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Loans

The best debt consolidation loans for anyone with fair to excellent credit

CNBC Select looked at fees, interest rates and flexible repayment options for different credit scores to find the best debt consolidation loans.

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Credit card debt is common, and sometimes we end up over our heads before we even realize it.

The average credit card debt was $6,501 in, according to Experian data. And while that number has declined over the last few years, even debt in the low four figures can cost you a lot in interest when you only make the minimum payment.

If you're stuck in a no-win situation with credit card debt you can't afford to pay off, a personal loan for debt consolidation might be your ticket out. Debt consolidation also helps people with multiple student loans lump them into one loan, ideally with a lower interest rate.

Using a personal loan for debt consolidation helps you avoid getting overwhelmed by too many bills and different due dates since those payments would be streamlined into one monthly bill.

When looking for the right debt consolidation loan, you'll want to ensure you get the best interest rate and that the repayment plan works within your budget. To help narrow your search, CNBC Select rounded up the top personal loans for debt consolidation, looking at fees, interest rates and flexible repayment options for different credit scores. (Read more about our methodology below.)

Best debt consolidation loans

Best for student loan consolidation

SoFi Personal Loans

  • Annual Percentage Rate (APR)

    8.99% - 29.49% when you sign up for autopay

  • Loan purpose

    Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses

  • Loan amounts

    $5,000 to $100,000

  • Terms

    24 to 84 months

  • Credit needed

    Good to excellent

  • Origination fee

    No fees required

  • Early payoff penalty

    None

  • Late fee

    None

Terms apply.

Pros

  • No origination fees required, no early payoff fees, no late fees
  • Unemployment protection if you lose your job
  • DACA recipients can apply with a creditworthy co-borrower who is a U.S. citizen/permanent resident by calling 877-936-2269
  • Can have more than one SoFi loan at a time (state-permitting) 
  • May accept offer of employment (to start within the next 90 days) as proof of income
  • Co-applicants may apply

Cons

  • Applicants who are U.S. visa holders must have more than two years remaining on visa to be eligible
  • No co-signers allowed (co-applicants only)

Fixed rates from 8.99% APR to 29.49% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.

Who's this for? SoFi allows you to consolidate and refinance both federal and private student loans to get new rates and terms. Note, however, that refinancing federal student loans disqualifies you from federal repayment programs, including PSLF and income-driven repayment plans, so it's best to consider this decision carefully.

Standout benefits: SoFi charges no origination fees, no prepayment penalty fees and no late fees. Plus, SoFi membership comes with numerous perks, such as referral bonuses, rate discounts, financial planning, access to travel offers and an unemployment protection program that allows you to temporarily modify your loan payments.

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Best for people without a credit history

Upstart Personal Loans

  • Annual Percentage Rate (APR)

    7.8% - 35.99%

  • Loan purpose

    Debt consolidation, credit card refinancing, wedding, moving or medical

  • Loan amounts

    $1,000 to $50,000

  • Terms

    36 and 60 months

  • Credit needed

    Credit score of 300 on at least one credit report (but will accept applicants whose credit history is so insufficient they don't have a credit score)

  • Origination fee

    0% to 12% of the target amount

  • Early payoff penalty

    None

  • Late fee

    The greater of 5% of last amount due or $15, whichever is greater

Terms apply.

Pros

  • Open to borrowers with fair credit (minimum 300 score)
  • Will accept applicants who have insufficient credit history and don't have a credit score
  • No early payoff fees
  • 99% of personal loan funds are sent the next business day after completing required paperwork before 5 p.m. Monday through Friday

Cons

  • High late fees
  • Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before it's delivered to you)
  • $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
  • Must have a Social Security number

Who's this for? Upstart can be a good choice if you're new to credit since it works with applicants with no credit score. When reviewing applications, it considers factors beyond your credit, including your education history and work experience.

Standout benefits: You can receive the funds as soon as the next business day. Additionally, you can pay off your consolidation loan early at any time without penalty fees.

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Best for low credit scores

Achieve® Personal Loans

  • Annual Percentage Rate (APR)

    8.99% to 35.99%

  • Loan purpose

    Debt consolidation, major purchase

  • Loan amounts

    $5,000 to $50,000

  • Terms

    24 and 60 months

  • Credit needed

    620 or higher

  • Origination fee

    1.99% to 6.99%

  • Early payoff penalty

    None

  • Late fee

    See terms

Terms apply.

