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6 Best Debt Consolidation Loans of January 2020

Steve NicastroDecember 20, 2019

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Debt consolidation loans help borrowers combine multiple high-interest debts into a single payment. Compare our picks for the best loan options for all credit scores.

Summary of Best Debt Consolidation Loans of January 2020

LenderEst. APRMin. Credit ScoreLearn More
Payoff

Payoff

on Payoff's website

5.99 - 24.99%

640

on Payoff's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

on Goldman Sachs's website

6.99 - 28.99%

660

on Goldman Sachs's website

Lightstream

LightStream

on LightStream's website

5.49 - 17.49%

660

on LightStream's website

Upgrade

Upgrade

on Upgrade's website

6.98 - 35.89%

600

on Upgrade's website

Avant

Avant

on Avant's website

9.95 - 35.99%

580

on Avant's website

Discover

Discover® Personal Loans

See my rates

on NerdWallet's secure website

6.99 - 24.99%

660

See my rates

on NerdWallet's secure website

LenderEst. APRMin. Credit ScoreLearn More
Payoff

Payoff

on Payoff's website

5.99 - 24.99%

640

on Payoff's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

on Goldman Sachs's website

6.99 - 28.99%

660

on Goldman Sachs's website

Lightstream

LightStream

on LightStream's website

5.49 - 17.49%

660

on LightStream's website

Upgrade

Upgrade

on Upgrade's website

6.98 - 35.89%

600

on Upgrade's website

Avant

Avant

on Avant's website

9.95 - 35.99%

580

on Avant's website

Discover

Discover® Personal Loans

See my rates

on NerdWallet's secure website

6.99 - 24.99%

660

See my rates

on NerdWallet's secure website

Our pick for

Fair credit and paying off credit card debt

Payoff

on Payoff's website

Payoff

Min. Credit Score

640

Est. APR

5.99 - 24.99%

Loan Amount

$5,000 - $35,000

on Payoff's website


Min. Credit Score

640

Key facts

Payoff, which lends only to people consolidating credit card debt, requires a minimum credit score of 640 and two years of credit history. It offers financial guidance to help you stay on top of loan payments.

Pros

  • Low starting rates.

  • Competitive rates among similar lenders.

  • No late fee.

  • Offers online educational resources.

Cons

  • No co-sign or secured loan option.

  • Does not offer direct payment to creditors with debt consolidation loans.

  • Charges origination fee.

Qualifications

  • Minimum credit score of 640.

  • Minimum credit history: 2 years.

  • Minimum annual income: $40,000.

  • Debt-to-income ratio: less than 50%.

Available Term Lengths

2 to 5 years

Fees

  • Origination fee: 0% - 5%.

Disclaimer

This does not constitute an actual commitment to lend or an offer to extend credit. Upon submitting a loan application, you may be asked to provide additional documents to enable us to verify your income, assets, and financial condition. Your interest rate and terms for which you are approved will be shown to you as part of the online application process. Most applicants will receive a variety of loan offerings to choose from, with varying loan amounts and interest rates. Borrower subject to a loan origination fee, which is deducted from the loan proceeds. Refer to full borrower agreement for all terms, conditions and requirements.

Read Full Review

Our pick for

Good credit and no fees

Marcus by Goldman Sachs

on Goldman Sachs's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

Min. Credit Score

660

Est. APR

6.99 - 28.99%

Loan Amount

$3,500 - $40,000

on Goldman Sachs's website


Min. Credit Score

660

Key facts

Online lender Marcus is an option for borrowers with good to excellent credit (a FICO score of at least 690). Its starting rates are lower than the average rate on credit cards, and it offers direct payment to creditors and flexible repayment options.

Pros

  • No fees.

  • Flexible payment options.

  • Directly pays creditors for debt consolidation loans.

Cons

  • Requires good credit.

  • No co-sign option.

Qualifications

  • At least 18 years old (19 in Alabama; 21 in Mississippi and Puerto Rico).

  • Valid U.S. bank account, Social Security number or tax ID.

  • 660+ credit score.

Available Term Lengths

3 to 6 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36-month loans are generally lower than rates for 72-month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.

Read Full Review

Our pick for

Good credit and low rates

Lightstream

on LightStream's website

LightStream

Lightstream

Min. Credit Score

660

Est. APR

5.49 - 17.49%

Loan Amount

$5,000 - $100,000

on LightStream's website


Min. Credit Score

660

Key facts

LightStream offers no fees and low rates for borrowers with good credit. The lender also allows joint applications, which can increase your chances of qualifying for a debt consolidation loan or get you a lower rate.

Pros

  • No fees.

  • Co-sign option.

  • Low starting rates.

Cons

  • Does not offer pre-qualification on its website.

  • Requires several years of credit history.

Qualifications

  • Minimum credit score of 660.

  • No minimum income specified.

  • Maximum debt-to-income ratio varies depending on loan purpose.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). Rate quote includes AutoPay discount. AutoPay discount is only available when selected prior to loan funding. To obtain a loan, you must complete an application on LightStream.com which, may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $5,000 loan at 12.8% APR with a term of 3 years would result in 36 monthly payments of $168. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. SunTrust now Truist is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank.

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Our pick for

Fair credit and high debt-to-income

Upgrade

on Upgrade's website

Upgrade

Upgrade

Min. Credit Score

600

Est. APR

6.98 - 35.89%

Loan Amount

$1,000 - $50,000

on Upgrade's website


Min. Credit Score

600

Key facts

Upgrade requires a minimum credit score of 620, and some borrowers with high debt-to-income ratios may qualify. It also offers direct payment to creditors, which means it sends your loan proceeds directly to creditors, saving you the effort of paying off each debt.

