Best Debt Consolidation Loans of 2024

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Updated: July 8, 2024

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Based on MoneyGeek’s analysis, First Tech stands out as the best overall lender for debt consolidation. Alliant Credit Union is excellent for borrowers with good credit, whereas Happy Money is the best option for those with bad credit. Truist is preferable for same-day funding.

According to Experian, American consumers had a total debt of $17.1 trillion in the third quarter of 2023, with mortgage debt comprising nearly two-thirds of all consumer debt, followed by auto loans, student loans and credit cards. Consolidating multiple debts can streamline your finances by combining them into a single loan, often with a lower interest rate.

We compared lenders based on factors like interest rates, loan terms, application process, customer service, minimum credit score requirements and overall reputation to gather recommendations for your specific financial needs.

MoneyGeek analyzed debt consolidation loan lenders differently at the national level versus the state level. We used a unique scoring system that looked into each lender’s performance in areas that are important to borrowers. We assigned scores based on whether certain features are present or absent in various key categories.

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Our analysis was completed in April 2024 and considered banks, credit unions, online lenders, and financial companies who partner with federally insured institutions to offer personal loans for debt consolidation.

34Lenders Analyzed

    Best Overall Debt Consolidation Loan

  • First Tech

    • 98MG Score
    • 8.94% to 18.00%APR Range
    • UndisclosedMinimum Credit Score
    • $500 to $50,000Loan Amount Range
    • 6 to 84 monthsRepayment Terms

    First Tech Federal Credit Union earns the spot as the best overall choice for a debt consolidation loan, with a MoneyGeek score of 98 out of 100. This institution is federally insured by the National Credit Union Administration (NCUA). It offers personal loans from $500 to $50,000, with six to 84 months repayment terms and interest rates varying from 8.94% to 18.00% APR, making it a good option for consolidating debt. There are also no origination, application or prepayment fees. However, First Tech charges a $29 late fee and doesn’t specify whether it provides direct payment to creditors.


    • Low starting APR at 9.29%
    • No origination or prepayment fees
    • Performs soft credit checks
    • Option to defer first loan payment


    • Membership is required to apply
    • No direct payment to creditors
    • Charges a $29 late fee
    First Tech

    Runner-Up Best Debt Consolidation Loan

  • PenFed

    • 97MG Score
    • 7.99% to 17.99%APR Range
    • UndisclosedMinimum Credit Score
    • Up to $50,000Loan Amount Range
    • Up to 60 monthsRepayment Terms

    As the runner-up lender for debt consolidation, PenFed earned a MoneyGeek score of 97 out of 100. This lender is federally insured by the NCUA, providing personal loans up to $50,000, with terms extending up to 60 months and interest rates between 7.99% and 17.99% APR. While it doesn’t charge origination fees or prepayment penalties, it applies fees for late payments ($29) and returned loan payments, checks or ACH transactions ($30). You don’t need to be a member to apply for a loan, but PenFed will create a membership if you move forward with your application.


    • Minimum APR of 7.99%
    • Conducts soft credit pulls
    • Allows joint applications
    • No origination or prepayment fees


    • Has a $29 late fee
    • Doesn’t pay creditors directly
    • Loans subject to minimum $50 monthly payment

    Best Debt Consolidation Loan for Good Credit

  • Alliant Credit Union

    • 96MG Score
    • 10.99% to 13.99%APR Range
    • UndisclosedMinimum Credit Score
    • $1,000 to $100,000Loan Amount Range
    • 12 to 60 monthsRepayment Terms

    With a MoneyGeek score of 96 out of 100, Alliant Credit Union is the best lender for those with good credit-seeking debt consolidation loans. It’s an online-only credit union that’s federally insured by the NCUA. It provides loans up to $100,000, featuring repayment terms from 12 to 60 months and APR from 10.99% to 13.99%. There are no prepayment penalties, but you must be a member for at least 90 days to qualify for a personal loan.


    • Borrow up to $100,000
    • No prepayment penalties
    • Has autopay discount


    • Need to be a member for 90 days
    • No physical branches
    Alliant Credit Union

How does MoneyGeek analyze lenders for good credit?

