Best Debt Consolidation Loans in Alabama 2024

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Updated: October 3, 2024

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Debt consolidation loans are unsecured personal loans that borrowers use to pay off multiple debts, including student loans, at a lower interest rate.

MoneyGeek analyzed 25 lenders and found Truist to be the top choice for debt consolidation loans in Alabama, scoring 96 out of 100. While Truist stands out in our analysis, you may also want to check out local lending options like Alabama Credit Union and Alabama Central Credit Union to see if they fit your borrowing needs.

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Best Debt Consolidation Loans in Alabama

Overall Best Debt Consolidation Loan Lender in Alabama

Company logo for Truist
Truist
MoneyGeek Score:
96/ of 100

APR Range8.87% to 17.82%
Loan Amount RangeFrom $3,500
Repayment Terms24 to 60 months
Time to Receive FundsSame Day
Overview

Truist is the best debt consolidation lender in Alabama, with a MoneyGeek score of 96 out of 100. We considered competitive rates, loan amounts, time to receive funds, service quality and reputation.

Truist's APR range of 8.87% to 17.82% helps borrowers save on interest. Loans start at $3,500, allowing flexibility for different financial needs. Its same-day funding lets borrowers quickly access the money they need to consolidate debt.

Runner-Up for Best Debt Consolidation Loan in Alabama

Company logo for PenFed
PenFed
MoneyGeek Score:
96/ of 100

APR Range8.99% to 17.99%
Loan Amount RangeUp to $50,000
Repayment TermsUp to 60 months
Time to Receive Funds1 to 2 Business Days
Overview

PenFed is another solid option for debt consolidation loans in Alabama, with a MoneyGeek score of 96 out of 100. It offers competitive APRs ranging from 8.99% to 17.99%, which can help you save on interest payments over the life of the loan.

PenFed's flexible loan terms, up to 60 months, allow you to choose a repayment plan that fits your budget. Its quick approval process means receiving funds as early as one to two business days, enabling you to swiftly consolidate your debts.

Best Debt Consolidation Loan in Alabama for Affordability

Company logo for Wells Fargo
Wells Fargo
MoneyGeek Score:
94/ of 100

APR Range7.49% to 24.99%
Loan Amount Range$3,000 to $100,000
Repayment Terms12 to 84 months
Time to Receive Funds1 to 3 Business Days
Overview

Wells Fargo offers the best debt consolidation loan in Alabama for borrowers who prioritize affordability, with a MoneyGeek score of 94 out of 100. Its APR range is 7.49% to 24.99%, but affordability isn't just about interest — it's also about having no fees like origination and the availability of rate discounts.

For example, not having to pay origination fees means you can allocate more funds toward paying off your consolidated debt. Additionally, rate discounts can lower your overall interest payments, making it easier to manage your monthly budget.

Best Debt Consolidation Loan in Alabama for Large Loan Amounts

Company logo for PNC
PNC
MoneyGeek Score:
96/ of 100

APR RangeUp to 24.99%
Loan Amount Range$1,000 to $35,000
Repayment Terms6 to 60 months
Time to Receive Funds3 Business Days
Overview

PNC offers Alabama's best debt consolidation loan for borrowers who need a large loan amount or longer repayment terms, with a MoneyGeek score of 96 out of 100. Its loan amounts range from $1,000 to $35,000 and repayment terms from six to 60 months.

Flexible repayment terms allow borrowers to choose a plan that fits their budget, making it easier to manage monthly payments. The large loan amounts enable borrowers to consolidate multiple debts into one manageable payment, simplifying their finances.

Best Debt Consolidation Loan in Alabama for Fast Funding

Company logo for Rocket Loans
Rocket Loans
MoneyGeek Score:
95/ of 100

APR Range9.116% to 29.99%
Loan Amount RangeUp to $45,000
Repayment Terms36 or 60 months
Time to Receive FundsSame Day
Overview

With a MoneyGeek score of 95 out of 100, Rocket Loans offers the best debt consolidation loan in Alabama for borrowers who need funds quickly. Its same-day funding makes it ideal for meeting urgent financial needs.

Rocket Loans features a fast approval process, allowing borrowers to pay off high-interest credit card debt quickly. Its flexible loan terms enable borrowers to choose a repayment plan that fits their budget, providing a practical solution for managing consolidated debts.

Should You Get a Loan to Consolidate Debt in Alabama?

Using a debt consolidation loan in Alabama can simplify your finances by merging multiple payments into one. But it’s not always the best option. For example, it might not make sense if the new loan's interest rate is higher than your current debts. Consider your specific situation before deciding.

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    Good Credit

    Having good credit can get you better terms on a debt consolidation loan in Alabama, affecting your interest rates and monthly payments.

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    High-Interest Debt

    Consolidating high-interest debt with a loan can lower your interest rates. For example, you could reduce a 20% APR to 10%.

