a loan: 640. You also must have a debt-to-income ratio of less than 50%, at least three years of good credit history, no current credit delinquencies, and at least two open and satisfactory trade lines. The company offers loans from $5,000 to $40,000 for terms of two to five years, with rates ranging from 11.75% to 24.50%.
Details
APR: 11.52% to 24.81%
Loan Terms: 2 to 5 years
Loan Amounts: $5,000 to $40,000
Fees: Origination fee, up to 5%
Funding Time: 3-6 business days
Pros
Clearly articulated minimum standards
No late payment fees
Fixed payments and interest
Cons
High minimum interest rates of 11.52%
High minimum loan requirement of $5,000
Origination fees of up to 5%
Upstart: Best for Secured Loans
Upstart offers loans to fit nearly any need, from $1,000 to $50,000. Unlike many other lenders, Upstart offers consolidation loans for both secured and unsecured loans. Additionally, your education, area of study and job history are considered to qualify you for a lower rate.
You can check your rate with an easy one-page online application. Rates vary from 4.6% to 35.99%, and you can receive your money in as little as one business day.
Details
APR: 4.60% to 35.99%
Loan Terms: 3 or 5 years
Loan Amounts: $1,000 to $50,000
Fees: Origination fee, up to 8%
Funding Time: 1+ days
Pros
Flexible funding levels available
Consolidates both secured and unsecured loans
Easy application process
Rapid funding
Cons
Origination fees of up to 8%
Loan terms limited to either three or five years
Avant: Best for Short Terms
Flexible loan terms of 12 to 60 months are one of Avant’s highlights. The company can also provide funding by the next business day. Loan amounts range from $2,000 to $35,000, with rates of 9.95% to 35.99%. Administration fees cost anywhere between 1.50% and 4.75%.
Details
APR: 9.95% to 35.99%
Loan Terms: 12 to 60 months
Loan Amounts: $2,000 to $35,000
Fees: Administration fees: Up to 4.75%
Funding Time: 1+ days
Pros
Good range of loan maturities
Rapid financing of loans
Cons
Top rates of 35.99% are high
Administration fees up to 4.75%
Final Take
Debt consolidation can be a useful tool for managing high-interest debts and simplifying your finances. However, make sure that your new loan has more favorable terms than your existing debts. Shop around and compare different lenders, as terms, rates, and fees can vary widely.
John Csiszar contributed to the reporting for this article.
Data is accurate as of July 24, 2023, and is subject to change.
This article originally appeared on GOBankingRates.com: 10 Best Debt Consolidation Loans in 2023