Pros

  • Flexible term lengths
  • Rate discounts available
  • Works with borrowers with fair credit

Cons

  • Loans may not be available in all states
  • The lender charges origination fees

Who's this for? Achieve can be a great option even for borrowers with imperfect credit. You only need a FICO score of 620 for a chance to qualify. Note, however, that a low score may translate into a higher interest rate.

Standout benefits: Achieve offers several rate discounts, as well as flexible terms and payment dates. The lender charges no prepayment penalty fees.

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Best for flexible repayment terms

Upgrade Personal Loans

  • Annual Percentage Rate (APR)

    8.49% - 35.99%

  • Loan purpose

    Debt consolidation/refinancing, home improvement, major purchase

  • Loan amounts

    $1,000 to $50,000

  • Terms

     24 to 84* months

  • Credit needed

    Fair, good to excellent

  • Origination fee

    1.85% to 9.99%, deducted from loan proceeds

  • Early payoff penalty

    None

  • Late fee

    Up to $10 (with 15-day grace period)

Terms apply.

Pros

  • No early payoff fees
  • Loans up to $50,000
  • Fixed interest rates (no surprises)
  • Can pay creditors directly (may take up to two weeks)
  • Fast funding in as little as four days

Cons

  • Origination fee of up to 8% (deducted from your loan)
  • Not available in Washington D.C.

Why Upgrade is the best for financial literacy:

  • Free credit score simulator to help you visualize how different scenarios and actions may impact your credit
  • Charts that track your trends and credit health over time, helping you understand how certain financial choices affect your credit score
  • Ability to sign up for free credit monitoring and weekly VantageScore updates

Who's this for? Upgrade is ideal for those who want to customize their debt consolidation loan. With multiple loan options, you can select a monthly payment that best fits your budget and pick a term that works for you.

Standout benefits: You can receive funds in one business day after accepting a loan offer and can opt to send the funds straight to your creditors. Upgrade also charges no early payoff fees.

[ Jump to details ]

Best for staying motivated

Happy Money

  • Annual Percentage Rate (APR)

    11.72% - 17.99%

  • Loan purpose

    Debt consolidation/refinancing

  • Loan amounts

    $5,000 to $40,000

  • Terms

    24 to 60 months

  • Credit needed

    Fair/average, good

  • Origination fee

    0% to 5% (based on credit score and application)

  • Early payoff penalty

    None

  • Late fee

    5% of monthly payment amount or $15, whichever is greater (with 15-day grace period)

Terms apply.

Pros

  • Peer-to-peer lending platform makes it easy to check multiple offers
  • Loan approval comes with Happy Money membership and customer support
  • No early payoff fees
  • No late fees
  • Fast and easy application
  • U.S.-based customer service

Cons

  • Higher loan minimums ($5,000)
  • Must submit soft inquiry to see origination fees and other details

How Payoff is designed to help you stay motivated:

  • Offers borrowers a dedicated "Empowerment Science" team that is available to take questions and provide encouragement
  • Free personality tests, stress assessments and cash flow trackers to help borrowers understand their money management style and nail down better habits
  • Free FICO tools help members track their progress*

*Based on a study of Happy Money Members between February 2020 to August 2020, members who use a Happy Money Loan to eliminate at least $5,000 of credit card balances reportedly see an average FICO Score boost of 40 points. (Results may vary and are not guaranteed.)

Who's this for? If you need extra motivation to pay off your debts, Happy Money can give you a boost by making it easy to track your progress. Through the online Member Portal and Happy Money mobile app, you can monitor payments, track your progress and contact the support team if you need any help.

Standout benefits: Happy Money's application process is quick and simple, and you can choose your terms, pay-off date and monthly payment. The lender lets you decide whether you want the money deposited into your account or sent to your credit card issuer directly.