    Best Debt Consolidation Loan for Bad Credit

  • Happy Money

    • 93MG Score
    • 11.72% to 17.99%APR Range
    • 640Minimum Credit Score
    • $5,000 to $40,000Loan Amount Range
    • 24 to 60 monthsRepayment Terms

    Borrowers with bad credit may find Happy Money to be the best lender for debt consolidation, which received a MoneyGeek score of 93 out of 100. As a fintech company, Happy Money works with federally insured lending partners to originate personal loans exclusively to consolidate debt. It also offers direct payment to creditors, streamlining the process for borrowers. Its loan amounts range from $5,000 to $40,000, with repayment periods from 24 to 60 months and APRs from 11.72% to 17.99%. Happy Money doesn’t impose late fees, application fees, or prepayment penalties, but it charges an origination fee between 1.5% and 5.5%.


    • Accepts borrowers with 640 credit score
    • No application, late or prepayment fees
    • Pays creditors directly


    • Charges an origination fee
    • Maximum loan amount of $40,000
    Happy Money

How does MoneyGeek analyze lenders for bad credit?

    Best Debt Consolidation Loan for Same-Day Funding

  • Truist

    • 96MG Score
    • 8.74% to 17.39%APR Range
    • UndisclosedMinimum Credit Score
    • From $3,500Loan Amount Range
    • 24 to 60 monthsRepayment Terms

    Truist is our preferred lender for borrowers seeking debt consolidation loans with same-day funding, earning a MoneyGeek score of 96 out of 100. It offers personal loans starting at $3,500, flexible repayment terms from 24 to 60 months and interest rates between 8.74% and 17.39% APR. It also doesn’t impose origination fees. However, detailed information on its loan products is limited on its website, and there’s no option available to prequalify for loans.


    • No origination fees
    • Same-day funding available
    • 8.74% starting APR


    • Little information on website
    • No soft credit inquiries

How does MoneyGeek analyze lenders for same-day funding?

How Debt Consolidation Loans Work

Debt consolidation loans allow you to combine multiple existing debts like credit cards, personal loans or medical bills into one new loan. You then make fixed monthly payments on the new loan, typically lasting two to seven years. The key benefit is simplifying multiple debt payments into one, potentially lowering your overall interest costs and giving you a clear payoff schedule.

The process begins with choosing the debts to pay off and then qualifying based on the lender's requirements, which typically include a high credit score. After the loan is funded, payments will be made based on the chosen terms. It’s important to qualify for an effective interest rate lower than your current debts, as well as to avoid accumulating new debt during repayment.


Individuals with high credit scores are more likely to get the most competitive rates and terms. Applicants with low credit scores may be eligible for reduced consolidation limits, or may only have access to secured loans.

Alvin Yam, CFP

Benefits and Drawbacks of Debt Consolidation Loans

Debt consolidation loans can be a strategic move for managing multiple high-interest debts. However, these loans can sometimes lead to a longer repayment period.


Simplified Payments: Consolidating multiple debts into one loan means you only have one monthly payment to manage.

Qualification Challenges: Those with lower credit scores may struggle to qualify for lower interest rates, making it less beneficial.

Lower Interest Rates: Often, these loans come with lower interest rates than credit cards, potentially saving you money over time.

Longer Repayment Terms: While monthly payments might be lower, longer repayment terms can result in paying more interest over the life of the loan.

Fixed Repayment Schedule: Debt consolidation loans typically come with a fixed repayment term, providing a clear end date for when you will be debt-free.

Upfront Costs: Some debt consolidation loans come with origination fees or other upfront costs, which could reduce the financial benefits.

Improved Credit Score: By consolidating debt and making regular, on-time payments, you can gradually improve your credit score.

Risk of Debt Cycle: Without a change in spending habits, there's a risk of accruing additional debt, putting you in a worse financial position.

How to Choose the Best Debt Consolidation Loan for You

With various offers, terms and lenders available in the market, finding the best debt consolidation loan for your needs involves looking into the following metrics:

  • Interest Rates: The interest rate on a debt consolidation loan affects the overall cost you will pay. Look for competitive rates that can help reduce your monthly payments and shorten the debt payoff period.

  • Repayment Terms: Evaluating loan terms is critical because they determine your repayment schedule. Choosing the right balance between term length and monthly payments can significantly affect your budget and how quickly you become debt-free.

  • Fees: Analyzing fees is essential for a clear understanding of the true cost of a debt consolidation loan. Look out for origination fees, late fees or prepayment penalties, which can erode savings from a lower interest rate.

