Debt consolidation loans are personal loans designed to help pay down credit cards and other consumer debts. With fixed rates as low as 6.7% APR, these loans can help you save on interest and simplify your finances with a single monthly payment. Debt consolidation can also improve your credit score.
Consolidating your debt may be a good choice if you’re one of the average consumers with three or more active credit cards. But you’ll need good to excellent credit and solid employment to get the most competitive deal.
But if you can qualify for a good rate, debt consolidation may be worth it. The effective federal funds rate — the rate that determines the rate on your credit cards and other loans — is sitting at 3.87% as of November 4, 2025.
50+ personal loan lenders reviewed and rated by our team of experts
6+ types of personal loans analyzed
Evaluated under our unbiased rating system covering 9 categories
20+ years of combined experience covering financial topics
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Discover offers competitive rates, no origination fees and a simple debt consolidation process — earning it our best overall pick. It sends the funds directly to your creditors, or you can have the money sent to your bank account. And there's no origination fee, making it less expensive than some options. Rates start at a relatively low 7.99% APR for borrowers with excellent credit.
It also doesn't charge any late payment fees, unlike much of the competition. But you can't reduce your rate by signing up for autopay, which is a common rate discount that many other lenders offer. It also has a lower maximum loan amount than some lenders, at $40,000, and the minimum credit score to apply is 660.
Min. credit score
660
APR
7.99% to 24.99%
Loan amount
$2,500 to $40,000
Available in all states
Discover offers competitive rates, no origination fees and a simple debt consolidation process — earning it our best overall pick. It sends the funds directly to your creditors, or you can have the money sent to your bank account. And there's no origination fee, making it less expensive than some options. Rates start at a relatively low 7.99% APR for borrowers with excellent credit.
It also doesn't charge any late payment fees, unlike much of the competition. But you can't reduce your rate by signing up for autopay, which is a common rate discount that many other lenders offer. It also has a lower maximum loan amount than some lenders, at $40,000, and the minimum credit score to apply is 660.
Upstart boasts a “holistic” underwriting process, which means it considers more than just your credit score. Your education, work history and current employment all factor into the credit decision, making it a good match for borrowers with limited credit histories — like recent college graduates.
And like many lenders that cater to lower credit, Upstart may charge an origination fee of up to 12% of the loan amount, which it deducts from your funds. This means you'll need to apply for more than you currently owe to cover all your debts. There are also only two repayment terms to choose from — three or five years.
Min. credit score
300
APR
6.7% to 35.99%
Loan amount
$1,000 to $75,000
Not available in: Connecticut, Iowa, Maine, Maryland, Nevada, New York, Oklahoma, Oregon, West Virginia
Upstart boasts a “holistic” underwriting process, which means it considers more than just your credit score. Your education, work history and current employment all factor into the credit decision, making it a good match for borrowers with limited credit histories — like recent college graduates.
And like many lenders that cater to lower credit, Upstart may charge an origination fee of up to 12% of the loan amount, which it deducts from your funds. This means you'll need to apply for more than you currently owe to cover all your debts. There are also only two repayment terms to choose from — three or five years.
OneMain Financial offers one of the only personal loans available for borrowers with poor credit, thanks in part to an option to secure your loan with collateral like a vehicle or camper. Most OneMain Financial borrowers have a rocky credit history but stable employment. It also offers cosigned loans.
Its starting APR is 18% — high for a personal loan, but low compared to payday loans. OneMain also charges origination fees of 1% to 10% or a flat fee of $25 to $500 on your loan. So, if you can't qualify for a rate that's less than the debts you're consolidating, it might not be worth it financially.
Min. credit score
Not specified
APR
18% to 35.99%
Loan amount
$1,500 to $20,000
Not available in: Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont
OneMain Financial offers one of the only personal loans available for borrowers with poor credit, thanks in part to an option to secure your loan with collateral like a vehicle or camper. Most OneMain Financial borrowers have a rocky credit history but stable employment. It also offers cosigned loans.
Its starting APR is 18% — high for a personal loan, but low compared to payday loans. OneMain also charges origination fees of 1% to 10% or a flat fee of $25 to $500 on your loan. So, if you can't qualify for a rate that's less than the debts you're consolidating, it might not be worth it financially.