Pros

  • Credit health tools.

  • Hardship plans.

  • Directly pays creditors for debt consolidation loans used to pay off credit cards.

Cons

  • Origination and late fees.

Qualifications

  • Minimum credit score: 600.

  • Minimum annual income: None, but most applicants earn more than $30,000.

  • Minimum monthly free cash flow: $800.

  • Maximum debt-to-income ratio: 60%.

  • Unavailable to borrowers in: Colorado, Iowa, Maryland, Vermont or West Virginia.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 1.5% - 6%.

Disclaimer

Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at https://www.upgrade.com/lending-partners/. Please refer to Upgrade's Terms of Use and Borrower Agreement for all terms, conditions and requirements.

Read Full Review

Our pick for

Bad credit and fast funding

Avant

on Avant's website

Avant

Min. Credit Score

580

Est. APR

9.95 - 35.99%

Loan Amount

$2,000 - $35,000

on Avant's website


Min. Credit Score

580

Key facts

Consider Avant if you’re consolidating high-interest debts, such as payday loans. It has a low minimum credit score requirement, and you may receive your funds the next day. About half of Avant customers use their loans to consolidate debt.

Pros

  • Low minimum credit score.

  • Refinancing option.

  • No prepayment fee.

Cons

  • No co-sign or secured loan option.

  • Does not offer direct payment to creditors for debt consolidation loans.

Qualifications

  • Minimum credit score of 580.

  • At least $20,000 in gross annual income.

Available Term Lengths

2 to 5 years

Fees

  • Administrative fee: 4.75%.

  • Late fee: $25 (most states).

  • Unsuccessful payment fee: $15 (most states).

Disclaimer

$5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Avant branded credit products are issued by WebBank, member FDIC

Read Full Review

Our pick for

Good credit and flexible payment options

Discover
See my rates

on NerdWallet's secure website

Discover® Personal Loans

Discover

Min. Credit Score

660

Est. APR

6.99 - 24.99%

Loan Amount

$2,500 - $35,000

See my rates

on NerdWallet's secure website


Min. Credit Score

660

Key facts

Discover offers direct payment to creditors and flexible payment options; borrowers can change payment due dates or defer payments. Discover also gives borrowers free access to their FICO credit score.

Pros

  • Free credit score access.

  • No origination fee.

  • Option to directly pay creditors.

  • Flexible payment options.

Cons

  • Charges late fees.

  • No refinancing option.

Qualifications

  • Minimum credit score required: 660; borrowers' average score is about 750.

  • Minimum gross income required: $25,000, but typically much higher.

  • Minimum credit history: Not provided.

  • Maximum debt-to-income ratio: Not provided.

Available Term Lengths

3 to 7 years

Fees

  • Origination fee: None.

  • Late fee: $39.

Disclaimer

This is not a commitment to lend from Discover Personal Loans. Your approval for a loan is determined once you apply and is based on your application information and credit history. Your APR will be between 6.99-24.99% based upon creditworthiness at time of application. Not all applications will be approved.

Read Full Review

Best debt consolidation loans: Factors to compare

Annual percentage rates: The loan's APR represents its true annual cost, as it includes all fees and interest charges. Rates vary based on your credit scores, income and debt-to-income ratio. Use APRs to compare multiple loans. Choose a low rate with monthly payments that fit your budget.

Origination fees: Some lenders charge origination fees to cover the cost of processing your loan. The one-time fee typically ranges from 1% to 8% of the loan amount and is either deducted from your loan proceeds or added to the loan balance. Avoid loans that include this fee to keep costs down, unless the APR is lower than other no-fee loans.

Lender features: Some lenders offer consumer-friendly features like direct payment to creditors, which means the lender pays off your old debts once your loan closes, saving you that task.

Other features to shop for include free credit score monitoring and hardship programs that temporarily reduce or suspend monthly payments if you face a financial setback, such as a job loss.

» MORE: Best credit card consolidation loans

Get the most with a debt consolidation loan

Build your credit: Loan approval is based mainly on your credit score and ability to repay. Borrowers with excellent credit (720 to 850 FICO) have more loan options and may qualify for lower rates, so it can pay to build your credit before seeking a consolidation loan.

Add a co-signer: While co-signing carries some risks, it can help you qualify for a debt consolidation loan that you wouldn’t be able to on your own due to poor credit or low income.

Estimate your savings: Use a debt consolidation calculator to estimate your interest savings and new monthly payment, and to compare various loan options.

Shop around: Compare rates and terms at multiple lenders before applying for a debt consolidation loan. Most online lenders let you pre-qualify with a soft credit inquiry, which has no impact on your credit scores.

Plan ahead: Before your loan is funded, create a budget that allocates a percentage of your income toward debt repayment and track your repayment progress with a budgeting and saving app.

Curb spending: Avoid big expenditures on your credit cards as you pay off debt, but don’t close any of the cards. Canceling credit accounts can hurt your credit score.

» MORE: 4 keys to successful debt consolidation

How to pre-qualify for a personal loan

Pre-qualifying for an online loan can get you access to potential loan terms, including the loan’s interest rate. You can pre-qualify with multiple lenders on NerdWallet to compare offers and find the lowest rate.

Last updated on December 20, 2019

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Best Debt Consolidation Loans of January 2020