Here are the 6 Best Personal Loans for Debt Consolidation

Denied for a loan? We may be able to help. Reduce multiple payments into one and lower your monthly payments up to 50%.

See How Much You Can Save

Disclaimer: Credit Summit may be affiliated with some of the companies mentioned in this article. Credit Summit may make money from advertisements, or when you contact a company through our platform.

If you’re struggling to make your payments each month and don’t have enough cash to make it to payday, debt consolidation could be a quick and inexpensive solution.

These six lenders can help you escape your debt trap.

Do you qualify for debt consolidation?

Credit Summit may be able to help.

6 Best Personal Loans for Debt Consolidation

Here are the best personal loan options:


  • APR range: 5.99 to 24.99%
  • Fees: No origination fees
  • Credit requirement: Need a FICO score of 660
  • Prequalification: Pre-approval with a soft credit check. No FICO score is required but the lender considers debt-to-income ratio, credit history, application information, and selected term. Must have a minimum of $25,000 in annual income
  • Loan amounts: $2,500 to $35,000
  • Loan terms: 3 to 7 years
  • Time to funding: Same-day approval in most cases, and loan funds are deposited into a savings or checking account within 1-2 business days after the loan offer is accepted
  • Lending restrictions: Loan funds cannot be used to pay off secured loans or a Discover credit card
  • Other noteworthy features: Customers can select a credit card balance transfer with a promotional interest rate, apply for a personal loan, or use their home equity to consolidate debt. No autopay discount is available; also charges a late payment fee of $39

First Tech Federal Credit Union

  • APR range: 6.70% to 18%
  • Fees: No origination fees, prepayment penalties, or annual fees
  • Credit requirement: A 660 FICO score is needed
  • Prequalification: First Tech requires a minimum credit score of at least 660 to qualify for a personal loan. The lender also looks at other factors outside of credit score
  • Loan amounts: $500 to $50,000
  • Loan terms: 12 to 84 months
  • Time to funding: Sometimes as soon as the same day
  • Lending restrictions: Limited to members of the credit union only. Income requirements are not available.
  • Other noteworthy features: First Tech is a not-for-profit financial institution and is federally insured by the National Credit Union Administration


  • APR range: 5.73% to 19.99% (with autopay)
  • Fees: Doesn’t charge any fees or prepayment penalties on personal loans
  • Credit requirement: Good or excellent FICO credit score of 690 or higher
  • Prequalification: Requires an established credit history, various open accounts such as credit cards and car loans, savings accounts or liquid assets, and a stable and sufficient income
    Loan amounts: Personal loans of up to $100,000
  • Loan terms: 2 to 7 years
  • Time to funding: This lender processes online applications seven days a week until 6 p.m., so you could get your money the same day.
    Other noteworthy features: If the customer is not satisfied with their experience with Lightstream, customer service will email a survey, and after completion, the borrower can receive $100 compensation. With its Rate Beat Program, LightStream claims it will lower your rate by 0.10 percentage points if a competing lender approves you for an unsecured loan with the same terms. Borrowers can choose when to receive their loan funds, with disbursement available on the same day of approval

Marcus by Goldman Sachs

  • APR range: 6.99% to 19.99%
    Fees: For those with a fair credit; it requires a minimum of 660 FICO score, has no fees, and features a mobile app for iOS and Android
  • Credit requirement:  Must have a 660 FICO score
    Prequalification: The lender requires a minimum of a 660 FICO score, employment, and income verification, and personal bank statements. Applications can be completed online or via phone
    Loan amounts: From $3,500 to $40,000
  • Loan terms: 3 to 6 years
    Time to funding: Potential borrowers can obtain customized loan options and pre-approval in less than 10 minutes. Typically, between one and four business days after approval; funds personal loans within five business days after accepting the loan offer
    Lending restrictions: Not suitable for smaller debts
    Other noteworthy features On-Time Payment Reward is a payment deferral option for customers who have made at least 12 on-time consecutive payments. During that deferred month, the loan will not accrue any interest


  • APR range: 6.49% to 21.78%; interest rates on SoFi variable rate personal loans are capped at 14.95%
  • Fees: Doesn’t charge any origination, late payment, or prepayment fees
  • Credit requirement: N/A
    Prequalification: Loan eligibility depends on additional factors, such as a responsible financial history, credit score, monthly income vs. expenses, and professional experience
    Loan amounts: $5,000 to $100,000
  • Loan terms: Fixed Rate; depends on the loan amount, etc.
    Time to funding: Sometimes as quickly as the same day the loan is approved
  • Lending restrictions: U.S. citizens or permanent residents who are employed and/or have sufficient income from other sources with a responsible financial history and a strong monthly cash flow
  • Other noteworthy features: U.S.-regulated broker and offering a high amount of investor protection


  • APR range: 5.35% to 35.99%
    Fees: Upstart does not charge prepayment fees, but it does charge up to an 8% origination fee, either 5% or $25 of past-due amounts (whichever is greater), a $15 returned check fee, and a one-time paper copies fee of $10
    Credit requirement: FICO or Vantage Score of at least 600
  • Prequalification: Pre-approval with a soft credit pull
  • Loan amounts: $1,000 to $500,000
  • Loan terms: 3 to 5 years
  • Time to funding: Most loans are funded the next business day after approval
  • Lending restrictions: Borrowers must have a credit score of at least 600, a minimum annual income of at least $12,000, and a job or other source of regular income. The borrower’s debt-to-income ratio must not exceed 50% (lower in select states)
  • Other noteworthy features: The minimum loan amount varies by state (Massachusetts: $7,000; Ohio: $6,000; New Mexico: $5,100; Georgia: $3,100). Loans are not available to residents of West Virginia or Iowa

Using a Personal Loan to Consolidate Debt

This method requires a new loan that’s large enough to pay off other high-interest debts, wrapping all of your unsecured debts into one larger loan, ideally with a lower interest rate. Personal loans have fixed rates and longer repayment terms, which can help you control the total of your loan payments. However, because you’re paying for a longer period, you may end up paying more in interest over the life of the loan. Most personal loans will have a minimum loan amount. Look for a loan with no prepayment penalty, so you have the option of paying extra to get the loan paid off faster.