Pros
Fair and bad credit OK
Unsecured and secured loans
Accepts cosigners
Apply online or at a branch
Cons
High starting rate of 18%
Up to 10% origination fee
Rates up to 35.99%
Loan amount
$1,500 to $20,000
APR
18% to 35.99%
Interest Rate Type
Fixed
Min. credit score
Not specified
Turnaround Time
As soon as one hour
Loan Term
24, 36, 48 or 60 months
* OneMain Disclosures:
Not all applicants will be approved. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). If approved, not all applicants will qualify for larger loan amounts or most favorable loan terms. Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Loan approval and actual loan terms depend on your state of residence and your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). APRs are generally higher on loans not secured by a vehicle. Highly-qualified applicants may be offered higher loan amounts and/or lower APRs than those shown above. OneMain charges origination fees where allowed by law. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $500. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Visit omf.com/loanfees for more information. Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. North Dakota: $2,000. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
Time to Fund Loans: Funding within one hour after closing through SpeedFunds must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after loan closing.
LightStream is a great choice if you want low monthly payments without taking a huge hit on interest. LightStream has some of the most competitive rates available, with no origination fees or prepayment penalties, and an autopay discount of up to 0.5% if you set this up before funding. And it will beat any competitor's rate by 0.1%, as long as the offer meets specific criteria.
But there's no soft-credit-check preapproval process — so expect a hit to your credit score when you apply. It's also one of the most difficult lenders to qualify with, as it only accepts applicants with good or excellent credit.
Min. credit score
Good to excellent credit
APR
6.24% to 24.89%
Loan amount
$5,000 to $100,000
Not available in: Iowa, West Virginia
LightStream is a great choice if you want low monthly payments without taking a huge hit on interest. LightStream has some of the most competitive rates available, with no origination fees or prepayment penalties, and an autopay discount of up to 0.5% if you set this up before funding. And it will beat any competitor's rate by 0.1%, as long as the offer meets specific criteria.
But there's no soft-credit-check preapproval process — so expect a hit to your credit score when you apply. It's also one of the most difficult lenders to qualify with, as it only accepts applicants with good or excellent credit.
Pros
Long loan terms for low payments
No origination fee
High 0.50% autopay discount
Cons
No preapproval process
May need excellent credit to qualify
No customer service phone number
Loan amount
$5,000 to $100,000
APR
6.24% to 24.89%
Interest Rate Type
Fixed
Min. credit score
Good to excellent credit
Turnaround Time
As soon as same day
Loan Term
24 to 240 months
Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Lowest rates require excellent credit. At least 27% of approved applicants applying for the lowest rate qualified for the lowest rate available based on data from 10/01/2024 to 12/31/2024. 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 $25,000 loan at 6.49% APR with a term of 3 years would result in 36 monthly payments of $766.11.
Maximum APR for a LightStream loan is 25.79%. Loan terms range from 24 - 240 months depending on the loan type.
MoneyLion is a free service that connects you with top lenders to find a personal loan tailored to your needs, including debt consolidation. Loans range from $1,000 to $100,000 depending on your credit score, income and other factors. It also claims to help borrowers with less-than-perfect credit gain access to a loan.
However, reviews of the company are mixed, rates can be high if your credit isn't great and loan connection services can lead to excessive solicitation.
Min. credit score
Varies by lender
APR
Varies by lender
Loan amount
$1,000 to $100,000
Not available in: Colorado, Connecticut, New York, Vermont, West Virginia
MoneyLion is a free service that connects you with top lenders to find a personal loan tailored to your needs, including debt consolidation. Loans range from $1,000 to $100,000 depending on your credit score, income and other factors. It also claims to help borrowers with less-than-perfect credit gain access to a loan.
However, reviews of the company are mixed, rates can be high if your credit isn't great and loan connection services can lead to excessive solicitation.
Pros
Compare lenders without affecting your credit score
Best Egg's customer reviews are overwhelmingly positive. Its high Better Business Bureau (BBB) and Trustpilot customer ratings earned it the #1 Consumer's Choice for Personal Loans in 2021 by Best Company. In 2025, it won Best Staff Experience and Best Loan Process at ConsumerAffairs' annual Buyer's Choice Awards.
Aside from its stellar reviews and numerous awards, Best Egg offers a simple online application for debt consolidation loans. But you'll need at least a 640 credit score to be in the running. And unlike lenders like SoFi® and LightStream, it charges an origination fee between 0.99% to 9.99%.