[ Jump to details ]

Best for good to excellent credit

LightStream Personal Loans

  • Annual Percentage Rate (APR)

    7.49% - 25.99%* APR with AutoPay

  • Loan purpose

    Debt consolidation, home improvement, auto financing, medical expenses, and others

  • Loan amounts

    $5,000 to $100,000

  • Terms

    24 to 144 months* dependent on loan purpose

  • Credit needed

    Good

  • Origination fee

    None

  • Early payoff penalty

    None

  • Late fee

    None

Terms apply. *AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Excellent credit required for lowest rate. Rates vary by loan purpose.

Pros

  • Same-day funding available through ACH or wire transfer (conditions apply)
  • Loan amounts up to $100,000
  • No origination fees, no early payoff fees, no late fees
  • LightStream plants a tree for every loan

Cons

  • Requires several years of credit history
  • No option to pay your creditors directly
  • Not available for student loans or business loans
  • No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)

Who's this for? LightStream can be an excellent choice for those with strong credit. The lender offers highly competitive rates and a high limit on how much you can borrow. Plus, LightStream advertises a Rate Beat Program which helps ensure you get the best rate when shopping for a debt consolidation loan.

Standout benefits: The application process allows you to choose a funding date and repayment terms that work for you. LightStream can approve and fund your loan as soon as the day you apply. There are no pre-payment penalties.

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Best for joint applicants

Prosper Personal Loans

  • Annual Percentage Rate (APR)

    7.95% to 35.99%

  • Loan purpose

    Debt consolidation/refinancing, home improvement, auto/motor, medical or dental, big purchase and more

  • Loan amounts

    $2,000 to $50,000

  • Terms

    24, 36, 48, and 60 months

  • Credit needed

    Good

  • Origination fee

     2.41% to 5%, deducted from loan proceeds

  • Early payoff penalty

    None

  • Late fee

    5% of monthly payment amount or $15, whichever is greater (with 15-day grace period)

Terms apply.

Pros

  • Co-borrowers are permitted
  • Repeat borrowers may qualify for APR discounts
  • Option to change your payment date according to when works best for you
  • Wide range of loan amounts
  • No prepayment penalty

Cons

  • High late fees
  • Origination fee of 2.41% to 5.99%, deducted from loan proceeds

Who's this for? Prosper allows for joint applications, so if you're applying with a co-borrower who has strong credit, this lender is worth looking into. Doing so may help you improve your approval odds and qualify for better terms.

Standout benefits: You get to choose the length of your loan to customize the monthly payment and rate. Funds can be available as soon as in one business day. Prosper charges no prepayment penalties.

[ Jump to details ]

More on our top debt consolidation loans

SoFi

SoFi is an online lender known for competitive interest rates and flexible loan terms. It offers a wide range of lending products, from private student loans to mortgages, savings accounts and more. You can check your rate before applying with no impact on your credit.

Eligible types of debt

Student loans, credit card debt, personal loans and more

Loan amounts

$5,000 to $100,000

Loan terms

2 to 7 years (up to 20 years with student loan refinancing)

[ Return to summary ]

Upstart

Upstart is an AI lending platform that partners with financial institutions to offer lending products, such as personal loans, car refinancing, home equity lines of credit and more. The lender allows you to check your interest rate before you apply with a soft credit inquiry.

Eligible types of debt

Credit cards, gas cards, payday loans, title loans and more

Loan amounts

$1,000 to $50,000

Loan terms

3 to 5 years

[ Return to summary ]

Achieve

Achieve is an online lender providing various solutions to help borrowers get out of debt. It also offers personal loans and home equity loans.

Eligible types of debt

Qualifying unsecured debt

Loan amounts

 $5,000 to $50,000

Loan terms

2 to 5 years

[ Return to summary ]

Upgrade

Upgrade is a fintech company that aims to provide affordable financial products, including personal loans, credit cards, savings and checking accounts, and credit monitoring. You can view your rate without impacting your credit score.

Eligible types of debt

Credit cards and personal loans

Loan amounts

$1,000 to $50,000

Loan terms

2 to 7 years

[ Return to summary ]

Happy Money

Happy Money is a lending platform that partners with credit unions and other community-centered financial institutions. Currently, it offers one product, The Payoff Loan, that allows borrowers to consolidate credit card debt. The lender allows you to check your rate without impacting your credit score.

