Best Personal Loans for Debt Consolidation
When random purchases, necessary expenses or extravagant splurges catch up with you, the best way to consolidate credit card debt can be through debt consolidation. Debt consolidation is a way to refinance existing debt by taking out a new loan, which can help you secure lower interest rates and payments to get rid of your debt more quickly.
Although the best loans have low personal loan rates and fees, personal loan interest rates will be higher for people with bad credit rather than good credit. Find out what you need to know about personal loans to consolidate your debt.
Top 10 Personal Loans for Debt Consolidation | ||||||
Personal Loan Debt Consolidation Option | APR (%) | Loan Terms | Loan Amounts | Fees | Funding Time | How to Apply |
LightStream | 5.49 – 14.69 | 24 – 84 months | $5,000 – $100,000 | None | As soon as same day as application | |
SoFi | 5.49 – 14.24 | 3 – 7 years | $5,000 – $100,000 | None | Within a few days | |
Upgrade | 5.66 – 35.97 | 36 or 60 months | $1,000 – $50,000 | Origination fee: 1% – 5% | Within four business days | |
PersonalLoans.com | 5.99 – 35.99 | 6 – 72 months | $1,000 – $35,000 | Origination fee for peer-to-peer: 1 – 5% | As soon as the next business day after signing loan agreement | |
LendingClub | 5.99 – 35.89 | 3 or 5 years | $1,000 – $40,000 | Origination fee: 1-6% | 7+ days | |
Best Egg | 5.99 – 29.99 | 3 or 5 years | $2,000 – $50,000 | Origination fee: 0.99% – 5.99% | 1+ days | |
Marcus by Goldman Sachs | 6.99 – 23.99 | 36 – 72 months | $3,500 – $30,000 | None | 2+ days | |
Payoff | 8.00 – 25.00 | 2 – 5 years | $5,000 – $35,000 | Origination fee: 2% – 5% | 3-6 business days | |
Upstart | 9.56 – 29.99 | 3 or 5 years | $1,000 – $50,000 | Origination fee: 0% – 8% | 1+ days | |
Avant | 9.95 – 35.99 | 24 – 60 months | $2,000 – $35,000 | Administration fees: 1.50% – 4.75% | 1+ days | |
Rates accurate as of Dec. 26, 2017 |
Top 10 Personal Loans for Debt Consolidation
It only makes sense to refinance your credit card debt if you can find a lower rate than your credit card is charging. The field is so competitive, however, that you should look for personal loans with additional features and benefits. When researching how to pay off debt, consider the following lenders. Here are the top debt consolidation loan options:
Learn About: 10 Best Debt Consolidation Companies
LightStream
LightStream is a division of SunTrust Bank and offers a host of benefits for debt consolidation loans, including $0 fees, same-day funding, loan terms up to 84 months and loan limits up to $100,000. Borrowers who aren’t satisfied with their lending experience can contact LightStream, fill out a questionnaire within 30 days of loan disbursement and receive $100.
Rates are reasonable, starting at 5.49 percent on a $10,000 or greater loan maturing in 24-36 months for borrowers with excellent credit. The company also offers a Rate Beat Program that promises to beat any comparable rate from a competitor by 0.10 percent.
Pros
Low rates on the low and high end, from 5.49 percent to 14.69 percent
Satisfaction guarantee
Rate Beat program
High loan limits of $100,000
24 to 84-month term loan range
No fees
Fast funding
Cons
Excellent credit needed for lowest rates
Loans required to be identical to qualify for Rate Beat Program
Read More: What Are ‘No Credit Check’ Personal Loans?
SoFi
SoFi offers many of the top features of LightStream, including $0 fees, refinancing rates as low as 5.49 percent, loan limits up to $100,000 and terms as long as seven years. Funding is fast, and you can receive your money within a few days of signing your application. SoFi only offers debt consolidation loans for unsecured debt, such as credit card debt — not secured debt.
Pros
$0 fees
Low debt consolidation rates
High loan limits
Long loan terms available
Rapid funding
Best interest rates on the list, at 5.49 percent on the low end and 14.24 percent on the high end
Cons
For unsecured debts only
Must meet state eligibility qualifications for approval
Upgrade
Upgrade has a quick, one-page application you can complete online to check your rate and get a loan decision within seconds. Fixed-rate loans are offered between $1,000 and $50,000, and you can pay it back over either 36 or 60 months.
Although total funding time can be up to four business days, Upgrade sends your funds within one day of verifying your identity and your financial information. Loans have an origination fee of 1 percent to 5 percent.
