Debt consolidation loans allow consumers to simplify their debts and save money by paying off existing higher-interest balances and making a single payment to the new lender at a lower interest rate. With many companies claiming they can consolidate your debt, consumers may find it challenging to find a company that can deliver fairly and impartially. We choseDiscoveras our top pick among the best debt consolidation loans of 2024 after analyzing 70 personal loan lenders across 31 different data points. The popular credit card issuer and bank offers competitive interest rates, lengthy loan repayment terms, and a smaller minimum loan amount, which are key factors people looking for a debt consolidation loan should consider. All of the lenders on our list pay creditors directly, which is a convenience for borrowers, and offers some risk reduction for lenders. Several other lenders stood out for various reasons, whether they offer competitive loans for fair credit, provide a lowAnnual Percentage Rate(APR), or offer other advantages. If youre not seeing anything in the results that are a good fit for your needs, consider warranties from these companies: APR Range Recommended Minimum Credit Score 660 This lender does not disclose its minimum credit score requirements. Loan Amount APR With Autopay Discount Recommended Minimum Credit Score Not Disclosed This lender does not disclose its minimum credit score requirements. Loan Amount APR Range Recommended Minimum Credit Score Not Disclosed This lender does not disclose its minimum credit score requirements. Loan Amount APR With Autopay Discount Recommended Minimum Credit Score 620 This lender does not disclose its minimum credit score requirements. Loan Amount APR Range Recommended Minimum Credit Score Not Disclosed This lender does not disclose its minimum credit score requirements. Loan Amount APR With Autopay Discount Recommended Minimum Credit Score Not Disclosed This lender does not disclose its minimum credit score requirements. Loan Amount APR Range Recommended Minimum Credit Score 660 This lender does not disclose its minimum credit score requirements. Loan Amount Why Trust Us 70 Lenders reviewed 31 Loan features considered 1,680 Data points analyzed 173 Primary data sources used Investopedia collected key data points from several lenders to identify the most important factors to borrowers. We used this data to review each lender for fees, accessibility, repayment terms, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right borrowing decision for their needs. Read our Full Methodology As of Q1 2024, total consumer debt in the U.S. has risen to $5.06 trillion, comprised of $3.72 trillion of non-revolving debt and $1.34 trillion of revolving debt. Best Debt Consolidation Loans for June 2024 Best Debt Consolidation Loans for June 2024 The Bottom Line How to Choose How Do I Get a Debt Consolidation Loan? Frequently Asked Questions (FAQs) Methodology Why You Should Trust Us Learn More About Debt Consolidation Loans Investopedia's Rating 4.5 Why We Chose It A Discover personal loan is an excellent choice for debt consolidation (as long as you aren't using it to pay off your loan balance on a Discover credit card), or most other loan uses for that matter. It funds quickly with a next-business-day deposit into your bank account if everything goes smoothly. And its potentially low-interest rates, with zero origination fees, make it easier to pay back. Discover was ranked as the third-best personal loan option for customer service in 2023 by J.D. Power. Discover is currently headquartered in the Chicago suburb of Riverwoods, Illinois, and was started in 1985 as a division of Sears Roebuck & Company. It launched its iconic Discover Card in 1986 with no annual fee and the card industry's first cash-back program. The downside of a Discover personal loan is that you can only apply as a solo applicant, although you can use your household income on your application. That means a partner or other family member can help you out when it comes to determining your debt-to-income ratio, an important lending consideration. You can’t apply with a co-signer, or co-borrower, or use collateral for a Discover loan, however, and that means you’ll need to qualify on your own credit merits. Pros & Cons Pros Low APR Excellent customer satisfaction ratings Long repayment terms Cons Only accepts individual applications Can’t use collateral for a secured loan Can’t consolidate debt from a Discover credit card Qualifications Read the FullDiscover Personal Loans Review 2024 Investopedia's Rating 4.8 Why We Chose It SoFi ranks high on our list of the best debt consolidation loans thanks to its high loan maximum amounts—and its flexible repayment terms, competitive APRs, and fast funding time. It also offers several interest rate discounts, including a 0.25% discount for setting up autopay and 0.25% for direct deposit. SoFi is based in San Francisco, CA., has been in business since 2011, and has approximately 4,200 employees. Pros & Cons Pros APR discounts Same-day funding Creditor-direct pay Cons Optional origination fees High minimum loan amount Qualifications Read the FullSoFi Personal Loans Review 2024 Investopedia's Rating 3.6 Why We Chose It Reach Financial specializes in debt consolidation loans. You can’t use its loans for any other purposes. Aside from that, Reach stands out from other lenders due to its very low starting APR. Well-qualified borrowers can get a rate as low as 5.99%, whereas many other lenders have APRs starting around 8% or higher. Reach also doesn’t have a minimum credit score