Min. credit score
640
APR
6.99% to 35.99%
Loan amount
$2,000 to $50,000
Not available in: Iowa, Vermont, West Virginia
Best Egg's customer reviews are overwhelmingly positive. Its high Better Business Bureau (BBB) and Trustpilot customer ratings earned it the #1 Consumer's Choice for Personal Loans in 2021 by Best Company. In 2025, it won Best Staff Experience and Best Loan Process at ConsumerAffairs' annual Buyer's Choice Awards.
Aside from its stellar reviews and numerous awards, Best Egg offers a simple online application for debt consolidation loans. But you'll need at least a 640 credit score to be in the running. And unlike lenders like SoFi® and LightStream, it charges an origination fee between 0.99% to 9.99%.
Pros
Positive customer reviews
Award-winning lender
Prequalify with online application
Cons
Up to 9.99% origination fee
Requires a 640 credit score
Not available in three states
Loan amount
$2,000 to $50,000
APR
6.99% to 35.99%
Interest Rate Type
Fixed
Min. credit score
640
Turnaround Time
As soon as the next business day
Loan Term
3 to 5 years
*Trustpilot TrustScore as of April 2025. Best Egg loans are personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender, Column N.A., Member FDIC, Equal Housing Lender, or Blue Ridge Bank, N.A., Member FDIC, Equal Housing Lender. The term, amount, and APR of any loan we offer to you will depend on your credit score, income, debt payment obligations, loan amount, credit history and other factors. Your loan agreement will contain specific terms and conditions. About half of our customers get their money the next day. After successful verification, your money can be deposited in your bank account within 1-3 business days. The timing of available funds upon loan approval may vary depending upon your bank’s policies. Loan amounts range from $2,000– $50,000. Residents of Massachusetts have a minimum loan amount of $6,500 ; Ohio, $5,001; and Georgia, $3,001. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $100,000. Annual Percentage Rates (APRs) range from 6.99%–35.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%– 9.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4-years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR. For example: a 5‐year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3‐year $5,000 loan with 7.99% APR has 36 scheduled monthly payments of $155.12. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents. Best Egg products are not available if you live in Iowa, Vermont, West Virginia, the District of Columbia, or U.S. Territories. TO REPORT A PROBLEM OR COMPLAINT WITH THIS LENDER, YOU MAY WRITE OR CALL– Operations Manager, Email: crt-resolutions@bestegg.com, Address: P.O. Box 42912, Philadelphia, PA 19101, Phone: 1-855-282-6353. This lender is licensed and regulated by the New Mexico Regulation and Licensing Department, Financial Institutions Division, P.O. Box 25101, 2550 Cerrillos Road, Santa Fe, New Mexico 87504. To report any unresolved problems or complaints, contact the division by telephone at (505) 476-4885 or visit the website https://www.rld.nm.gov/financial-institutions/
SoFi is known for its competitive rates and no-fee policy — it doesn't even charge late fees — making it one of the less expensive debt consolidation options in the market. And as a SoFi borrower, you gain access to perks like college financial aid assistance and future rate discounts.
However, SoFi prefers good credit borrowers with credit scores of 680 or higher, and you can't consolidate debt under $5,000. But it has a direct pay option for paying off creditors, meaning SoFi can send funds to creditors on your behalf. It gives you a 0.25% rate discount if you choose this option.
Min. credit score
680
APR
8.99% to 35.49% fixed APR
Loan amount
$5,000 to $100,000
Available in all states
SoFi is known for its competitive rates and no-fee policy — it doesn't even charge late fees — making it one of the less expensive debt consolidation options in the market. And as a SoFi borrower, you gain access to perks like college financial aid assistance and future rate discounts.
However, SoFi prefers good credit borrowers with credit scores of 680 or higher, and you can't consolidate debt under $5,000. But it has a direct pay option for paying off creditors, meaning SoFi can send funds to creditors on your behalf. It gives you a 0.25% rate discount if you choose this option.
Pros
Prequalification available
High loan maximum
Useful perks such as 0.25% discount for paying creditors directly
Cons
$5,000 loan minimum
Requires good credit
High maximum interest rate
Loan amount
$5,000 to $100,000
APR
8.99% to 35.49% fixed APR
Interest Rate Type
Fixed
Min. credit score
680
Turnaround Time
Up to 2 business days
Loan Term
2 to 7 years
Fixed rates from 8.99% APR to 35.49% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or, Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 04/24/25 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. 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 above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plusby paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
Unlike most lenders, Achieve (formerly FreedomPlus) accepts joint applications and offers a rate discount if you apply with another creditworthy person. There's also a discount for debt consolidation loans if Achieve sends at least 85% of the loan's funds directly to your creditors.
