Mortgage

12 Best Debt Consolidation Loans of July 2024

Rates and APYs may change. All info is current as of July 28, 2024

Key Points

  • Debt consolidation loans can help pay off high-interest debt if you get a good rate, pay on time, and avoid more debt.
  • The best loans offer prequalification, online approval, flexible terms, low rates, no fees, and no prepayment penalties.
  • These loans are often used to reduce credit card debt.
  • Top picks include Discover, Lightstream, and SoFi.

Why Choose Us?

Our editors and writers independently evaluate loans to ensure accuracy and integrity. Check our full methodology for more details.

  • Reviewed 22 providers
  • 1,000+ hours of research
  • Based on 20+ data points like cost, terms, and customer reviews

Top Debt Consolidation Loans of July 2024

Listed alphabetically:

  • Accredited Debt Relief – Best Debt Settlement Service
  • Achieve – Best Online Quote
  • Avant – Best Financial Resources
  • Best Egg – Best for Easy Application
  • Discover – Best for Credit Card Debt
  • Fiona – Best for Comparing Lenders
  • Happy Money – Best for Multiple Options
  • LightStream – Best for Large Loans
  • OneMain Financial – Best for In-Person Service
  • PenFed – Best for Small Loans
  • SoFi – Best for No Fees
  • Upstart – Best for Flexible Qualification

Loan Reviews

Accredited Debt Relief

  • Highlights:
    • APR: 4.9%-35.99%
    • Loan Amount: $1,000-$100,000
    • Term: 4 to 84 months
    • Minimum Credit Score: Depends on loan affiliates

Why We Chose It: Accredited helps you settle and consolidate your debt. They negotiate with creditors to reduce what you owe and charge a 15-25% fee. They don’t charge until a settlement is reached and may cut your debt by 50%.

Achieve

  • Highlights:
    • APR: 8.99% to 35.99%
    • Loan Amount: $5,000-$50,000
    • Term: 24 to 60 months
    • Minimum Credit Score: Not specified

Why We Chose It: Achieve offers a simple online tool for quick loan quotes. They provide same-day approval and funding in one to three days.

Avant

  • Highlights:
    • APR: 9.95%-35.99%
    • Loan Amount: $2,000-$35,000
    • Term: 12 to 60 months
    • Minimum Credit Score: Not specified

Why We Chose It: Avant offers robust financial resources and multiple ways to reach customer service. They have loan pre-approval, Autopay, and a mobile app.

Best Egg

  • Highlights:
    • APR: 8.99%-35.99%
    • Loan Amount: $2,000-$50,000
    • Term: 36 to 60 months
    • Minimum Credit Score: 700+ for best rate
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Why We Chose It: Best Egg provides a fast online application for quick approval. They offer loans for consolidating multiple debts or credit card refinancing.

Discover

  • Highlights:
    • APR: 7.99%-24.99%
    • Loan Amount: $2,500-$40,000
    • Term: 36 to 84 months
    • Minimum Credit Score: Not specified

Why We Chose It: Discover pays your credit cards directly within one business day. They offer low rates and no origination or prepayment fees.

Fiona

  • Highlights:
    • APR: Varies by lender
    • Loan Amount: Varies by lender
    • Term: Varies by lender
    • Minimum Credit Score: Varies by lender

Why We Chose It: Fiona lets you compare multiple lenders. They partner with companies like LendingClub, SoFi, Avant, and Marcus.

Happy Money

  • Highlights:
    • APR: 11.72%-17.99%
    • Loan Amount: $5,000-$40,000
    • Term: 24 to 60 months
    • Minimum Credit Score: Not specified

Why We Chose It: Happy Money offers free consultations and personalized loan options. They charge no application, prepayment, or late fees, but an origination fee may apply.

LightStream

  • Highlights:
    • APR: 8.99%-25.99%
    • Loan Amount: $5,000-$100,000
    • Term: 24 to 240 months
    • Minimum Credit Score: 660

Why We Chose It: LightStream offers loans up to $100,000 with flexible terms of two to 12 years. They require good to excellent credit.

OneMain Financial

  • Highlights:
    • APR: 18.00%-35.99%
    • Loan Amount: $1,500-$20,000
    • Term: 24 to 60 months
    • Minimum Credit Score: Not specified

Why We Chose It: OneMain Financial offers online and in-person services. They provide secured and unsecured loans from $1,500 to $20,000.

PenFed

  • Highlights:
    • APR: From 8.99%
    • Loan Amount: Up to $50,000
    • Term: 12 to 60 months
    • Minimum Credit Score: Not disclosed

Why We Chose It: PenFed offers small loans starting at $600. They are a federal credit union, so you must be a member to apply.