requirement. On the downside, it charges origination fees and APRs can go up to 35.99%.Reach Financial is based in New York, NY, and was founded in 2015. To date, Reach Financial has helped consolidate over $1B in personal loan debt. Pros & Cons Pros Low starting APR Free monthly credit score No minimum credit score Cons High minimum loan amount High maximum APR Strict loan use rules Steep origination fees Qualifications Read the FullReach Financial Personal Loans Review 2024 Investopedia's Rating 4.6 Why We Chose It Upgrade offers a wide range of loan amounts and loan terms that can suit borrowers in a variety of situations. While the APR maximum rate is on the high end, the lender doesn’t have a high minimum credit score requirement, which can be helpful for borrowers with bad credit. Upgrade also allows borrowers to apply with a joint applicant and, in some cases, pledge their cars as collateral, both of which are options that may help you land a larger loan or better rate. Upgrade is based in San Francisco, CA. Upgrade, Inc. is an American neobank (an online bank with no physical branches) founded in 2016. It has made over $10 billion in loans since its launch in 2017. Pros & Cons Pros Joint applicants allowed $200 bonus Creditor-direct pay Cons Steep origination fees Limited security options High max APR Qualifications Read the FullUpgrade Personal Loans Review 2024 Investopedia's Rating 4.5 Why We Chose It NASA Federal Credit Union offers debt consolidation loans with terms of up to 84 months. Having a wide range of loan terms to choose from can be helpful because it gives you more control over your monthly loan payment and total costs. If you need a lower payment, you can opt for a longer term, and vice versa. While you do have to be a credit union member to take advantage of this type of loan product, anyone can join. If you don’t qualify for membership otherwise, NASA Federal Credit Union will comp you with a one-year membership to the National Space Society (NSS), which gives you full credit union benefits. Nasa Federal Credit Union is based in Upper Marlboro, MD. Founded in 1949, NASA Federal Credit Union is a member-owned financial institution originally established to provide financial services for employees of the National Aeronautical and Space Administration (NASA) but has since grown to include employees of 900 member organizations. Pros & Cons Pros Wide range of loan terms No fees Small loans available Cons Loan benefits apply to members only No discounts available Lower maximum loan limits Qualifications Read the FullNASA Federal Credit Union Personal Loans Review 2024 Investopedia's Rating 4.7 Why We Chose It Citibank, a large traditional bank with roots dating back to 1812, wins the spot as the best big bank that provides debt consolidation loans. It has a very competitive APR range; doesn’t charge origination fees, late fees, or prepayment penalties; and offers a variety of APR discounts. This can be a great option if you need a loan under $30,000 and qualify without a co-signer.Citibank's headquarters are in New York, NY and they have over 240,000 employees and operates in 21 states. Pros & Cons Pros No fees APR discounts Creditor-direct pay Cons No co-applicants Low maximum loan amount Qualifications Read the FullCitibank Personal Loans Review for 2024 Investopedia's Rating 4.6 Why We Chose It First Tech Federal Credit Union is an ideal credit union for debt consolidation due to its flexible credit standards providing credit to borrowers with scores as low as 660, while offering a low maximum APR of 18%. In comparison, most lenders that approve borrowers in this credit score range have maximum APRs of 35% or more. First Tech also offers a wide range of loan amounts and loan terms. Further, you can defer your first payment for up to 45 days and get payment protection for the loan. On the downside, you won’t be able to apply with a co-signer and you will need to become a credit union member before you can get a loan. First Tech Federal Credit Union is based in Palo Alto, CA. Founded in 1952, First Tech serves the financial needs of the leading technology companies and their employees. Pros & Cons Pros No fees Optional payment protection Deferred first payment Cons Membership required No APR discounts No co-signers Qualifications Read the FullFirst Tech Federal Credit Union Personal Loans Review 2024 APR Range Average Origination Fee Late Fee Time to Receive Loan Loan Amount Latest Repayment Reset All Hide, not for me Hide, not for me Hide, not for me Hide, not for me Hide, not for me Hide, not for me Hide, not for me *APR ranges for some companies include a discount for automatic payments or existing bank customers. When it comes to debt consolidation loans, there’s no shortage of options. However, some will be better than others for your situation. For example, loans above $50,000 can be hard to find, but SoFi offers loans up to $100,000. If you want a long loan term of 84 months, you can apply with NASA Federal Credit Union, First Tech Federal Credit Union, or Upgrade. Further, if you’d like a competitive APR and prefer to borrow from a big bank, you can apply with Citibank. The right fit will depend not only on what the lender offers but on your needs and preferences. Now that we’ve covered the best debt consolidation loans, here are some other factors to consider to help you decide if getting a debt consolidation loan is right for you. Debt consolidation is using one loan or credit card to pay off multiple debt accounts. It’s often done to reduce the overall cost of repaying a debt, streamline