You don't need to have great credit to qualify, either: Achieve accepts credit scores as low as 620. It also gets rave customer reviews, has no minimum income requirement and allows for prequalification online. But there's an origination fee of 1.99% to 6.99% — and while it's not the highest we've seen, other lenders may not charge it for good credit borrowers.
Min. credit score
620
APR
8.99% to 29.99%
Loan amount
$5,000 to $50,000
Available in: Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington
Unlike most lenders, Achieve (formerly FreedomPlus) accepts joint applications and offers a rate discount if you apply with another creditworthy person. There's also a discount for debt consolidation loans if Achieve sends at least 85% of the loan's funds directly to your creditors.
You don't need to have great credit to qualify, either: Achieve accepts credit scores as low as 620. It also gets rave customer reviews, has no minimum income requirement and allows for prequalification online. But there's an origination fee of 1.99% to 6.99% — and while it's not the highest we've seen, other lenders may not charge it for good credit borrowers.
Pros
Discounts for joint applicants and debt consolidation
PenFed is one of the largest federal credit unions in the US. And membership is open to everyone with a $5 deposit, whereas many other credit unions have strict requirements on who can join. PenFed offers loans as small as $600 and as high as $50,000 — a range to suit many needs. Most personal lenders have a minimum loan amount of $1,000 or more.
Its rates are capped at a low 17.99%, and it doesn't charge origination fees. But it doesn't disclose its credit or income requirements on its website, it doesn't have branches in all states and third-party reviews say you may need excellent credit to qualify.
Min. credit score
580
APR
7.99% to 17.99%
Loan amount
$600 to $50,000
Available in all states
PenFed is one of the largest federal credit unions in the US. And membership is open to everyone with a $5 deposit, whereas many other credit unions have strict requirements on who can join. PenFed offers loans as small as $600 and as high as $50,000 — a range to suit many needs. Most personal lenders have a minimum loan amount of $1,000 or more.
Its rates are capped at a low 17.99%, and it doesn't charge origination fees. But it doesn't disclose its credit or income requirements on its website, it doesn't have branches in all states and third-party reviews say you may need excellent credit to qualify.
If you have at least 20% equity in your home, you may want to consider a home equity line of credit (HELOC) to consolidate your debt. HELOCs tend to offer lower rates than personal loans, because you're using your home as collateral. You could secure a rate as low as 8.95% APR if you're a current U.S. Bank customer with a credit score of 730 or higher.
These rates include U.S. Bank's relationship 0.05% discount if you open a U.S. Bank personal checking account — many lenders often cap their discounts at 0.25%. But while you won't pay closing costs, you'll pay a $75 annual fee after the first year unless you open a Platinum Checking Package.
Minimum credit score
660
If you have at least 20% equity in your home, you may want to consider a home equity line of credit (HELOC) to consolidate your debt. HELOCs tend to offer lower rates than personal loans, because you're using your home as collateral. You could secure a rate as low as 8.95% APR if you're a current U.S. Bank customer with a credit score of 730 or higher.
These rates include U.S. Bank's relationship 0.05% discount if you open a U.S. Bank personal checking account — many lenders often cap their discounts at 0.25%. But while you won't pay closing costs, you'll pay a $75 annual fee after the first year unless you open a Platinum Checking Package.
Pros
Fixed rate option to lock in your rate
Low maximum rate
Generous relationship discount
No closing costs
Cons
$75 annual fee after first year unless you open a Platinum
Methodology: How we choose the best debt consolidation lenders
Finder’s editorial experts review more than 120 personal loans on the market to narrow down the best for consolidating high-interest credit cards and other debt. For other options, we also looked at providers offering home equity lines of credit, given HELOCs are a common personal loan alternative for debt consolidation.
We weigh each lender across 16 key metrics:
Minimum APR
Maximum APR
Origination fees
Minimum loan amount
Maximum loan amount
Minimum loan term
Maximum loan term
Number of states served
Minimum credit score
Joint application availability
Turnaround time
Online application availability
Prequalification process
BBB ratings
Trustpilot ratings
Other features, such as rate discounts
We update our best picks as lending products change, disappear or emerge in the market. We also regularly review and revise our selections to make sure that our best provider lists reflect the most competitive products available.