  • Additional Features: Some debt consolidation loans come with benefits that can assist in managing debt, like direct payment to creditors. This can help prevent mismanagement of the loan amount and keep your repayment plan on track.

FAQ About Debt Consolidation Loans

We compiled answers to some frequently asked questions about debt consolidation loans to help you make informed decisions.

How can a debt consolidation loan lower my monthly payments?
Will applying for a debt consolidation loan affect my credit score?
Can I consolidate credit card debt with a consolidation loan?
Are there any fees associated with debt consolidation loans?
How do I qualify for a debt consolidation loan?
Can I consolidate debt with bad credit?
What's the maximum debt amount that can typically be consolidated?

Experts Tips About Debt Consolidation Loans

  1. How can people determine if they can benefit from using a personal loan for debt consolidation?
  2. Are there any potential downsides to consolidating debts with a personal loan?
  3. What should consumers look for when comparing different personal loan lenders’ offers?
  4. In what situations might it be better not to pursue an unsecured personal loan for debt consolidation?
Todd Schwartz
Todd SchwartzChief Executive Officer, Executive Chairman, and Founder of OppFi
Dr. Christopher Calvin
Dr. Christopher CalvinAssistant Professor, Department of Accounting at the University of Dayton
Neal Hansen, CFP®
Neal Hansen, CFP® Financial Advisor at Net Worth Advisory Group
Andrew Posner
Andrew PosnerCEO & Founder of Capital Good Fund
Brandon Gregg
Brandon GreggMarket President and Financial Advisor at BBK Wealth Management
Amy Schultz
Amy SchultzCertified Money Coach, Financial Therapist Candidate and Co-Founder at Bolder Money
Michael Imerman, Ph.D.
Michael Imerman, Ph.D.Assistant Professor of Teaching Finance at the Paul Merage School of Business, University of California, Irvine
Todd Draak
Todd DraakVP Consumer Banking Regional Manager at Johnson Financial Group
Dan Cieniewicz
Dan CieniewiczFinancial Planner at Hyperion Financial
Brett Sifling
Brett SiflingDirector of Get Invested at Gerber Kawasaki Wealth & Investment Management
Peter Zaleski, Ph.D.
Peter Zaleski, Ph.D.Professor of Economics at Villanova University
Jonathan Grannick
Jonathan GrannickFinancial Planner & Founder of Wonder Wealth
Gregory Germain
Gregory GermainProfessor at Syracuse University College of Law
Ravin Walters, CFP® AWMA®
Ravin Walters, CFP® AWMA®Financial Planner at Transverse Wealth Solution
Debbi King
Debbi KingCertified Financial Education Instructor and Personal Finance Educator
Jeffrey Clark
Jeffrey ClarkWealth Advisor and Partner at Pine Grove Financial Group
Angelo DeCandia
Angelo DeCandiaInstructor at Touro University
Jason Cherubini
Jason CherubiniLecturer, Business Administration
Kenneth Romanowski, CFP, CTFA(Ret.), CTFA(Ret.) CFP Board Emeritus(R)
Kenneth Romanowski, CFP, CTFA(Ret.), CTFA(Ret.) CFP Board Emeritus(R)Adjunct Faculty at Rosemont College and Retired Senior Financial Advisor
Mark Stohs, Ph.D.
Mark Stohs, Ph.D.Emeritus Professor of Finance at California State University, Fullerton
Michael Manahan
Michael ManahanLecturer at California State University Dominguez Hills; Author and Business Consultant
Malcolm Robinson, Ph.D.
Malcolm Robinson, Ph.D.Professor of Economics at Thomas More University
Sathya Chey Patterson, CFP®, CDFA®, CSRIC®, AIF®, MBA
Sathya Chey Patterson, CFP®, CDFA®, CSRIC®, AIF®, MBA Managing Partner, Wealth Advisor at Arise Private Wealth
Jeff Campbell
Jeff CampbellFounder at Middle Class Dad Money
Qian Wang, Ph.D.
Qian Wang, Ph.D.Associate Professor of Finance, College of Business and Computing at Georgia Southwestern State University
Steven Gattuso
Steven GattusoAssistant Professor of Economics & Finance at Canisius College
Shield Insurance

The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.