MoneyGeek’s Picks for 2022

Best Debt Consolidation Loans

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Last Updated: 10/18/2022
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Paying off high-interest debts, like credit card debt, can be challenging. Debt consolidation is one way to make these debts more manageable. Combining your debts into one account gives you a single monthly debt payment with a lower interest rate.

When looking for a debt consolidation loan, seek out options with low-interest rates, affordable repayment terms and little to no fees. MoneyGeek analyzed a broad range of lenders to help you find the best personal loans for debt consolidation for your needs.

Best Debt Consolidation Loans for 2022

Debt consolidation is a way to combine some or all debts into one new credit line. This way, your debts are contained in a single monthly payment instead of multiple bills.

While debt consolidation doesn’t erase your debts, it can help lower your overall interest rate and monthly payment and make it easier to pay off credit cards, medical debt or other unsecured debts. A personal loan is one way of consolidating debts.

MoneyGeek evaluated different lenders using more than 35 individual data points to determine the best personal loan lenders for debt consolidation. Based on our analysis, Lightstream is the top option for borrowers who need a debt consolidation personal loan.

MoneyGeek’s Top Pick for Debt Consolidation: LightStream


  • LightStream

    • 4.49% to 20.49%APR Range
    • 660Minimum Credit Score
    • $5,000 to $100,000Loan Amount Range
    • 24 to 84 monthsRepayment Terms
    • Same DayTime to Receive Funds

    on LightStream Website

Runner-Up: SoFi


  • SoFi

    • 5.74% to 20.28%APR Range
    • 680Minimum Credit Score
    • $5,000 to $100,000Loan Amount Range
    • 12 to 60 monthsRepayment Terms
    • Two DaysTime to Receive Funds

    on SoFi Website

Other Personal Loan Options for Debt Consolidation

  • Lender
    Minimum Credit Score
    Loan Amounts
    APR Range
    Ready to Apply?
  • Truist

    None

    $3.5K to $50K

    8.14% to 18.99%

  • Upstart

    300

    $1K to $50K

    3.22% to 35.99%

  • American Express

    660

    $3.5K to $40K

    4.93% to 19.97%

  • Upgrade

    560

    $1K to $50K

    5.94% to 35.47%

  • Discover

    720

    $2.5K to $35K

    5.99% to 24.99%

Why You Should Consolidate Your Debt With a Personal Loan

Debt consolidation is a way to manage existing debts. Typically, it is for unsecured credit obligations like loans, medical debt and credit card debt.

When you consolidate your debt with a personal loan, you’re essentially borrowing a larger amount of money to pay off several smaller debts. In doing so, you end up with a single, new account that could lower your interest rates. Debt consolidation helps simplify your monthly bills and potentially allows the borrower to get out of debt faster.

Debt consolidation using personal loans may be an excellent option for individuals with manageable monthly debt payments who want a fixed monthly payment. Those looking for a way to lower their overall interest rate may also find debt consolidation beneficial.

Where to Start: Choosing the Best Personal Loan for Debt Consolidation

There are various factors lenders consider when determining whether to approve or reject a personal loan application. These include credit scores, income details, employment, current debts, loan amounts and terms. Gathering this information ahead of time can help you find the best personal loans for debt consolidation that you qualify for.

MoneyGeek breaks down the best steps to take to find the right personal loan for your needs.

1

Ask Yourself the Important Questions

Taking out a personal loan requires careful consideration. Before applying, make sure that a debt consolidation personal loan is the best option for you. Consider your financial situation, determine if you can afford to take out a new loan and evaluate if consolidating your debts into a personal loan will help lower your overall interest rates. Otherwise, it may be best to find another way to manage your finances.

You can start by asking yourself the following questions:

  • How much do I need to borrow?
  • What is my credit score?
  • Can I afford the monthly payment?
  • How much debt do I already have?
2

Do Your Research

A debt consolidation personal loan is a significant financial commitment that you will have to pay for two to six years, on average. As such, it’s important that you shop around and compare offerings from multiple lenders. Carefully investigate each of their loan offers, terms and rates.

We also recommend learning more about each prospective lender's review and application process. For instance, some lenders only perform a soft credit inquiry. However, others conduct hard credit checks that may affect your credit score.

While MoneyGeek’s resources can help you find a lender that meets your needs, remember that our recommendations may not be ideal for all types of borrowers. It’s still in your best interest to explore all available options, including those not mentioned in this guide.

3

Wait

Taking out a personal loan is a long-term commitment; that’s why it’s essential to carefully evaluate if it’s your best option. After gathering all relevant information, we recommend waiting a day or two before applying for a loan. You can use this time to review your options and determine which lender is right for you.

4

Read the Fine Print

Once you have finalized your decision to take out a debt consolidation personal loan, your next step is to read the fine print. Review all details in the loan agreement. While some pieces of information may seem unimportant, they may end up helping you save money in the long run. For example, make sure you are aware of all fees, such as prepayment penalties, late payment fees and origination fees. Ask the lender about upfront and hidden costs. Be sure to clarify any details you find confusing.

5

Apply

If you are absolutely sure about taking out a personal loan, you can proceed with the application. At this point, you should already be aware of the qualification requirements and have all documents and paperwork ready. While each lender may have different requirements, most companies ask for identification, income details and address verification.

Most lenders accept online applications. While this is the most convenient and fastest option, it may help to call or visit the lender, if possible. This way, you can quickly clarify any concerns you have.

Key Takeaways

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Ask Yourself the Important Questions: Evaluate your options and determine if a personal loan is the best course of action for you.

find

Do Your Research: Shop around and compare lenders. Check rates, fees and loan offers.

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Wait: Take a day or two to carefully evaluate your decision and options.

financialPlanning

Read the Fine Print: Review all details in the loan agreement and make sure you understand the terms.

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Apply: Submit your loan application online or in person.


Calculate Your Monthly Payment

MoneyGeek recommends calculating your monthly payment — especially if you are pre-approved by a lender — to make sure you can repay the loan. Calculating your monthly payment ahead of time also allows you to evaluate if you need to adjust your payment term, loan amount and other parameters.

years
months
%



Principal

+ $114.98

Interest

+ $8.33

Origination Fee Percentage

+
%

Origination Fee Fixed amount

+

Total monthly payment

$123.31

Frequently Asked Questions About Personal Loans for Debt Consolidation

The best personal loan lender for consolidating your debt may vary based on your individual needs. MoneyGeek answers some frequently asked questions about using a personal loan for debt consolidation to help you make an informed decision.

Methodology

We reviewed over 30 personal loan lenders using 35+ individual data points across six key categories: loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency.

Within each ranking criteria category, we considered several individual data points that we feel carry the most weight when choosing a personal loan lender for debt consolidation. These factors include APR ranges, available loan amount, minimum credit score, minimum income amount, application fees and disbursement time.

Here at MoneyGeek, we value you — the consumer — so we also factor in each lender’s customer support, business ratings and additional features that could make your experience easier and more accessible — like prequalification, payment options and mobile apps.

After careful consideration and calculation, our picks are decided and chosen with your best interest in mind. Our personal loan recommendations and expert tips are meant to help you make the best decision when choosing a lender to consolidate your debts and meets your needs.

Read More on Personal Loans

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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.