Compare debt consolidation providers
Explore your options by costs and requirements. Select the Go to site button for more information about a particular lender.
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How we picked these
What is the Finder Score?
The Finder Score crunches 6+ types of personal loans across 50+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
What is a debt consolidation loan and how does it work?
A debt consolidation loan combines multiple debts into one fixed-rate personal loan with a single monthly payment. It can also refer to refinancing, using a new loan to pay off one credit account.
Key benefits:
Lower interest rate than a credit card. This can help you save money and simplify payments.
Predictable repayments. These loans offer fixed rates with a clear payoff date.
Potential credit score boost. You may improve your credit score by adding a new account type, improving your payment history and lowering your credit utilization.
When applying, have a list of the accounts you want to consolidate and their payoff amounts ready. If approved, your lender will either:
Pay off your creditors directly
Deposit funds into your bank account so you can pay them yourself.
You can consolidate almost any unsecured debt, including credit cards, personal loans, medical bills or short-term loans like payday or installment loans.
Hot tip: You typically can't use a personal loan to consolidate student debt, but you can refinance student loans with a private lender or apply for federal loan consolidation through your servicer.
When debt consolidation makes sense (and when it doesn’t)
Debt consolidation doesn’t reduce the amount of debt you currently owe — but if you qualify for a low rate, it can reduce interest charges and make your monthly budget easier to manage.
Debt consolidation loans can make sense if:
You can qualify for a lower rate than what you’re paying on existing debts.
The debt consolidation loan has a monthly payment you can easily afford.
Your monthly bills are less than 50% of your monthly income.
You want to close accounts but need to pay off balances first.
It will take you two to five years to pay off your existing unsecured debt.
Debt consolidation loans may not be the right move if:
You’ll pay more interest on the debt consolidation loan than if you were to keep your accounts separate.
You have poor credit and can’t qualify for a low interest rate on a personal loan.
You’re at risk of accumulating more debt after you consolidate.
You can pay off your existing unsecured debt in less than a year or two.
How to get a debt consolidation loan
If you have good credit, an unsecured personal loan may be the easiest way to consolidate debt. You could use a credit card or home equity loan, but credit cards typically have higher rates, and home equity loans require owning a home with at least 20% equity.
Here are five steps to getting a personal loan to consolidate your debt:
Get an estimate of your payoff amounts. Contact your creditors for an estimate of how much you’ll need to pay to close the account on the date you plan on consolidating your debt. This will include the balance, interest and any fees associated with account closure.
Check your credit score. Your credit score is very important in your eligibility for an unsecured personal loan. Most lenders require at least 620 to 670 to qualify.
Compare your options. Compare lenders that you’re likely to qualify for and offer the loan amount you need. And if you’re worried about your credit score, check out lenders that consider your income more heavily than your score.
Prequalify for a loan. After you’ve narrowed your options to a few lenders, complete an online form to get a quote on the loan amount, rates and terms you might receive. Prequalification typically involves a soft credit check that doesn’t harm your credit score.
Consolidate your debts. If you’re approved for a loan, the lender ideally can pay your creditors directly. You can usually set a date for when you want your creditors to be paid. After your debts are paid off with the consolidation loan, you repay that loan, typically in monthly installments.
How to compare debt consolidation loans
If you’re consolidating to save money, then the debt consolidation loan’s APR is the most important factor. Your credit score is largely what determines the rates you qualify for.
The majority of lenders offer starting rates around 6% to 8%, but they can get as high as 36%, depending on your credit score, the loan term you select and other factors.
After you find lenders that offer low rates, compare features that include:
Prequalification. Most lenders let you prequalify with a soft credit check to preview rates before a hard inquiry. Gather your payoff amounts, current interest rates and credit score before applying.
Extra fees. Watch for origination fees up to 10% of the loan amount, plus late or prepayment fees. Some lenders, like SoFi and LightStream, offer low or no fees.
Pays creditors directly. Many lenders pay your creditors directly once the funds go through, which is less work for you.
Discounts. Ask about relationship, student or autopay discounts, usually 0.25% to 0.50% each. Some lenders let you stack them for extra savings.
Flexible terms. Shorter terms mean less interest overall but higher monthly payments. Choose lenders that offer multiple options to fit your budget and goals.