Eligible types of debt

Credit cards

Loan amounts

$5,000 to $40,000

Loan terms

2 to 5 years

[ Return to summary ]

LightStream

LightStream is an online lender that provides loans to borrowers with good credit, including personal loans, auto loans, debt consolidation loans and others.

Eligible types of debt

Credit card debt, auto loans, personal loans, medical costs and more

Loan amounts

$5,000 to $100,000

Loan terms

2 to 12 years

[ Return to summary ]

Prosper

Prosper is a peer-to-peer lending marketplace that offers a range of financial products. These include personal loans, home equity loans and lines of credit, business loans and a credit card. The lender lets you check your rate without a hard credit pull.

Eligible types of debt

Credit card debt

Loan amounts

$2,000 to $50,000

Loan terms

2 to 5 years

[ Return to summary ]

How do you apply for a debt consolidation loan?

To apply for a debt consolidation loan, first consider how much of a loan you need to apply for. This can be done by adding up the debt balances you wish to consolidate. Once you start browsing for lenders, make sure their minimum loan amount and funding range align with how much money you're looking to borrow. For instance, if you need to borrow $1,000 and the lender's minimum loan amount starts at $3,000, you won't be approved for such a small loan.

You'll also want to double-check any minimum credit score requirements. This lets you avoid taking a hit to your credit score only to not be approved for the loan. Keep in mind that you can consider credit unions, an online lender or even an in-person bank. You should also make sure you're aware of any fees, including application fees, a late payment fee, prepayment penalties and more.

Some lenders also let you submit information to see what rates you may prequalify for without damaging your credit score. You can also compare rates this way to make sure you're applying for a loan with some of the lowest rates available to you. Keep in mind that personal loans are a form of unsecured debt, which means you can't use collateral to secure the loan in case you default.

Once you decide which lender you want to go with, you'll submit an application with complete details. Once you're approved for the loan, your lender will use the funds to make a direct payment to each of your creditors — you'll just be responsible for repaying the personal loan.

How do you manage loan payments?

Before you even submit a loan application, you should make sure you have a debt management plan in place. Consider factors like the loan amount, the loan rates, and the life of the loan (also called the loan term). Make sure the monthly payments are within your budget since on-time payments are crucial for avoiding a poor credit score, as well as being approved for the best loan rates in the future.

Also, make sure you're able to manage your personal loan payments alongside any other debt payments you already have.

FAQs

A debt consolidation loan is a personal loan that's used to pay off existing debt across other accounts, including credit cards, student loans and other installment loans.

Consolidating your debt into a personal loan can have a positive impact on your credit score and overall finances, but it's important to understand the process so you can ensure the greatest benefit.

Debt consolidation loans deliver cash directly to your creditor or your bank account, which you then use to pay off your existing debt. Within 30 days, you'll start making a fixed monthly payment on the new loan until all of the debt is paid off.

With a lower APR, debt consolidation loans can shave off some interest charges and save on high-interest debt. People who use them successfully can save money when they stick to their new, simplified payoff plan and stop using their old credit cards to rack up new debt.

You can keep your credit cards open after you take out a debt consolation loan, but it's best to use them only to pay for what you know you can afford to pay off at the end of each month.

Bottom line

A debt consolidation loan can help you save on repaying high-interest debt — and make it more manageable. Make sure to compare rates from different lenders to pick the best deal for you. And stay disciplined when consolidating. It can be tempting to rack up new balances once the old ones are paid off, but such behavior can easily put you into more debt.

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Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best personal loans for consolidating debt.

Catch up on CNBC Select's in-depth coverage of credit cardsbanking and money, and follow us on TikTokFacebookInstagram and Twitter to stay up to date.

Our methodology

To determine which personal loans are the best for consolidating debt, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions. When possible we chose loans with no origination or sign-up fees, but we also included options for borrowers with lower credit scores on this list. Some of those options have origination fees.

When narrowing down and ranking the best personal loans, we focused on the following features:

  • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
  • Flexible minimum and maximum loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to pay back your loan.
  • No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
  • Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
  • Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
  • Fund disbursement: The loans on our list deliver funds promptly through either electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
  • Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
  • Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $1,000 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

Note that the rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

*Your LightStream loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 7.99% APR with a term of three years would result in 36 monthly payments of $313.32.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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