Compare 4 best debt consolidation loans by credit score | finder.com

Compare debt consolidation loans

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Simplify your debt payments into one with lower costs and better terms.

The path you walk to get out of debt can be smooth as glass for some. But for many of us, it includes bumps, twists and turns. Tools exist to help you navigate your journey, designed to help you realize your plan to financial freedom while keeping more of your money in your pocket.

A debt consolidation loan is one strategy to get a handle on your existing financial obligations. You can potentially gather your open balances in one place, minimize your countdown to paying them off in full and possibly shake off high interest rates. It all comes down to whether it’s right for your specific circumstances.

Prosper Personal Loans

Prosper

You could borrow up to $40,000 for a variety of purposes, with rates starting from 6.95%.

  • Recommended Credit Score: 640 or higher
  • Minimum Loan Amount: $2,000
  • Maximum Loan Amount: $40,000
  • Loan Term: 3 or 5 years
  • Turnaround Time: 1-3 business days
  • Simple online application process
  • No prepayment penalties

    How does consolidating debt with a personal loan work?

    A personal loan can help you roll your existing debt into one new fixed monthly bill. The goal is that your new loan offers a lower interest rate than you’re currently paying on other loans.

    To take advantage of a debt consolidation loan, you apply for a personal loan and select “debt consolidation” as the purpose on your application. The lender transfers your approved funds to your bank account, which you then use to pay off open credit balances, medical bills — even other loans. For consolidating student loans, the lender will likely send the money directly to your creditor.

    After paying off your debts, you’re left with one loan to repay at the fixed rate and repayment terms you signed up for with your new lender.

    Compare debt consolidation loans

    Rates last updated September 22nd, 2018

    Reveal your potential loan offers and rates

    Answer two quick questions to filter the loan offers and get the best one for you.

    Select your credit score range

    I don't know my credit score

    Finally, select where you live.

    To get your credit score:

    Experian logo

    Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    Credible Personal Loans
    Get personalized rates in minutes and then choose a loan offer from several top online lenders.
    Good to excellent credit
    $50,000
    4.99%–36% (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit score.
    580
    $100,000
    3.09%–35.99% (fixed)
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    580
    $100,000
    4.99%–35.99% (fixed)
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    6.16%–35.89% (fixed)
    SoFi Personal Loan Fixed Rate (with Autopay)
    No fees. Multiple member perks such as community events and career coaching.
    680
    $100,000
    6.990% – 14.865% (fixed)
    Payoff Personal Loans
    Pay down your debt with a fixed APR and predictable monthly payments.
    640
    $35,000
    5.99%–24.99% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34%–155% (Varies by state) (fixed)
    Best Egg Personal Loans
    A prime lender with multiple repayment methods.
    640 FICO®
    $35,000
    5.99%–29.99% (fixed)
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    640
    $35,000
    4.99%–29.99% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)

    Compare up to 4 providers

    Calculate how much you could save

    Use the debt consolidation calculator below to see estimates of how much you could save and what your monthly payment could be.

    Debt Consolidation Savings Calculator

    Calculate how much you could save by consolidating your debt

    Your current balance(s)
    1) Debt amount Interest rate
    $
    %
    2) Debt amount Interest rate
    $
    %
    3) Debt amount Interest rate
    $
    %
    Total monthly payments
    $
    Add another balance
    New loan terms
    Loan length in years
    Years

    Fill out the form and click “Calculate” to see your estimated savings and new monthly payment.

    or

    Compare debt consolidation loans now

    You’ll save an estimate of !

    Before Consolidation After Consolidation
    Balance $ $
    Interest rate % 9%
    Year(s) to pay off ~
    Monthly payment $ $
    Total interest paid
    Total balance paid

    You currently have a total debt balance of $ with an average rate of %. By consolidating them into a new loan at 9% APR with a -year term, you’d pay approximately $ per month. Your estimated total savings would be .

    Your total monthly payments is not enough to cover the interest. Your loan(s) will never be paid off.

    Compare debt consolidation loans now

    4 best debt consolidation loans by credit score

    SoFi logo

    Excellent credit of 740+: SoFi

    Loans from SoFi come with an APR discount when you sign up for AutoPay. You’ll get access to exclusive community events and credit counseling. It costs nothing to apply, and you’ll pay absolutely no fees.

    SoFi requires good to excellent credit, but you can check if you prequalify online without it affecting your credit score.

