Debt consolidation

Information verified correct on May 25th, 2017

Want to consolidate your debts and cut your payments? Here are some of the things you need to consider.

Streamlining your bills, managing your finances, reigning in spending and simplifying your finances — it can feel overwhelming but the process could be simpler than you might think. Imagine rolling all your debts into one so you have just one balance to make progress on. If you’re having trouble managing your existing debt, consolidating it could be a good idea, provided you know what the process entails. You have multiple options to choose from and it’s in your best interest to weigh the pros and cons of each.

Prosper Personal Loan

Prosper Personal Loans

You could borrow up to $35,000 for a variety of purposes, with rates starting from 5.99%.

  • Recommended Credit Score: 640 or higher
  • Minimum Loan Amount: $2,000
  • Maximum Loan Amount: $35,000
  • Loan Term: 3 or 5 years
  • Turnaround Time: 1-3 business days
  • Simple online application process
  • No prepayment penalties

    How do I consolidate my debt with a personal loan?

    Taking out a personal loan to consolidate your debt lets you put all of your debt in one place as you work to pay off the loan, often at lower rates. One company, one monthly repayment: no more wondering who to pay first.

    The biggest advantage to a personal loan for consolidating your debts is saving on interest. If you have several credit cards for example, each with an APR of 12% or higher, you’re spending a lot more than you need to. You can save significantly by paying down that debt on personal loan with a 7% interest rate. With a lower interest rate and only one balance to keep track of, it may be easier to wipe out your debt for good.

    How can I find the right option to consolidate my debt?

    Finding the right alternative to consolidate your debt requires you to examine what the loan has to offer when making your comparisons. Consider the following:

    • Eligibility. Some lenders provide debt consolidation loans only to individuals with good or excellent credit scores. Some require that you earn a minimum amount every year to qualify.
    • Interest. All types of debt balances attract interest, which lenders commonly advertise as annual percentage rate (APR). Bear in mind that even a seemingly small difference in percentage can have a significant effect of the total interest payable, especially if you’re borrowing a large sum.
    • Fees. Prepare to pay fees in different forms. Examples include loan establishment fees, late fees and prepayment penalties.
    • Loan term. How long you take to repay your loan dictates how much you pay as interest. While a longer loan term would have lower payments, it would also have you paying more interest.

    What kinds of debt can you consolidate?

    Make sure that when you’re applying for a personal loan that they APR is not higher than what you’re already paying. The interest rate is where you will see the savings. People generally consolidate these kinds of debts:

    • Credit card debt. Having multiple credit cards requires that you keep track of making timely payments towards each, which can be cumbersome. Many credit cards also charge noticeably high APRs.
    • Personal loans. If you have multiple personal loans you can think about bringing them under a single umbrella. Depending on your existing financial situation and creditworthiness you may qualify for a more competitive interest rate.
    • Private student loans. While consolidation of federal student loans is not possible, students can consolidate private education loans.

    Personal loans you can consider for debt consolidation

    Rates last updated May 25th, 2017
    Unfortunately, none of the personal loan providers have a loan for that credit score. It you are urgent need of a small loan, you might want to check out a short term loan.
    Minimum Credit Score Max. Loan Amount APR Requirements
    Prosper Personal Loan
    Borrow only what you need for debt consolidation, home improvements, special occasions and more — with APRs based on your credit score.
    640 $35,000 From 5.99% (fixed) You are over 18 years of age, you are an American citizen or a permanent resident of the US, and you don’t have bad credit history. Go to site More
    Lending Club Personal Loan
    Borrow up to $40,000 with rates from 5.99% to 35.89% APR based on your credit score.
    660 $40,000 From 5.99% (fixed) You must be over 18 years of age, a permanent resident of the US or an American citizen and have a steady source of income. Go to site More
    Upstart Personal Loans
    This newer service looks beyond your credit score to match you with accredited investors for low-rate personal loans.
    660 $50,000 From 7.16% (fixed) 18+. US citizen or permanent resident. 660 credit score or higher. Go to site More
    NetCredit Personal Loan
    You could borrow up to $10,000 and get an interest rate personalized to your credit score
    550 $10,000 From 34% (variable) Varies based upon state of application Go to site More
    SoFi Personal Loan Fixed Rate (with Autopay)
    Borrow up to $100,000 with a competitive APR and no fees.
    Good to excellent credit $100,000 From 5.49% (fixed) You must be a U.S. citizen or permanent resident 18 years or older. Go to site More
    OneMain Financial Personal Loans
    Get funded quickly with a term loan that works for your circumstances — even with bad or no credit.
    600 $25,000 From 12.99% (fixed) Eligibility for a loan is determined by your financial history, credit history, income and expenses, and whether or not you have ever filed for bankruptcy. More
    Avant — Personal Loan
    Check your rate — without affecting your credit score — before applying for this unsecured personal loan.
    600 $35,000 From 9.95% (fixed) You must have at least a fair credit score of 580 or more), provide proof of a steady income and be a US resident who is at least 18 years old. More

