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If your desk is awash with monthly bills, you're not alone. In fact, the latest research from The Ascent shows that the average unsecured loan balance is $9,896.
One of the smartest financial moves to make is getting the best debt consolidation loan, especially if you want a lower interest rate or to combine multiples debt payments into one.
You’re clicks away from finding the right loan. Answer a few questions and start comparing real offers from multiple lenders within minutes. This won’t impact your credit.
|Lending Partner||Min. Credit Score||Loan Amounts||Apr Range||Next Steps|
2023 Award Winner
Rating image, 4.5 out of 5 stars.
|Min. Credit Score: 580||Loan Amounts: $1,000 - $50,000||APR Range: 8.49%- 35.99% APR|
Rating image, 4.0 out of 5 stars.
|Min. Credit Score: 660||Loan Amounts: $5,000 - $100,000||APR Range: 8.99%-25.49% (w/ AutoPay)*|
2023 Award Winner
SoFi Personal Loans
Rating image, 5.0 out of 5 stars.
|Min. Credit Score: 680||Loan Amounts: $5,000 - $100,000||APR Range: Fixed: 8.99%-25.81% APR (with all discounts)|
Rating image, 4.0 out of 5 stars.
|Min. Credit Score: 600||Loan Amounts: $1,000 - $40,000||APR Range: 9.57% - 36.00%|
Rating image, 4.0 out of 5 stars.
|Min. Credit Score: 640||Loan Amounts: $2,000 to $45,000; min. $5,001 in Ohio||APR Range: 9.116% to 29.99%||
Rates quoted are with AutoPay. Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). AutoPay discount is only available when selected prior to loan funding. Rates without AutoPay are 0.50% points higher. To obtain a loan, you must complete an application on LightStream.com which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $10,000 loan at 8.49% APR with a term of 5 years would result in 60 monthly payments of $205.12. ?Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. Truist Bank is an Equal Housing Lender. ? 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.
Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.49%-35.99%. All personal loans have a 1.85% to 9.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.?Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at?https://www.upgrade.com/bank-partners/.?
*SoFi Personal Loan Disclaimer
Fixed?rates?from 8.99% APR to 25.81% APR reflect the 0.25% autopay interest?rate?discount and a 0.25% direct deposit interest?rate?discount. SoFi?rate?ranges are current as of 05/19/23 and are subject to change without notice. Not all applicants qualify for the lowest?rate. Lowest?rates?reserved for the most creditworthy borrowers. Your actual?rate?will be within the range of?rates?listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors.
Loan?amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly?rate?and reflects both your interest?rate?and an origination fee of 0%-6%, which will be deducted from any?loan?proceeds you receive.
Autopay: The SoFi 0.25% autopay interest?rate?reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.?Autopay is not required to receive a?loan?from SoFi.
The following payment example depicts the APR, monthly payment and total payments made during the life of a personal loan with a single disbursement. All loan rates below are shown with the autopay discount (0.25%) and direct deposit discount (0.25%). The monthly payment for a?$30,000?loan with a 60-month term and a fixed?annual percentage rate (APR) between 12.95% – 25.03%?would be?$681.82 – $881.07?in monthly payments, with total payments between?$40,909.47? – $52,864.05. Your actual interest rate may be different than the loan interest rates in these examples and will be based on term of loan, your financial history, and other factors, including your cosigner’s (if any) financial history. Lowest rates reserved for the most creditworthy borrowers. See SoFi.com/eligibilityfor details.
Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest?rate?reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your?Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account.?You are not required to enroll in direct deposits to receive a?Loan.
When you're looking to consolidate debt, Upgrade is worth a closer look. Let's say you have a bunch of little charges, spread across several credit cards (darn you, Starbucks!). Upgrade provides personal loans as small as $1,000. If the idea of debt that minor sounds like bliss because high-interest credit has you by the neck, loans up to $50,000 are available to qualified applicants.
Once approved and papers have been signed, the funds will hit a borrower's bank account within four days (often sooner). Terms stretch from two to seven years, allowing you more control over the monthly payment. However, no cosigners are allowed, which is a bummer if your credit score has taken a nosedive. Plus, if your credit score is on the low end, origination fees up to 9.99% can be costly. Once an application is made, Upgrade conducts a soft credit check, which means your credit score won't get dinged.
Upgrade offers one of the longest repayment terms in the personal loan business.
In debt but still rocking a (fairly) healthy credit score? LightStream personal loans are available from $5,000 to $100,000, with no origination fees or prepayment penalties. Loan terms ranging from 24 to 48 months allow you to control your monthly payment to some degree. Although you'll need a credit score of 660 or greater, LightStream does allow co-applicants (yes!). If you've been approved for a personal loan by another lender, LightStream will beat that lender's rate by 0.1%.
Because there are no origination fees, LightStream loans cost less than most loans. One thing that sets LightStream apart is that it allows an applicant to bring a co-applicant who may have a higher credit score.
SoFi requires a good credit score of 680 or higher. However, if you qualify, the lender offers some pretty attractive benefits, including loan amounts from $5,000 to $100,000. You can also bring a co-borrower if you don't qualify on your own. In addition to same-day funding, SoFi offers unemployment protection if you lose your job and making loan payments is off the table for a while. The lender also considers alternative sources to determine creditworthiness for borrowers who haven't had time to build a long credit history. Unlike many lenders, SoFi charges no origination fee or prepayment penalty.
