Best debt consolidation lenders, compared
| LightStream | Rocket Loans | SoFi | Happy Money | Upstart | |
| Best for | Excellent credit | Fast funding | No fees | Consolidating credit card debt | Limited credit |
| APR | 7.99% to 23.99%* (with AutoPay). Rates as of Dec. 20, 2022. | 8.416% to 29.99% | 7.99% to 23.43% | 8.99% to 29.99% | 6.50% to 35.99% |
| Loan amount | $5,000 to $100,000 | $2,000 to $45,000 | $5,000 to $100,000 | $5,000 to $40,000 | $1,000 to $50,000 |
| Term lengths | 24 to 84 months* | 36 to 60 months | 36 to 84 months | 24 to 60 months | 36 to 60 months |
| Time to receive funds | As early as same day (conditions apply) | As early as same day | 1 business day after accepting loan | 2 to 5 business days | 1 business day after accepting loan |
| Prequalification | No | Yes | Yes | Yes | Yes |
| Origination fee | No | 1% to 6% | 1% to 8% | 0% to 5% | 0% to 8% |
| Co-signer option | No, only joint applicants | No | Yes | No | No |
| Debt consolidation for student loans | No | No | Yes | No | No |
FAQs
A debt consolidation loan may save you money. You may pay less interest if you’re approved for a lower rate than your existing debt. For example, if you have $2,500 in total debt with a combined APR of 20% and a combined monthly payment of $125, you’ll pay $566 in interest over about two years. But if you were to take out a debt consolidation loan with an 11% APR and a two-year repayment term, the new monthly payment would be $116.50, and you would save $329 in interest.
Keep in mind that access to lower rates is heavily dependent upon a high credit score.
Student loan debt consolidation is similar to other types of debt consolidation — borrowers can combine multiple student loans into one for new terms and a potentially lower interest rate.
However, student loan debt consolidation differs depending on whether you have federal loans or private loans. If you have federal loans, consolidation can only occur through the Direct Loan program, for a new rate of the weighted average of all your loans, rounded to the nearest eighth.
You cannot consolidate private student loans. However, you can refinance your loans (both private and federal) into one brand-new loan. Keep in mind that debt consolidation is a loan combination, while refinancing is simply changing the terms on a debt obligation.
Many lenders offer the option to prequalify, which allows you to view your payment plan and see what your potential interest rates and monthly payments would look like. Prequalification requires a soft credit pull, allowing lenders to view a limited portion of your credit history. AÂ soft credit pull will not impact your credit score.
An origination fee is an upfront, one-time fee for processing your loan. It may also be called the administrative or processing fee.
If you don’t have a longstanding credit history, you may need someone with good or excellent credit to co-sign your loan. A co-signer takes on loan responsibility, serving as a guarantor, and is required to make loan payments if you’re unable to. Keep in mind that your loan repayment history will affect your co-signer’s credit score. With a joint-applicant loan, both applicants are held equally responsible for paying the loan back. A co-applicant has more rights and responsibilities than a co-signer.
Lenders reviewed
- Avant
- BestEgg
- Discover
- Freedom Plus
- LightStream
- Marcus by Goldman Sachs
- Payoff
- PenFed
- Peerform
- Prosper
- One Main Financial
- Rocket Loans
- SoFi
- Upstart
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*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
Payment example: Monthly payments for a $10,000 loan at 7.99% APR with a term of 3 years would result in 36 monthly payments of $313.32.
© 2023 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