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    Multiple Monthly Payments

    Combining several monthly payments into one with a debt consolidation loan simplifies your finances. One payment is easier to manage than several ones.

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    Lower Monthly Payments

    Debt consolidation can lower your monthly payments. For example, you could reduce $500 in total costs to $300.

When You Shouldn't Get a Debt Consolidation Loan

  • When your new monthly payment is higher: A higher monthly payment can strain your budget further, leading to more financial stress rather than relief.
  • When you can pay off debt in a year: If you can clear your debt within a year, a consolidation loan might not be necessary. Short-term sacrifices could save you on interest.
  • When your income is unstable: Unpredictable income makes it hard to commit to fixed monthly payments. This could lead to missed payments and additional fees.
  • When your DTI ratio is high: A high debt-to-income ratio can result in loan denial or unfavorable terms. Improving your DTI before applying for a debt consolidation loan in Alabama is a better strategy.

How to Get a Debt Consolidation Loan in Alabama

Alabama's average annual personal loan debt is $77,981, lower than the national average of $104,215. The monthly debt averages $6,498.

Using a personal loan to consolidate debt can simplify your payments and lower your interest rates. Going into the process mindlessly can lead to higher interest rates and damage your credit score. To avoid risks, follow these steps to apply for a debt consolidation loan.

1
Review your debts and credit score

Account for your existing debts to see which ones to consolidate, like credit card debt. Choosing the wrong ones can lead to higher interest rates. Check and improve your credit score by paying bills on time and reducing debt.

2
Compare loan terms from lenders

Compare loan terms from multiple lenders. Confirm with them that you can use the loan for debt consolidation. Check the APRs, loan limits and how soon you can receive the funds.

3
Check for extra benefits

Some lenders offer added features that benefit you long-term. For example, in Alabama, Upgrade and Rocket Loans provide rate discounts.

4
Watch out for fees and penalties

Some lender features could be drawbacks. In Alabama, Happy Money charges an origination fee, and Laurel Road charges a late fee. These can impact your short-term and long-term finances.

5
Get prequalified

Prequalification helps borrowers understand potential loan terms without affecting their credit score. It involves a soft credit check, which doesn't impact your credit.

6
Complete your loan application

Prepare the necessary documents, such as proof of income and identification, to complete your loan application. This will speed up the process.

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WHAT TO DO IF YOU'RE DENIED A DEBT CONSOLIDATION LOAN IN ALABAMA

Lenders may deny your loan application if you have a poor credit score or a high debt-to-income ratio. Before applying for a debt consolidation loan in Alabama, check your credit report for errors and work on improving your score.

You can also contact credit counseling agencies like Stand Sure Counseling Services or Hananwill Credit Counseling for help managing your debt. Another option is a 0% APR balance transfer credit card, which lets you transfer high-interest debt to a new card with no interest for a limited time, helping you save on interest.

Local Lenders for Debt Consolidation Loans in Alabama

Consolidating debt can reduce your overall payments through lower interest rates. Average APRs vary by city; for example, Montgomery's average APR is 9.2%, while Mobile's is 11.4%.

Also, explore local lenders to find Alabama's best debt consolidation loan. Below is a table of local lenders to help you get started.

Avadian Credit UnionCityBirminghamAPRFrom 8.49%Repayment TermsUp to 84 MonthsLoan Amount RangeUndisclosedMoneyGeek Score99
Regions BankCityHuntsvilleAPR9.24% to 29.99%Repayment Terms36 to 60 monthsLoan Amount Range$2,000 to $50,000MoneyGeek Score98
Regions BankCityMobileAPR9.24% to 29.99%Repayment Terms36 to 60 monthsLoan Amount Range$2,000 to $50,000MoneyGeek Score98
Max Credit UnionCityMontgomeryAPRFrom 9.25%Repayment TermsUp to 42 monthsLoan Amount RangeUndisclosedMoneyGeek Score97
Fedmont Federal Credit UnionCityMontgomeryAPR8% to 18%Repayment TermsUndisclosedLoan Amount Range$2,500 to $10,000MoneyGeek Score96

FAQ: Debt Consolidation Loans in Alabama

MoneyGeek addresses common questions about debt consolidation loans in Alabama, helping borrowers understand their options and make informed decisions.

What is a debt consolidation loan in Alabama?
What's the best debt consolidation loan lender in Alabama?
Can I get a debt consolidation loan in Alabama if I have bad credit?
Can a credit counseling agency in Alabama help manage debt?
When should I get a debt consolidation loan in Alabama?

MoneyGeek analyzed 25 national lenders licensed in Alabama using a rubric that factors in APR ranges, loan amounts and repayment terms. We assign scores based on how well lenders meet key criteria. The scoring system varies for recommendations on affordability, loan amounts and fast funding.

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We conducted our analysis in September 2024.

25Lenders Analyzed

About Zachary Romeo, CBCA


Zachary Romeo, CBCA headshot

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.


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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. Learn more about our editorial policies and expert editorial team.