    • Loan amounts. $5,000 to $100,000
    • APR range. 6.990% – 14.865%
    • Loan terms. 3–7 years

    Prosper logo

    Good credit of 670+: Prosper

    Prosper is a peer-to-peer lender that’s dedicated to transparency. It has a clear minimum credit score of 640, and it uses TransUnion to retrieve your score.

    A personal loan from Prosper comes with an origination fee of 1% to 5%, depending on your credit profile. Conditional approval can come through in as little as one business day.

    • Loan amounts. $2,000 to $40,000
    • APR range. 6.95%–35.99%
    • Loan terms. 3 or 5 years

    Monevo logo

    Fair credit of 580+: Monevo

    Monevo is a free service that connects you with several loan offers based on your credit and criteria — all with one application. It requires a minimum credit score of 580 to qualify.

    Its service is free, and your credit score isn’t affected until you apply for a loan through a direct lender in its network. You can also view a list of its partners online before signing up.

    • Loan amounts. $1,000 to $100,000
    • APR range. 3.09%–35.99%
    • Loan terms. 6 to 144 months

    OneMain logo

    Low credit below 580: OneMain

    OneMain can work with those who don’t have the best of credit. Among its benefits is the possibility of receiving your loan the same day, as long as you’re approved by noon. You can also apply with a cosigner. OneMain requires that you visit a branch location to complete the loan process.

    • Loan amounts. 1500 (subject to state minimum size restrictions) to $30,000
    • APR range. 16.05%–35.99%*
    • Loan terms. Typically from 24 to 60 months

    *Annual percentage rate (APR) of 18.49% represents APR for top 10% of loans booked in January 2017 through March 2017. Maximum APR is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan.


    How we picked the top debt consolidation loans

    We chose the providers based on criteria that’s most important to borrowers when choosing a lender. The four providers above also offer perks that set them apart from other providers within the credit score ranges they serve.

    We evaluated product details that include:

    • APR. Interest rates and origination fees directly affect how much you can save by consolidating over time.
    • Loan amounts. Rolling together your open balances is part of the appeal of debt consolidation, which makes high potential loans more valuable.
    • Fees. Origination fees, early repayment penalties, late and returned payment fees — they can eat away at how much you can get out of a consolidation loan.
    • Borrower reviews. Reviews can help you evaluate a provider’s marketing against real-life customer experiences, providing insight into what you can expect.
    • Availability. Lenders with solid reviews, loan amounts, APRs and fees aren’t that useful if they don’t provide loans in your state.

    4 questions to ask when comparing offers

    You can find the right debt consolidation loan for your financial circumstances by comparing the features of multiple lenders, narrowing down your options with the questions below.

    • Do I qualify with this lender?
      People with good or excellent credit scores tend to more easily qualify for personal loans with competitive rates. You’ll likely need to meet eligibility that includes a low debt-to-income ratio, a minimum annual income and a minimum length of credit history.
    • What’s the repayment term?
      Because the goal of a debt consolidation loan is to make it your only remaining debt, your loan term represents when you’re ultimately free of your debts. It’s exciting to circle the exact date of your financial freedom on a calendar, even if it’s three to five years down the road.But how long you take to repay your loan also affects your monthly payment. A longer term generally results in lower monthly payments but higher interest over the life of your loan.
    • What’s the APR?
      Lenders charge a percentage of your loan balance as interest in exchange for allowing you to borrow money. They commonly advertise an APR, which includes interest and mandatory fees.The APR is a better representation of your total loan cost than your interest rate alone. Even a seemingly small difference in percentage can significantly affect the total interest you pay, especially if you’re borrowing a large amount. Look for a low-interest personal loan when comparing your options.
    • What other fees might I be charged?
      Outside of your APR, you could face a range of fees. Some lenders even charge you extra for paying off your loan early. Read the terms and conditions of any loan contract before signing, looking out for penalty fees on late or missed payments.

    How much will a debt consolidation loan cost me?

    Ideally, a debt consolidation loan won’t cost you anything you weren’t already going to pay in interest with your existing loans. While some debt consolidation loans come with origination fees — usually 1% to 5% of your loan amount that’s often deducted before you receive the money — it’s possible to find a consolidation loan offering no upfront fees.

    When weighing consolidation loans, your APR and monthly repayments are two other costs to heed. Typically, you need to have excellent credit and a low debt-to-income ratio to qualify for the lowest APRs that range from 5% to 10%.

    You might be concerned about immediate costs, however. In that case, a loan with a longer loan term could meet your needs. You’ll end up paying more in the end, because your interest accumulates over a longer term. But your monthly repayments can be significantly lower than with a shorter term.

