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Article updated on Mar 20, 2024
Debt consolidation loans can save money by lowering your high-interest rates using a personal loan.
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Written by Pallavi Kenkare Pallavi is an editor for CNET Money, covering topics from Gen Z to student loans. She's a graduate of Cornell University and hails from Atlanta, Georgia. When she's not editing, you can find her practicing bookbinding skills or running at a very low speed through the streets of Charlotte.
Edited by Courtney Johnston Senior Editor Courtney Johnston is a senior editor leading the CNET Money team. Passionate about financial literacy and inclusion, she has a decade of experience as a freelance journalist covering policy, financial news, real estate and investing. A New Jersey native, she graduated with an M.A. in English Literature and Professional Writing from the University of Indianapolis, where she also worked as a graduate writing instructor.
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Best rates for those with excellent credit
LightStream
See at LightStream
-
Best for fast funding
Rocket Loans
See at Rocket Loans
-
Best no-fee option
SoFi
See at SoFi
-
Best for consolidating credit-card debt
Happy Money (formerly Payoff)
See at Happy Monday
-
Best for those with limited credit
Upstart
See at Upstart
Best rates for those with excellent credit
Our Experts
Written by Pallavi Kenkare Pallavi is an editor for CNET Money, covering topics from Gen Z to student loans. She's a graduate of Cornell University and hails from Atlanta, Georgia. When she's not editing, you can find her practicing bookbinding skills or running at a very low speed through the streets of Charlotte.
Edited by Courtney Johnston Senior Editor Courtney Johnston is a senior editor leading the CNET Money team. Passionate about financial literacy and inclusion, she has a decade of experience as a freelance journalist covering policy, financial news, real estate and investing. A New Jersey native, she graduated with an M.A. in English Literature and Professional Writing from the University of Indianapolis, where she also worked as a graduate writing instructor.
CNET staff -- not advertisers, partners or business interests -- determine how we review the products and services we cover. If you buy through our links, we may get paid.
Reviews ethics statementWhy You Can Trust CNET Money
Our mission is to help you make informed financial decisions, and we hold ourselves to strict. This post may contain links to products from our partners, which may earn us a commission. Here’s a more detailed explanation of .
Table of Contents
- Best debt consolidation lenders, compared
- FAQs
- Lenders reviewed
- More loan advice
If you have existing credit card, medical or other personal debt, keeping track of payments and getting hit with high-interest charges can be overwhelming.Debt consolidationallows you to combine your debt into a new, lower-interest loan. With the Federal Reserve expected to continue raising interest rates, if you’re considering a debt consolidation loan, now is the best time to lock in a low rate.
A debt consolidation loan combines all your high-interest debt into onepersonal loan, giving you a lump sum you can use to pay off credit cards, medical bills and other debt. By consolidating multiple payments into one fixed monthly payment, a consolidation loan means yourdebts will be easier to manageand you can simplify your repayment plan.
We’ve evaluated major debt consolidation loan providers and highlighted the best options below. We’ll update this list regularly as terms change and new loan products are released. Note that all of the startingannual percentage rates, or APRs, that are listed are based on a highcredit scoreof 800 or above.
LightStream
Best rates for those with excellent credit
See at LightStream
- APR: 7.99% to 23.99%* (with AutoPay). Rates as of Dec. 20, 2022.
- Loan amount: $5,000 to $100,000
- Loan terms:24 to 84 months*
- Time to receive funds:As early as same day (conditions apply)
- Prequalification: No
- Origination fee: No
- Co-signer option: No, only joint applicants
- Debt consolidation for student loans: No
LightStream is an online lender under Truist that offers some of the lowest rates for debt consolidation loans. Its low rates, high loan limits and long loan terms make it a great option for borrowers with excellent credit. LightStream also eliminates fee pitfalls by not charging origination or prepayment fees -- but to lock in its lowest rates, you’ll want to enroll in AutoPay, which will earn you a 0.5% discount.
A caveat is that LightStream doesn’t offer prequalification, which often lets you view possible loan rates before the lender runs a hard credit check. To find out what rate you qualify for with LightStream, the lender will conduct a hard pull on your credit, which could lead to a temporary dip in your credit score.
Rocket Loans
Best for fast funding
See at Rocket Loans
- APR:8.416% to 29.99%
- Loan amount: $2,000 to $45,000
- Loan terms: 36 to 60 months
- Time to receive funds:As early as same day
- Prequalification:Yes
- Origination fee: 1% to 6%
- Co-signer option:No
- Debt consolidation for student loans: No
Rocket Loans is a great option for those seeking same-day funding. It offers prequalification and flexible loan amounts and terms, and boasts zero prepayment penalties. However, it does charge an origination fee of 1% to 6% for each loan. Furthermore, in order to access the best rates, you’ll need to sign up for AutoPay.
SoFi
Best no-fee option
See at SoFi
- APR: 7.99% to 23.43%
- Loan amount: $5,000 to $100,000
- Loan terms: 36 to 84 months
- Time to receive funds: 1 business day after accepting loan
- Prequalification: Yes
- Origination fee: 1% to 8%
- Co-signer option: Yes
- Debt consolidation for student loans: Yes
Social Financing, or SoFi, offers debt consolidation at a low rate without origination, late or prepayment fees. It also offers a 0.25% autopay discount. It’s notable for its special benefits, such as unemployment protection and free financial advising.
SoFi also offers great rates on private student loan debt consolidation (private student loan refinancing), at 3.49% for fixed-rate refinancing and 1.74% for variable-rate refinancing. It holds several promotions and guaranteed rate matches on student loan refinancing, including a $20 promotion on checking your rate on a SoFi student or personal loan refinance.