Lender’s reputation. Read customer reviews and ratings to gain insight on how a lender handles customer support and how fast grievances are resolved. An overwhelming number of complaints may be a sign to find another lender.
Hardship options and deferments. Some lenders allow payment deferrals during financial hardship. Since personal loans often last two years or more, confirm this before signing.
Debt consolidation loan rates by credit score
Average personal loan APRs for 2025 show that lower-credit borrowers pay APRs that are up to double those of high-credit borrowers, according to statistics from LendingTree user data on closed loans for Q2 2025.
Credit score range
Average APR
720+
15.12%
680–719
23.35%
660–679
27.07%
640–659
29.39%
620–639
30.50%
The most competitive rates for personal loans go to the borrowers with the best credit scores, unsurprisingly.
It may be better to hold off on consolidating your debt if your credit score is below 620, at least until you can take steps to increase your credit score. A higher score will increase your chances of qualifying for favorable rates, especially if your goal with consolidating is to save money on interest charges.
Will debt consolidation hurt my credit score?
Applying for a new loan triggers a hard credit check, which can temporarily lower your score by 5 to 15 points, depending on your current credit.
However, consolidation can boost your credit over time by:
Lowering your credit utilization ratio. When you pay off credit cards, you lower your utilization ratio.
Building a positive payment history. Payment history is the most important factor in your credit score, as long as you make on-time payments.
Most consolidation loans are unsecured personal loans, which appear on your credit report as an active installment account.
Alternatives to a debt consolidation loan
If a personal loan doesn’t quite fit your situation, look to alternatives designed to consolidate your debt:
Balance transfer credit cards. It’s what it sounds like — you move one or more debts onto a single balance transfer credit card with a low or 0% introductory rate to save on interest. But you’ll usually pay a fee of 3% to 5% of the balance.
Home equity products. Own a home with at least 20% equity? You could take on a home equity loan or home equity line of credit (HELOC) to consolidate your debt. Most home equity products are large, low-interest loans.
Cash-out refinance. Typically available for homes with at least 20% equity, a cash-out refi replaces your home’s current mortgage with a new, larger loan. The difference between your old mortgage and the new one is what you get to “cash out” — received as cash.
How much can I save from consolidating debt?
If your debt consolidation loan has a lower rate than the credit accounts you’re currently paying, you could save significant money.
Say you have two credit cards:
One has a $7,000 balance with a 19% APR, and the second has a $3,000 balance with a 26% APR. This works out to $10,000 in debt.
Let’s also say you qualified for a debt consolidation loan of $10,000 with a personal loan rate of 11.23% over a two-year term.
Here’s an estimated breakdown of the cost and time to pay off your debt, depending on how you choose to make payments.
How it works
Balance
Monthly payment
Time to pay off debt
Total interest
Paying the minimum monthly payment
Your lender calculates the minimum payment by adding the outstanding interest to 1% of your credit card balance.
$10,000
$275.83*
298 months
$14,748
Paying fixed monthly payments
You pay the amount you’d pay with a debt consolidation loan toward your credit card each month.
$10,000
$467.15
41 months
$4,498
Paying off a debt consolidation loan
You pay monthly installments toward the loan’s principal and interest.
$10,000
$467.15
24 months
$1,211
*Your minimum payment will gradually decrease as you pay down your credit card debt.
Compared to making minimum monthly payments on your credit card, a debt consolidation loan can save you over $13,000. It also gets you out of debt about 22 years earlier — assuming that you don’t use either of your credit cards during that time.
If you choose to make fixed monthly payments to your credit cards instead, you’ll save around $10,000, but you’ll still pay around $3,000 more than using a consolidation loan.
Lacey Stark is a freelance personal finance writer for Finder, specializing
in banking, loans, investing, estate planning, and more. She has 20
years of experience writing and editing for magazines, newspapers, and
online publications. A word nerd from childhood, Lacey officially got her
start reporting on live sporting events and moved on to cover topics
such as construction, technology, and travel before finding her niche in
personal finance. Originally from New England, she received her
bachelor’s degree from the University of Denver and completed a
postgraduate journalism program at Metropolitan State University also
in Denver. She currently lives in Chicagoland with her dog Chunk and
likes to read and play golf.
See full bio
Compare lenders that offer $5,000 loans for good, fair and bad credit.
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