Debt consolidation loans are an effective way to manage multiple debts by combining them into a single loan with a potentially lower interest rate and simplified monthly payments. If you have high-interest credit card debt, medical bills, or personal loans, consolidating them can help streamline your finances and save on interest. In this guide, we’ll cover the best personal loans for debt consolidation, along with their key features, pros, and cons.
SoFi
SoFi is a top choice for debt consolidation loans due to its low-interest rates, high loan amounts, and lack of fees. SoFi offers loans with no origination fees, prepayment penalties, or late fees, making it one of the most borrower-friendly options.
- Loan Amounts: $5,000 to $100,000
- Interest Rates: 8.99% to 23.43% APR (with AutoPay)
- Loan Terms: 2 to 7 years
- Fees: No origination fees, no prepayment penalties
SoFi is an excellent choice for borrowers with good to excellent credit who want to consolidate high-interest debts. In addition to competitive rates, SoFi also offers unemployment protection, allowing borrowers to pause payments temporarily if they lose their job.
Marcus by Goldman Sachs
Marcus by Goldman Sachs offers personal loans specifically designed for debt consolidation, with no fees and flexible payment options. Marcus allows borrowers to choose their monthly payment date, providing added flexibility for those managing multiple debts.
- Loan Amounts: $3,500 to $40,000
- Interest Rates: 6.99% to 24.99% APR
- Loan Terms: 3 to 6 years
- Fees: No origination fees, no prepayment penalties
Marcus is a great option for borrowers with strong credit who want a loan with flexible repayment options. The lack of fees and transparent terms make it one of the most straightforward debt consolidation loan providers.
Discover Personal Loans
Discover offers personal loans that are ideal for debt consolidation, with the added benefit of direct payments to creditors. This feature simplifies the process of paying off your existing debts, as Discover handles the payments directly for you.
- Loan Amounts: $2,500 to $35,000
- Interest Rates: 6.99% to 24.99% APR
- Loan Terms: 3 to 7 years
- Fees: No origination fees, no prepayment penalties
Discover is an excellent choice for borrowers who want a hassle-free debt consolidation experience, as their direct payment to creditors removes a step from the consolidation process.
LightStream
LightStream, a division of SunTrust Bank, offers competitive personal loan rates for debt consolidation, with interest rates starting at the lower end of the spectrum. LightStream is known for providing loans to borrowers with excellent credit, and they offer a “Rate Beat” program that promises to beat any competing lender’s rate by 0.10%.
- Loan Amounts: $5,000 to $100,000
- Interest Rates: 8.99% to 25.49% APR (with AutoPay)
- Loan Terms: 2 to 12 years
- Fees: No origination fees, no prepayment penalties
LightStream is ideal for borrowers with excellent credit who want the best possible interest rates for consolidating large amounts of debt. Their longer loan terms also provide greater flexibility for repayment.
Payoff
Payoff specializes in loans for credit card debt consolidation. They offer tools and resources to help borrowers manage their credit and improve their financial health. Payoff’s loans are designed to help individuals consolidate and pay off high-interest credit card debt, with personalized rates based on individual financial profiles.
- Loan Amounts: $5,000 to $40,000
- Interest Rates: 8.99% to 29.99% APR
- Loan Terms: 2 to 5 years
- Fees: Origination fee of 0% to 5%
Payoff is a good option for borrowers with fair to good credit who are primarily focused on consolidating credit card debt. The platform offers credit monitoring tools and access to financial coaching, making it more than just a loan provider.
LendingClub
LendingClub is a peer-to-peer lender that offers personal loans for debt consolidation. Borrowers can use LendingClub to pay off high-interest debt and manage their repayments through a single monthly payment. LendingClub allows you to apply for joint loans, which can help you qualify for better terms if you have a co-borrower with strong credit.
- Loan Amounts: $1,000 to $40,000
- Interest Rates: 8.05% to 35.89% APR
- Loan Terms: 3 to 5 years
- Fees: Origination fees of 2% to 6%
LendingClub is ideal for borrowers who want to consolidate their debt but may not have the strongest credit. The ability to apply with a co-borrower can increase the likelihood of approval and help secure better interest rates.
Conclusion
Choosing the right personal loan for debt consolidation can help you streamline your finances and reduce your overall interest payments. Options like SoFi, Marcus by Goldman Sachs, and Discover offer no-fee loans with competitive rates, making them ideal for borrowers with strong credit. For those who may not have excellent credit, Payoff and LendingClub provide more accessible solutions, while still offering tools and resources to manage your debt. Before applying, be sure to compare interest rates, fees, and loan terms to find the best fit for your financial situation.