SoFi's unemployment protection can be a lifesaver for a borrower who loses their job. Once a job loss has been reported, the lender will put payments on pause for up to three months at a time.
LendingClub is a fintech company working with a network of investors. These investors are specifically looking for people they can loan money to. Loans are available from $1,000 to $40,000, with terms of 36 or 60 months. Because it's a network of investors, there's a good chance you will find funding.
Sorry to sound like a broken record here, but if you have a low credit score you're going to get bonked with a much higher interest rate than borrowers with strong credit. If you have a high credit score, you may be better off borrowing from a lender that doesn't charge fees. LendingClub origination fees run from 3% to 6%. That's money you could keep in your bank account.
What sets LendingClub apart from its competitors is the fact that investors choose which loans they want to fund. And because lenders know they can charge a borrower with a relatively low credit score a higher interest rate, those applicants are more likely to receive funding.
Did you know that Rocket offers more than home loans? Yep. Rocket also provides personal loans, ideal for consolidating the high-interest debt that's weighing you down. If your credit score is 640 or higher you are eligible to apply for a loan ranging from $2,000 to $45,000. The fly in the ointment is that you could face an origination fee as high as 7% (can you tell we truly dislike origination fees?). Repayment terms are either 36 or 60 months, and you can expect same-day loan approval. You may even receive same-day funding.
Rocket is one of the rare lenders that may be able to provide same-day funding.
Yes, there are consolidation loans available if you have bad credit. Here are a few extra steps you can take to increase your chances of getting approved:
For more information, check out our list of best personal loans for bad credit.
|Lending Partner||Min. Credit Score||Loan Amounts||APR Range||Best For|
|Upgrade||580||$1,000 - $50,000||8.49%- 35.99% APR||Debt consolidation and fair credit|
|LightStream||660||$5,000 - $100,000||8.99%-25.49% (w/ AutoPay)*||Borrowers with good credit|
|SoFi Personal Loans||680||$5,000 - $100,000||Fixed: 8.99%-25.81% APR (with all discounts)||Low APR for borrowers with high income|
|LendingClub||600||$1,000 - $40,000||9.57% - 36.00%||Low APR for borrowers with good to excellent credit scores|
|Rocket Loans||640||$2,000 to $45,000; min. $5,001 in Ohio||9.116% to 29.99%||Flexible personal loans|
It can be easy to confuse refinancing and consolidating, but they are two different strategies meant to accomplish the same goal -- to become debt free.
Credit card refinancing involves transferring your credit card balance to a card with a lower interest rate (more on this in a moment). Debt consolidation streamlines multiple debt payments into a single payment, using a personal loan.
A debt consolidation program can save you money and time. Here are a few other benefits:
Most financial decisions, including personal loans for debt consolidation, have pros and cons. Here are some drawbacks:
If you're getting ready to apply for a debt consolidation loan, start by outlining your current monthly expenses and income. Then, estimate how much you can put toward a loan payment each month. (Remember, the loan payment will replace some of your other debt payments.) That way, you'll know ahead of time what size loan payment is best for you -- and you can confidently work toward paying off that debt.
Personal loans for debt consolidation can be a great way to meet your financial goals, but they're not the only option. Here are some alternatives to a debt consolidation loan:
A balance transfer card offers an introductory rate, most often a 0% APR for a set time period (typically 12 to 21 months). You apply online, give the new credit card company a list of the balances you want to be transferred, and wait to hear back from it. Transfer fees usually range from 3% and 5% of the balance transferred. But beware: The card's interest rate will rise dramatically as soon as the intro period ends. You should plan to pay the card off in full before then.
If you owe less on your home than it's worth, that means you have equity and can borrow against it. If you use a home equity loan for debt consolidation, you'll owe your mortgage lender instead of your other creditors (like credit card issuers). The interest rate might be lower on a home equity loan than you'd pay on a credit card or personal loan. The danger is that you could lose your home if you miss payments.
While the best move with a 401(k) plan -- or any other retirement plan -- is to leave it alone and let it grow, some plans do allow for borrowing. You don't have to worry about your credit score when borrowing from your 401(k) because no credit check is required. A 401(k) loan generally lets you borrow 50% of your 401(k) balance or $50,000, whichever is less (with some exceptions). When you take out a 401(k) loan, you pay interest to yourself by putting your interest payments back into your retirement account. However, if you don't pay back the loan within five years, you will owe income tax and a penalty of 10%.
A debt consolidation loan is a loan used to pay off other debt. It usually has a lower interest rate than other debt (like credit card debt). You can also use it to pay off multiple debts -- for example, multiple credit cards or loans. Then, you have only one debt payment to remember instead of several.
Your credit score could climb. Consolidating debt leaves you with more available credit (for example, paid off credit cards). As long as you don't add charges to the cards you just paid off, the "debt utilization" portion of your credit score improves. In addition, making monthly payments on time helps boost your score.
The credit score required to consolidate debt depends on the lender. Some lenders that cater to those with poor credit consider applicants with scores as low as 560-580.
How much debt you can consolidate depends on a number of factors, including your credit history and income.
Ramsey is not a fan of debt consolidation loans, believing that it will take you longer to repay the debt. In his opinion, the longer it takes you to repay the loan, the more interest you'll pay.
We recommend you take Ramsey's advice on this topic with a grain of salt. Crunch the numbers to determine how long it will take you to pay off existing debt at the rate you're paying. Then, find out how much a consolidation loan will cost you monthly. Finally, compare the total interest paid in both scenarios.
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