Pros
Easy to apply
Loans up to $50,000
Interest rates as low as 5.66 percent
Rapid funding after verification
Cons
Rates can go as high as 35.97 percent
Origination fee of 1 to 5 percent
Limited loan terms of either 36 or 60 months
PersonalLoans.com
PersonalLoans.com serves as a connector between borrowers and lenders. After completing an online application, lenders in the PersonalLoans.com network will review your information and decide whether or not to extend credit.
You can receive funding in as little as one business day after your application, after which you’ll have between six and 72 months to pay off your loan, at rates between 5.99 and 35.99 percent. And loan amounts range from $1,000 to $35,000. For peer-to-peer loans, you should have a credit score of 600+ and income of at least $2,000 per month.
Pros
Network of lenders
Rapid funding
Lowest rates are competitive
Wide range of loan terms
Cons
Highest rate of 35.99 percent
Origination fee of 1 to 5 percent for peer-to-peer loans
Relatively low maximum funding amount
LendingClub
LendingClub works somewhat like its competitor PersonalLoans.com in that it doesn’t originate loans itself, but rather, connects investors and borrowers. LendingClub provides access to loans of between $1,000 and $40,000, with interest rates as low as 5.99 percent. Loan terms are either three or five years, and origination fees cost between 1 and 6 percent.
Pros
Peer-to-peer lender offering access to numerous funding sources
Low rates of 5.99 percent available
High customer satisfaction
Cons
Highest rates reach 35.89 percent
Loan terms of three or five years only
High origination fees
Can take seven or more days to receive funds
Best Egg
With Best Egg, you can apply online and have your funding in as little as one business day. The company offers loans of either three or five year, which contain no hidden fees or prepayment penalties. Rates as low as 5.99 percent make the lender competitive with peers, and loan maximums reach as high as $50,000.
Pros
Rates as low as 5.99 percent
Quick access to funds
No prepayment penalties
High maximum funding level of $50,000
Cons
Rates top out at 29.99 percent
Only two options for loan terms: three years or five years
Origination fees of 0.99 percent to 5.99 percent
Marcus by Goldman Sachs
Marcus is backed by Goldman Sachs, a top-tier financial services firm. There are no fees to originate a loan via Marcus, which offers funding of between $3,500 and $30,000 in two or more business days. The firm’s personal loan rates range from 6.99 percent to 23.99 percent and have terms of 36 to 72 months.
Pros
Solid financial backing from Goldman Sachs
No fees to originate loans
Flexible terms of between three and six years
Midlevel interest rates
No late fees
Cons
Relatively low maximum of $30,000
Relatively high minimum of $3,500
Payoff
Payoff is one of the few lenders that specifies a minimum credit score to qualify for a loan: 640. You also must have a debt-to-income ratio of less than 50 percent, at least three years of good credit history, no current credit delinquencies, and at least two open and satisfactory trade lines. The company offers loans from $5,000 to $35,000 for terms of two to five years, with rates ranging from 8 percent to 25 percent.
Pros
Clearly articulated minimum standards
No late payment fees
Fixed payments and interest
Cons
High minimum interest rates of 8 percent
High minimum loan requirement of $5,000
Origination fees of 2 to 5 percent
Upstart
Upstart offers loans to fit nearly any need, from $1,000 to $50,000. Unlike many other lenders, Upstart offers consolidation loans for both secured and unsecured loans. Additionally, your education, area of study and job history are considered to qualify you for a lower rate.
You can check your rate with an easy one-page online application. Rates vary from 9.56 percent to 29.99 percent, and you can receive your money in as little as one business day.
Pros
Flexible funding levels available
Consolidates both secured and unsecured loans
Easy application process
Rapid funding
Cons
Lowest available interest rate is 9.56 percent
Origination fees range from 0 percent to 8 percent
Loan terms limited to either three or five years
Avant
Flexible loan terms of 24 to 60 months are one of Avant’s highlights. The company can also provide funding by the next business day. Loan amounts range from $2,000 to $35,000, with rates of 9.95 percent to 35.99 percent. Administration fees cost anywhere between 1.50 percent and 4.75 percent.
Pros
Good range of loan maturities
Rapid financing of loans
Cons
Lowest available rates are high, at 9.95 percent
Top rates of 35.99 percent are high
Administration fees of 1.50 to 4.75 percent
Up Next: 10 Common Personal Loans — and Options for When You Can’t Qualify
This article originally appeared on GOBankingRates.com: Best Personal Loans for Debt Consolidation