    Have we missed anything in the comparison table? Tell us

    • If the provider quotes a different rate to the one above please let us know

    Personal loan lender matching services

    These matching services connect consumers with personal loan lenders. It is important to note that these services do not make credit decisions and they are not lenders, loan brokers or agents for any lender or loan broker. They can help link you up with a lender that might be able to help you access a loan.

    Rates last updated May 25th, 2017
    Unfortunately, none of the personal loan providers have a loan for that credit score. It you are urgent need of a small loan, you might want to check out a short term loan.
    Minimum Credit Score Max. Loan Amount APR Requirements
    LendingTree Personal Loan
    Apply with this online marketplace for loans to consolidate debt, buy a car, pay for a special occasion and more.
    639 $35,000 From 5.99% (variable) You must be an American citizen or a permanent resident of the US, You must be at least 18 years of age and You should have a regular source of income Go to site More
    PersonalLoans.com
    An online loan matching service that connects you with lenders for peer-to-peer, personal and bank loans for a variety of purposes.
    Varies by lender $35,000 From 5.99% (variable) You must be employed, 18+ with a bank account. Go to site More
    Zippyloan Personal Loans
    This broker matches applicants to lenders offering $100 to $15,000, often with flexible repayment options.
    $15,000 From (variable) Good credit, a steady income and manageable debt. Go to site More

    Have we missed anything in the comparison table? Tell us

    • If the provider quotes a different rate to the one above please let us know

    open field flag debt consolidation

    Is there anything to consider before applying?

    Some people who opt for debt consolidation don’t have solid plans in place on how they will repay, and many still don’t pay enough attention to saving. If you’re consolidating your debt it’s important that you pay close attention to the new credit you’re accumulating. You should try to formulate and stick to a budget. If you’re paying lower payments, figure out if it’s because of a lower interest rate or an extended loan term. If you’re making smaller payments on account of a longer loan term, remember that you’ll end up paying more in interest.

    What other options do I have for debt consolidation?

    The best type of debt consolidation option depends on the kind of debt you have and how much you owe. Your primary alternatives include:

    • Credit card balance transfer. If you have existing credit card debt that attracts high interest you can look at getting a credit card that comes with a promotional balance transfer offer. These cards charge little to no interest on balance transfers for introductory periods, letting you consolidate credit card debt easily.
    • Secured loans and lines. There are lenders that let you borrow against the equity you’ve built in your home, the value of your car or certificate of deposit. By getting a secured loan you can get a lower interest rate. The downside is you risk losing your asset if you cannot repay the loan in the timely manner.
    • Student loans. Students cannot consolidate their federal loans with other debts, which include private school loans. However, you can work on consolidating private education loans with other types of debt. You can do this during the six months grace period after you graduate or after your loan gets to the payment stage.

    Have more questions about consolidating your debt?

    This refers to negotiating with a lender to reduce the balance you owe. After the settlement, the lender would render your debt as paid in full.
    Some lenders provide debt consolidation loans to individuals with less than perfect credit. In these cases, the APR you qualify for may not be as low as for someone with better credit.
    No. You can transfer your existing debts only to new loans that you take in your own name.
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    US Personal Loans Offers

    Learn about our information service
    Lending Club Personal Loan

    Borrow up to $40,000 with rates from 5.99% to 35.89% APR based on your credit score.

    Prosper Personal Loan

    Borrow only what you need for debt consolidation, home improvements, special occasions and more — with APRs based on your credit score.

    Upstart Personal Loans

    This newer service looks beyond your credit score to match you with accredited investors for low-rate personal loans.

    PersonalLoans.com

    An online loan matching service that connects you with lenders for peer-to-peer, personal and bank loans for a variety of purposes.

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