    5 tips to get a low interest rate

    Watch the video above or read the list below for ways to get a better rate when consolidating your debt with a loan.

    1. Shop around. And don’t just look at local banks. Online lenders can offer lower rates, faster application processing and even peer-to-peer lending.
    2. Know your credit score and review your credit report. Generally, you need a credit score of 680 or higher to get the best deal on a loan. Check your credit report to make sure there aren’t errors that are hurting your credit score and getting in your way.
    3. Pay down your debt. Try to keep your debt-to-income ratio under 20% to get the best rates and terms.
    4. Get preapproved. Preapproval allows you to see how much you can borrow and approximate your interest rate before committing to an offer. It’s also a good way to make sure you meet a lender’s eligibility requirements.
    5. Apply only for what you need. Asking for more than you need can land you with a higher APR.

    Pros and cons of using a debt consolidation loan

    Pros

    • One payment. Pulling together all of your balances into one place can relieve the hassle that comes with managing multiple monthly repayments.
    • Potential overall savings. When you consolidate to a loan with a lower APR, you can save money on unnecessary interest across multiple loans.
    • Earlier payoff. Depending on your term and APR, you might find that you’re able to pay off your overall debt more quickly than by keeping them separate.

    Cons

    • No intro period. Unlike balance transfer credit cards, these loans don’t offer low or 0% interest intro periods.
    • Temptation to spend. With your credit cards and general cash flow freed up, you could be tempted to shop, thereby extending your debt.
    • Does not eliminate debt. By consolidating your debt, you’re simply shifting existing balances to a new form — albeit one that can save you money and time.

    Balance transfer credit card vs. debt consolidation loan

    Balance transfer credit cards can offer exciting perks, like 0% interest for a year or more on transferred balances. But you face a high revert APR if you’re not able to pay off your debt within the intro period.

    Here’s how balance transfer credit cards compare to debt consolidation loans.

    Balance transfer credit card Debt consolidation loan
    APR Low or no interest on transferred debt within an intro period, and typically 15.99% to 25.99% thereafter. As low as 3% APR throughout your full loan term.
    Payoff time Intro periods can range from 1 to 2 years, after which your APR reverts to a higher purchase rate. Generally 3 to 7 years.
    Fees Typically 3% to 5% of each transferred balance. Typically no upfront fees, though lenders may charge origination fees of 1% to 5% of the loan amount.
    Impact on credit score Short-term drop in score due to hard pull on credit. Potential increase in credit score over time if you keep your other cards open to maintain low credit utilization. Short-term drop in score due to hard pull on credit. Likely to increase credit score in the long run, because other credit balances are paid off with the loan.

    Bottom line

    A balance transfer credit card could be a suitable way to consolidate debt if you’re certain you’ll pay off your consolidated balance within a year. If you need more time, a debt consolidation loan could be a better deal because the interest rate is lower.

    Keep in mind that getting a balance transfer credit card will add another account to your credit utilization ratio, so you’ll want to consider the limit you’re approved for. On the other hand, debt consolidation loans won’t be added to your credit utilization ratio.

    Deeper dive into balance transfers vs. debt consolidation loans

    Russell consolidates to save his budget

    Imagine this scenario: Russell is carrying two credit cards — one that he’s nearly maxed out to pay emergency bills and another filled with general spending — along with a year-old medical bill that wasn’t covered by his insurance. With a new job and a determination to get his debt under control, Russell looks into a debt consolidation loan.
    Original credit accounts
    Credit card 1Credit card 2Medical billTotal
    APR22.8%15.2%5%
    Balance$5,000$2,000$600$7,600
    Monthly payments$280$100$10$390
    Total interest$1,349.51$320.92$91.87$1,762.30

    Consolidated debt

    After consolidation
    APR9%
    Balance$7,600
    Monthly payment$241.68
    Total interest$1,100.40

    Russell saves $661.90 by consolidating his debt to a three-year term personal loan offering fixed 9% APR.

    Bottom line

    You’re on the right track to strong financial health by doing your research. A personal loan could help you consolidate multiple debts into one monthly repayment — potentially one with better rates or shorter terms than you’re paying now. Consider comparing multiple lenders to find one that works best for your financial situation.

    If you’d like to learn more about how to manage your debt, check out our guide on tips to manage five different types of debt. Or browse our debt consolidation guide for a comparison of other solutions like debt settlement companies.

    Frequently asked questions

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