debt repayments, and/or get immediate financial relief by reducing the cost of monthly debt payments. Debt consolidation is the most popular reason for getting a personal loan, according to the 2023 Investopedia personal loan consumer survey. Home improvements and large purchases were the next two most common reasons cited for seeking a loan. Debt consolidation loans are obtained through application by borrowers and typically have a fixed dollar amount and fixed interest rate for a set period of time unless the borrower uses a balance transfer credit card, which usually has a variable interest rate and a revolving credit line. Once approved the lender can directly pay off other creditor balances or simply deposit the loan proceeds in the borrower's checking account to allow them to pay their other higher-interest accounts off. Once existing higher-interest accounts are paid off the borrower begins paying toward the single debt consolidation loan. Getting pre-qualified for a debt consolidation loan only takes a few minutes and won’t impact your credit score. It doesn’t hurt to review a few loan quotes to see if they’ll benefit you. Pros Consolidate multiple debt payments into a single monthly payment Lower your APRs and save money on the overall cost of debt repayment Potentially eliminate debt faster Switch to a fixed repayment schedule Improve credit scores by paying down debt faster and reducing revolving credit utilization Cons Borrowers with poor credit may not qualify for better terms than their current debt Fees and interest can make consolidation loans costly Stretching out debt repayment can lead to paying more over time You risk going into deeper debt You can find debt consolidation loans from a variety of lenders including credit unions, banks, and online lenders. The best lender for you is going to depend on what you can qualify for and your preferences. Lenders vary in their eligibility requirements, customer service quality, loan offerings, and more, so it’s best to shop around and compare quotes. If you’re not sure which lender to choose, here are the main factors to consider as you compare quotes: In addition to weighing the above factors, be sure to calculate the overall cost of the new loan and compare it to the overall remaining cost of your existing loan. Ideally, the new loan will save you money each month and overall. As of Q1 2024, total consumer debt in the U.S. has risen to $5.06 trillion, comprised of $3.72 trillion of non-revolving debt and $1.34 trillion of revolving debt. Average personal loan rates have been steadily trending upward since October of 2023. The average personal loan interest rate is currently 24.44%. The average personal loan rate breached the 23% level for the first time on Dec. 11, 2023. If you're struggling with debt, a debt consolidation loan can be a good option. However, if you have poor credit and don't believe you could qualify or would prefer to not go through the loan process, you could also try: You can also take out a home equity loan or a loan against your 401(k), but consider the consequences first. If you default, your home will be at risk. And any funds you withdraw from your 401(k) will not be earning interest for your retirement. Paying off higher-interest-rate debts with a debt consolidation loan can be a smart financial move if it allows the outstanding debt to be paid off sooner and at a lower cost. Some debt consolidation options like 0% APR balance transfer credit cards can allow a full year or more of no interest on transferred debt which can be a great opportunity to pay down high-interest debt. Applying for and opening a new personal loan for debt consolidation can cause a short-term drop in your credit scores due to the hard inquiry and new account. However paying off credit cards can lower your credit utilization ratio and reduce the number of accounts with balances, which helps to improve your scores. Making on-time monthly debt payments will also help boost your credit scores over time. Debt consolidation refers to paying off multiple existing debts, usually with a single new loan. A balance transfer, on the other hand, is a feature that allows for consolidating credit card debt and other debt; it refers to moving a balance from one account (of any kind) to a credit card. You can transfer just one balance, or, depending on the card issuer, multiple balances—just like debt consolidation. Credit card balance transfers may require an upfront fee, often 3% to 5% of the total amount you transfer. You'll also pay interest charges each month on the balance you carry unless you use a balance transfer card with a promotional 0% APR (this can be a great way to pay off debt). By comparison, a debt consolidation loan doesn’t involve a transfer fee but will come with interest charges and may involve other fees, like an origination fee. Yes, it’s possible to pay off multiple debts with a credit card and consolidate them into one balance. For example, a balance transfer card with a high enough credit limit may allow you to transfer multiple balances over to the card. Applying for and getting loan approval for a debt consolidation can be a good idea for a few reasons. For example, if your credit score has improved since you took on your current debt, or if you have a co-signer or joint applicant, you may qualify for a loan with a lower APR. Personal loans are most commonly used for debt consolidation, in part because consolidating with a lower APR can mean lowering your borrowing costs and monthly payments. If you can afford to pay off your credit card balances