Happy Money (formerly Payoff)
Best for consolidating credit-card debt
See at Happy Monday
- APR: 8.99% and 29.99%
- Loan amount:$5,000 to $40,000
- Loan terms:24 to 60 months
- Time to receive funds: 2 to 5 business days
- Prequalification:Yes
- Origination fee: 0% to 5%
- Co-signer option: No
- Debt consolidation for student loans: No
The Payoff Loan by Happy Money is designed specifically for borrowers looking to pay off credit card debt. It focuses heavily on financial wellness, offering you access to tools to help track your credit score and build or rebuild your credit. Those with lower credit scores may also qualify, since Happy Money only requires a minimum credit score of 550 to take out a loan. On the downside, Happy Money does change an origination fee between 0% to 5% and its loans aren’t offered in Massachusetts or Nevada.
Upstart
Best for those with limited credit
See at Upstart
- APR: 6.50% to 35.99%
- Loan amount: $1,000 to $50,000
- Loan terms: 36 to 60 months
- Time to receive funds:1 business day after accepting loan
- Prequalification: Yes
- Origination fee: 0% to 8%
- Co-signer option:No
- Debt consolidation for student loans:No
Upstart describes itself as an artificial intelligence lending platform designed to offer higher approval rates and improve consumers’ access to credit. While it does use your credit score to gauge eligibility, it also considers alternative factors, such as job history, to determine if you qualify. While you may be accepted even if you have insufficient credit history or no credit score, proof of a regular source of income is a requirement. It does not charge prepayment penalties.
However, Upstart does charge relatively high origination fees, as well as late payment fees and $10 for every requested paper copy of your loan agreement. West Virginia or Iowa residents are also not eligible for Upstart loans.
Rates as of Jan. 3, 2023.
Best debt consolidation lenders, compared
| LightStream | Rocket Loans | SoFi | Happy Money | Upstart | |
| Best for | Excellent credit | Fast funding | No fees | Consolidating credit card debt | Limited credit |
| APR | 7.99% to 23.99%* (with AutoPay). Rates as of Dec. 20, 2022. | 8.416% to 29.99% | 7.99% to 23.43% | 8.99% to 29.99% | 6.50% to 35.99% |
| Loan amount | $5,000 to $100,000 | $2,000 to $45,000 | $5,000 to $100,000 | $5,000 to $40,000 | $1,000 to $50,000 |
| Term lengths | 24 to 84 months* | 36 to 60 months | 36 to 84 months | 24 to 60 months | 36 to 60 months |
| Time to receive funds | As early as same day (conditions apply) | As early as same day | 1 business day after accepting loan | 2 to 5 business days | 1 business day after accepting loan |
| Prequalification | No | Yes | Yes | Yes | Yes |
| Origination fee | No | 1% to 6% | 1% to 8% | 0% to 5% | 0% to 8% |
| Co-signer option | No, only joint applicants | No | Yes | No | No |
| Debt consolidation for student loans | No | No | Yes | No | No |
FAQs
A debt consolidation loan may save you money. You may pay less interest if you’re approved for a lower rate than your existing debt. For example, if you have $2,500 in total debt with a combined APR of 20% and a combined monthly payment of $125, you’ll pay $566 in interest over about two years. But if you were to take out a debt consolidation loan with an 11% APR and a two-year repayment term, the new monthly payment would be $116.50, and you would save $329 in interest.
Keep in mind that access to lower rates is heavily dependent upon a high credit score.
Student loan debt consolidation is similar to other types of debt consolidation -- borrowers can combine multiple student loans into one for new terms and a potentially lower interest rate.
However, student loan debt consolidation differs depending on whether you have federal loans or private loans. If you have federal loans, consolidation can only occur through theDirect Loanprogram, for a new rate of the weighted average of all your loans, rounded to the nearest eighth.
You cannot consolidate private student loans. However, you canrefinanceyour loans (both private and federal) into one brand-new loan. Keep in mind that debt consolidation is a loan combination, while refinancing is simply changing the terms on a debt obligation.
Many lenders offer the option to prequalify, which allows you to view your payment plan and see what your potential interest rates and monthly payments would look like. Prequalification requires a soft credit pull, allowing lenders to view a limited portion of your credit history. Asoft credit pull will not impact your credit score.
An origination fee is an upfront, one-time fee for processing your loan. It may also be called the administrative or processing fee.
If you don’t have a longstanding credit history, you may need someone with good or excellent credit to co-sign your loan. A co-signer takes on loan responsibility, serving as a guarantor, and is required to make loan payments if you’re unable to. Keep in mind that your loan repayment history will affect your co-signer’s credit score. With a joint-applicant loan, both applicants are held equally responsible for paying the loan back. A co-applicant has more rights and responsibilities than a co-signer.
Lenders reviewed
- Avant
- BestEgg
- Discover
- Freedom Plus
- LightStream
- Marcus by Goldman Sachs
- Payoff
- PenFed
- Peerform
- Prosper
- One Main Financial
- Rocket Loans
- SoFi
- Upstart
More loan advice
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*Your 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 3 years would result in 36 monthly payments of $313.32.
© 2023 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
Written by
Pallavi Kenkare
Read more from Pallavi
Pallavi is an editor for CNET Money, covering topics from Gen Z to student loans. She's a graduate of Cornell University and hails from Atlanta, Georgia. When she's not editing, you can find her practicing bookbinding skills or running at a very low speed through the streets of Charlotte.