Decide how much money you need to borrow to pay off your debts, then take out a loan for that amount and use the loan proceeds to pay off other lenders. You’ll then make one lower monthly payment to the new lender.

There are two options:

Secured personal loan: This is a loan that’s backed by collateral, like your home or car. It will be a simple way to consolidate if your credit score is less than perfect.

Unsecured loans: These are backed by the borrower’s promise to repay. Most lenders will have a minimum credit score requirement

What Types of Debt Can You Consolidate With a Personal Loan?

Most unsecured debt can be consolidated, including credit card debt. You may want to do some research, however, before consolidating medical debt or federal student loan debt, as you may lose valuable consumer protections.

The Loan Application Process

It can be a lengthy process, so review loan offers and personal loan rates before you apply and check if you have the option to prequalify. By doing so you can learn the types of loans you’re eligible for without a hard credit check.

When you’ve chosen a loan option and know how much you need to borrow, many lenders will accept online applications or go to a brick-and-mortar branch.

To complete your application, you’ll need to submit:

  • Contact information
  • Proof of income and employment
  • Social Security number
  • The purpose of the loan you seek
  • The loan amount you need

At this point in the process, a hard credit inquiry will be completed, and chances are good this will knock your credit score down by a few points. Tp avoid hurting your credit score too much, you’ll need to keep the number of loan applications you submit to a minimum.

After the loan approval, note the date your first monthly payment is due, and create autopay to make sure you won’t owe any late fees. You can also ask if it’s possible to specify your monthly due date.

Want to learn more about debt consolidation? Check out this video:

Other Debt Consolidation Options 

  • Debt settlement: This is the process of using a third-party company to negotiate your debts and straighten up any related legal actions brought against you by lenders. Keep in mind that debt settlement often comes with various fees, and involves possibly damaging your credit score.
  • Debt management plan: A debt management plan can lower the interest rate on credit card debt and create an affordable monthly payment that may reduce the debt between three to five years. Debt management plans are usually offered by nonprofit credit counseling agencies where certified counselors analyze each financial case and offer advice on debt-relief choices, and analysis all of which are usually free.
    Home equity loan or line of credit:  A home equity line or HELOC is similar to a home equity loan. A HELOC also gives access to funds through your home equity. However, instead of receiving funds as a lump-sum payment, you’ll have access to a credit line to use as needed, and reuse as you repay the balance during the draw period. You’ll also only pay interest on the amount borrowed, not the entire approved amount.
  • Mortgage refinance: A cash-out refinance lets you refinance your mortgage at an amount more than the amount owed if the value is high enough. After closing on the new mortgage, you take the extra cash.
    Balance transfer credit card: A balance transfer credit card is any credit card that lets you transfer balances from other accounts. Usually, balance transfer credit cards offer consumers an introductory 0 percent APR or zero interest on their balance for a limited time (usually between 12 and 21 months).
    Life insurance loan: Some insurers (including Northwestern Mutual Life, or NML) will let you borrow money from your life insurance policy.
    Get a loan with a co-signer: When using a co-signer, the person applies for the personal loan with you and agrees to pay off your debt if you don’t. Both are responsible for the debt and the personal loan usually appears on your credit report as well as the co-signer. Note: Credit scores will suffer if you miss payments or default on the loan. A co-signer doesn’t receive the money you borrow, but they’re ultimately responsible for repayment.

Credit Scores and Personal Loans

Different lenders have different credit score requirements and your credit score can and will determine your creditworthiness. Individuals with the highest credit scores will qualify for lower rates. There are different credit bureaus and a couple of scoring models. The most commonly used credit score is the FICO score. 

A person’s FICO credit score ranges from 300 to 850:

  • Bad credit: 300–600
  • Fair credit: 601–660
  • Good credit: 661–780
  • Excellent credit: 781–850

This score is based on the following factors:

  • Age of credit: 15% of your credit score
  • Credit utilization: 30% of your score
  • Payment history: 35% of a credit score
  • New credit:  10% of the credit score
  • Credit mix: 10% of the score

Use these free resources to keep an eye on your score.

The Bottom Line

Maybe you’re still wondering if debt consolidation is a good idea? It might be. Whether it’s worth it depends on your qualification options and what time of interest rate you can get. Debt consolidation is usually the best answer if you’re truly overwhelmed by multiple monthly payments and need a quick and fairly inexpensive solution.


What’s the Difference Between a Secured Loan and an Unsecured Loan?

Unsecured loans don’t need collateral, while secured loans do. Secured loans are considered less risky for the lender and may allow for advantageous repayment conditions. Unsecured loans can also be risky for the lender and often come with stricter conditions that try to reduce the risk.

Do I Need a Bank Account to Qualify for a Personal Loan?

You may obtain a loan without a bank account, however, there could be limited and costly options. Having a bank account i.e. a checking account is a common requirement when applying for a personal loan.

How Can I Check My Credit Report and Fix Errors?

If your credit report contains an error, get it fixed as soon as possible. Mistakes on your credit report will affect you the next time you purchase a vehicle, submit a mortgage application, apply for a job or try to rent an apartment. Learn how to check your credit reports and fix errors here.

Scroll to Top