it is almost always a better idea to do that rather than to take out a debt consolidation loan simply because once your debt is paid off you won't incur any more interest payments. While debt consolidation loans typically carry lower interest rates than high-interest credit cards they still come at a cost. Debt consolidation costs depend on the type of loan involved. When consolidating debt through a balance transfer credit card offer the cost can be as low as $0 and 0% APR for a period of time, like 12 months or more. Many card issuers charge a balance transfer fee, though, of 3-5% of the balance transferred. Debt consolidation loans usually come with a fixed interest rate but can also involve loan origination fees in some instances based on the amount of the loan. Even though there can be costs associated with debt consolidation, there is typically savings involved compared to the interest costs of the existing debts being consolidated. To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more. To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas: Learn more about how we evaluated personal loans in our complete methodology. Investopedia collected 31 key data points from 70 companies from Aug. 4-23, 2023 to identify the most important factors for readers choosing a debt consolidation lender. We used this data to review each company for rates, fees, loan amounts, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best debt consolidation companies since 2019. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Federal Reserve Board: "Consumer Credit Outstanding" J.D. Power. "Fintech Lenders Gain Traction as Consumer Loan Satisfaction Increases, J.D. Power Finds." NASA Federal Credit Union. “Who Is Eligible?” First Tech Federal Credit Union. “Become a Member.” FICO. "Credit Checks: What Are Credit Inquiries and How Do They Affect Your FICO® Score?” MyFico. “What Is Payment History?” FICO. "What Is Amounts Owed?” National Credit Union Administration. "Paying Off Credit Cards.” Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Federal Reserve Board: "Consumer Credit Outstanding" J.D. Power. "Fintech Lenders Gain Traction as Consumer Loan Satisfaction Increases, J.D. Power Finds." NASA Federal Credit Union. “Who Is Eligible?” First Tech Federal Credit Union. “Become a Member.” FICO. "Credit Checks: What Are Credit Inquiries and How Do They Affect Your FICO® Score?” MyFico. “What Is Payment History?” FICO. "What Is Amounts Owed?” National Credit Union Administration. "Paying Off Credit Cards.” Related Terms What Is Debt Consolidation and When Is It a Good Idea? Debt consolidation is combining several loans into one new loan, often with a lower interest rate. It can reduce your borrowing costs but also has some pitfalls. more Private Party Auto Loan: What It Is, How It Works, How to Get One A private party auto loan is a type of loan that you can use to finance the purchase of a car from an individual. Many financial institutions offer these loans, including banks, credit unions, and online lenders. more What Is a Business Auto Loan? How to Finance Company Vehicles A business auto loan is a type of secured loan that companies or individual owners can use to purchase vehicles for business purposes. It can be less expensive than an unsecured loan, and its interest costs may be tax-deductible. more Emergency Loan: Types, Eligibility, Pros and Cons Emergency loans are a type of personal loan that provides fast access to cash. Learn how emergency loans work and about their pros and cons. more Pre-Approval: Definition, Meaning, How It Works, and Types A pre-approval is a preliminary evaluation of a potential borrower by a lender to determine whether they can be given a pre-qualification offer. more What Is a Debt Relief Program? A debt relief program is a method for managing and paying off debt. It includes strategies specific to the type and amount of debt involved. Learn how it works. moreBest Debt Consolidation Loans for June 2024
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Company APR Credit Score est. Loan Amount More Details Best Overall See DetailsCheck Rates Best for Large Loans See DetailsCheck Rates Best for Low Interest Rates See DetailsCheck Rates Best for Bad Credit See DetailsCheck Rates Best for Repayment Terms See DetailsCheck Rates Best Big Bank See DetailsCheck Rates Best Credit Union See DetailsCheck Rates In the News
Best Overall :Discover
Best for Large Loans :SoFi
Best for Low Interest Rates :Reach Financial
Best for Bad Credit :Upgrade
Best for Repayment Terms :NASA Federal Credit Union
Best Big Bank :Citibank
Best Credit Union :First Tech Federal Credit Union
Compare the Best Debt Consolidation Loans for June 2024
Best For Discover Best Overall 7.99% - 24.99% 0.00% $39.00 1 day $2,500 - $40,000 84 months Check Rates SoFi Best for Large Loans 8.99% - 29.49% 0.00% $0.00 0 days $5,000 - $100,000 84 months Check Rates Reach Financial Best for Low Interest Rates 5.99% - 35.99% 0.00% - 5.00% $15.00 1 day $3,500 - $40,000 60 months Check Rates Upgrade Best for Bad Credit 8.49% - 35.99% 1.85%–9.99% $10.00 1 day $1,000 - $50,000 84 months Check Rates NASA Federal Credit Union Best for Repayment Terms 10.09% - 18.00% 0.00% $25 0 days $1,000 - $30,000 84 months Check Rates Citibank Best Big Bank 11.49% - 20.49% 0.00% $0.00 0 days $2,000 - $30,000 60 months Check Rates First Tech Federal Credit Union Best Credit Union 8.94% - 18.00% 0.00% $15.00 - $25.00 0 days $500 - $50,000 84 months Check Rates The Bottom Line
Guide to Choosing the Best Debt Consolidation Loan
What Is a Debt Consolidation Loan?