SoFi

  • Highlights:
    • APR: 8.99%-29.49%
    • Loan Amount: $5,000-$100,000
    • Term: Two to seven years
    • Minimum Credit Score: Not specified

Why We Chose It: SoFi offers loans with no fees and chances for discounts. Enrolling in Direct Pay gets you an extra 0.25% APR discount.

Debt Consolidation Loans
A happy woman doing household budget at her cozy home.

Upstart

  • Highlights:
    • APR: Varies by state
    • Loan Amount: $1,000-$50,000
    • Term: 36 to 60 months
    • Minimum Credit Score: Not specified

Why We Chose It: Upstart considers factors beyond your credit score, like your employment history and education. They offer pre-approval with a soft credit pull.

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What is a debt consolidation loan?

A debt consolidation loan lets you refinance and combine multiple debts into one loan. This loan usually has a fixed rate and simplifies monthly payments.

How do debt consolidation loans work?

Debt consolidation loans combine your debts into one lower-interest loan. Your credit score and debt-to-income ratio will affect your rate.

Do debt consolidation loans hurt your credit?

Applying for new credit can temporarily drop your score. But paying off debts with a consolidation loan can improve your score over time.

Pros and cons of debt consolidation

Debt consolidation can save you money on interest and simplify finances, but it’s not for everyone. Consider the pros and cons:

  • Pros:
    • Improved credit score
    • Faster debt payoff
    • Easier budgeting
  • Cons:
    • High-interest rates
    • Doesn’t fix spending habits
    • Fees

Is a debt consolidation loan right for you?

Debt consolidation loans are best if you can get better rates and terms than your current debts. Those with low credit may need to look at other options.

How to get a debt consolidation loan

  1. Check your credit.
  2. Add up your debt and current interest rates.
  3. Compare lenders, rates, terms, and fees.
  4. Use a loan calculator.
  5. Choose a lender with better rates and terms.
  6. Consider a co-signer if needed.
  7. Apply for the loan.
  8. Read the fine print.
  9. Use the loan to pay your debts.

How to get a debt consolidation loan with bad credit

  • Get a secured loan: Use collateral to increase approval chances.
  • Add a co-signer: A co-signer with good credit can help.
  • Work with a credit counseling agency: They can help negotiate better terms.

How to choose the best debt consolidation loan

Consider interest rates, fees, and loan terms when choosing a debt consolidation loan.

Interest rates

  • Look for APRs lower than your current rates.
  • Your rate depends on your credit score and income.

Fees

  • Lender fees can include origination, late payment, and prepayment penalties.
  • Compare fees across lenders.

Loan terms and repayment options

  • Repayment terms range from one to seven years.
  • Some lenders pay creditors directly.
  • Look for perks like credit score monitoring.
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Alternatives to debt consolidation loans

If you can’t get a good rate, consider other options:

Debt management

Credit counseling agencies offer debt management plans to help you get out of debt and improve your financial habits.

Debt settlement

Negotiate with creditors to pay less than what you owe. This can hurt your credit but might be necessary if consolidation loans aren’t an option.

Negotiating with your creditors

Some creditors offer hardship programs to lower interest rates or payments. Negotiating directly can be time-consuming but effective.

Home equity loans and HELOCs

Borrow against your home equity to consolidate debts. This can offer lower rates but puts your home at risk.

Bankruptcy

A last resort that severely impacts your credit. Chapter 7 and Chapter 13 bankruptcies offer different ways to manage debt.

Debt Consolidation Loans FAQs

What is debt consolidation?

Debt consolidation combines multiple debts into a single loan with a lower interest rate.

Is debt consolidation a good idea?

Debt consolidation can be good if you get a lower interest rate and have good credit.

How does debt consolidation work?

It combines your debts into one loan with a lower interest rate, saving you money on interest.

Do debt consolidation loans hurt your credit?

They can temporarily lower your score, but paying off debts can improve it over time.

What is the best debt consolidation company?

It depends on your needs. LightStream is great for large loans, PenFed for small loans, and Fiona for comparing lenders.

How We Chose the Best Debt Consolidation Loans

We looked at:

  • Rates
  • Variety of loan terms
  • Customer service
  • Easy application process
  • Few or no fees

Summary of Best Debt Consolidation Loans of July 2024

Listed alphabetically:

  • Accredited Debt Relief – Best Debt Settlement Service
  • Achieve – Best Online Quote
  • Avant – Best Financial Resources
  • Best Egg – Best for Easy Application
  • Discover – Best for Credit Card Debt
  • Fiona – Best for Comparing Lenders
  • Happy Money – Best for Multiple Options
  • LightStream – Best for Large Loans
  • OneMain Financial – Best for In-Person Service
  • PenFed – Best for Small Loans
  • SoFi – Best for No Fees
  • Upstart – Best for Flexible Qualification

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