How Do Debt Consolidation Loans Work?
Pros & Cons of Getting a Loan for Debt Consolidation
Where to Get a Debt Consolidation Loan
How to Compare Debt Consolidation Loan Lenders
In the News
How Do I Get a Debt Consolidation Loan?
In the News
Average Personal Loan Rates by Lender Lender Average APR Average Loan Term (Months) Average Loan Amount Achieve 23.72% 42 $31,975 Avant 27.32% 41 $16,406 Best Egg 23.02% 47.1 $17,643 Citibank 13.23% 37.4 $20,346 LendingClub 15.39% 43.8 $21,179 LendingPoint 26.49% 43.8 $14,850 LightStream 12.36% 65.9 $28,992 Mariner Finance 30.72% 31.9 $6,106 OneMain 30.55% 44.8 $9,002 Prosper 25.40% 47.1 $16,342 Reach Financial 23.35% 42.1 $18,041 Reprise 30.41% 45.3 $7,183 SoFi 14.63% 50.8 $31,457 Upgrade 22.76% 47.4 $19,270 Upstart 28.07% 51.5 $10,113 Zable 23.13% 41.3 $7,201 All Lenders 24.44% 48.9 $15,005 Alternatives to a Debt Consolidation Loan
Frequently Asked Questions
Is Debt Consolidation a Good Idea?
Do Consolidation Loans Hurt Your Credit Score?
What's Difference Between Debt Consolidation and a Balance Transfer Credit Card?
Can I Consolidate Debt With a Credit Card?
Should You Apply For a Personal Loan to Consolidate Your Debt?
Is it Better to Pay Off Credit Cards or Get a Debt Consolidation Loan?
How Much Does Debt Consolidation Cost?
Companies We Reviewed
We researched and reviewed 70 companies to find the best seven lenders you see above on this list. While we write individual reviews for most companies we research, we do not always write reviews for companies we would not recommend. These are the companies we researched, along with links to individual company reviews, to help you learn more before making a decision:Achieve, Affinity Federal Credit Union, Alliant Credit Union,American Express,Avant, Axos Bank, Bankers Healthcare Group,Best Egg,Bethpage Federal Credit Union,Blue Federal Credit Union, boatloan.com,Boeing Employees' Credit Union, CapexMD,Citibank, Connexus Credit Union,Discover, Dividend Finance,ENT Credit Union, Fig Loans,First Tech Federal Credit Union, Future Family, GoodLeap, Greenstate Credit Union,Happy Money, Hiway Credit Union,Lake Michigan Credit Union,Laurel Road,LendingClub,LendingPoint, LendingUSA, Liberty Federal Credit Union,LightStream, Lyon Financial, Mariner, Money Key,Mountain America Credit Union,NASA Federal Credit Union,Navy Federal Credit Union,Netcredit,Old National Bank,OneMain Financial,OppLoans,Patelco Credit Union,PenFed,Personify Financial,PNC Bank,Prosper,Reach Financial,Regions, Reprise,Rocket Loans,Santander, Service Federal Credit Union,SoFi, Southeast Financial, Summit Credit Union, SunPower, Tally,TD Bank,Teachers Federal Credit Union, Trident Funding,Truist,U.S. Bank, Universal Credit,Upgrade,Upstart,USAA, Vantage Recreational Finance,Wells Fargo. How We Picked The Best Debt Consolidation Companies
Why You Should Trust Us
Learn More About Debt Consolidation Loans
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