10 Best Debt Consolidation Loans for 2023

Have you been struggling to deal with credit card debt that never seems to go away? If so, a debt consolidation loan can offer a way out.

It won’t make your debt go away, but it will help it become more manageable. And by setting up the right loan, you can be debt-free in a few short years.

To help you in your search for the right loan, we prepared this guide on the 10 best consolidation loans for 2023.

The table below provides a summary of the main features offered by each lender. You can then scroll down and read our summary reviews with more information on each lender that may interest you.

Our Picks for Best Debt Consolidation Loans

Here is our list of the 10 best debt consolidation loan lenders of 2023:

• LendingTree: Best Lender Selection

• Credible: Lowest Rates

• LendingClub: Best for Peer-to-Peer Loans

• SoFi: Best for Comprehensive Financial Services

• Upstart: Best for Fair Credit

• Even: Best for High Loan Amounts

• LightStream: Best for Good to Excellent Credit

• Marcus by Goldman Sachs: Best for Investing

• Best Egg: Best for Good Customer Service

• Happy Money (formerly Payoff): Best for High DTI Ratios

Below are our summary reviews for each.

Best Debt Consolidation Loans – Company Reviews

Minimum/Maximum Loan Amount: $1,000 to $100,000
Interest Rate Range: 4.37% to 35.99% APR
Fees: 0% to 10%
Loan Terms: 24 to 144 months
Minimum Credit Score: 585

LendingTree is an online loan marketplace offering mortgages, auto loans, and credit cards. For debt consolidation, you can apply for a personal loan from $1,000 to $100,000, with terms ranging from two years to 12 years.

The big advantage of LendingTree is that you can get loan quotes from at least 11 personal loan lenders at the same time. Participating lenders are some of the biggest in the industry, and even include some of the lenders in this guide.

Minimum/Maximum Loan Amount: $600 to $100,000
Interest Rate Range: 5.40% to 35.99% APR
Fees: Varies by lender
Loan Terms: 24 to 84 months
Minimum Credit Score: 585

Much like LendingTree, Credible is an online loan marketplace. Not only do they offer personal loans, mortgages, and credit cards, but also student loans and student loan refinancing.

Personal loans are available for debt consolidation in amounts up to $100,000 and with terms as long as 84 months. Credible advertises the lowest interest rates of all lenders on this list. A total of 17 lenders offering personal loans participate on the platform.

Credible has a special offer for personal loan applicants; if they can’t find you the best personal loan rate available, they’ll give you $200.

Minimum/Maximum Loan Amount: $1,000 to $40,000
Interest Rate Range: 7.04% to 35.89% APR
Fees: 3% to 6%
Loan Terms: 36 or 60 months
Minimum Credit Score: Not disclosed

LendingClub is a peer-to-peer loan platform that brings together borrowers applying for loans that are funded by investors participating in the platform.

You can apply for up to $40,000, with a loan term of either three years or five years. All loans are fixed-rate and will be fully repaid at the end of the term.

LendingClub is one of the biggest lenders in the personal loan space, having provided more than $60 billion in financing. It also provides business loans, medical loans (patient solutions), and auto refinancing loans.

Minimum/Maximum Loan Amount: $5,000 to $100,000
Interest Rate Range: 5.74% to 20.28% APR
Fees: None
Loan Terms: 24 to 84 months
Minimum Credit Score: 680

SoFi began as a service providing student loan refinancing. But it has since expanded, and now provides comprehensive financial services that include investments, banking, credit cards, insurance, and even credit scores and budgeting. The platform boasts more than 3.5 million members.

SoFi personal loans are designed primarily for those with good or excellent credit. If you qualify, you can borrow up to $100,000 for as long as 84 months. And you can do it all with no loan fees!

Minimum/Maximum Loan Amount: $1,000 to $50,000
Interest Rate Range: 3.09% to 35.99% APR
Fees: 0% to 8%
Loan Terms: 36 or 60 months
Minimum Credit Score: 600

Upstart offers several different loan options, including auto loan refinances, medical loans, home improvement loans, and personal loans for debt consolidation.

You can borrow up to $50,000 with rates starting as low as 3.09% APR (Annual Percentage Rate). The minimum credit score at 600, will accommodate borrowers with average or fair credit.

Like many other personal loan lenders, loan terms come in two sizes: 36 months and 60 months. This lender also has potentially steep loan fees, with an origination fee as high as 8%.

That could mean a $4,000 fee on a $50,000 loan, giving you net proceeds of only $46,000.

Minimum/Maximum Loan Amount: $1,000 to $100,000
Interest Rate Range: 4.99% to 35.99% APR
Fees: Varies by lender
Loan Terms: 24 to 84 months
Minimum Credit Score: Varies by lender

Even is a financial services platform that offers personal loans for just about any purpose. You can borrow up to $100,000, with rates starting at 4.99% APR and terms ranging from 24 to 84 months.

Like some of the other lenders in this guide, Even is an online loan marketplace. By completing a single online application, you’ll get rate quotes from multiple lenders. This gives you an opportunity to choose the loan that will work best for you.

Minimum/Maximum Loan Amount: $5,000 to $100,000
Interest Rate Range: 2.99% to 19.99% APR
Fees: None
Loan Terms: 24 to 144 months
Minimum Credit Score: High, but not specified

LightStream is the online personal loan program for Truist Bank (formerly SunTrust). The company is a direct lender, offering personal loans up to $100,000 for just about any purpose. They charge low rates, with terms as long as 144 months.

LightStream will work best for those with good or excellent credit, as their credit requirements are steep.

Not only do they require an excellent payment history with no delinquencies, but also a proven ability to save money in the form of bank deposits, stocks, real estate, retirement, and other assets, as well as a solid credit history.

Minimum/Maximum Loan Amount: $3,500 to $40,000
Interest Rate Range: 6.99% to 19.99% APR
Fees: None
Loan Terms: 36 to 72 months
Minimum Credit Score: 660

Marcus by Goldman Sachs is a direct lender that not only offers personal loans but also savings accounts, investments, and credit cards.

Personal loans are available in amounts up to $40,000, with rates starting as low as 6.99% APR. Not only do they charge no fees in connection with their personal loans, but there are also no late fees.

The minimum credit score requirement of 660 means you will need at least average credit to qualify. This is not a lender for consumers with fair or poor credit.

Minimum/Maximum Loan Amount: $2,000 to $50,000
Interest Rate Range: 5.99% to 35.99% APR
Fees: 0.99% to 5.99%
Loan Terms: 36 or 60 months
Minimum Credit Score: 600

While Best Egg provides personal loans for debt consolidation, the company is now expanding into offering credit cards.

Personal loans are available in amounts up to $50,000, with interest rates starting as low as 5.99% APR, in terms of 36 or 60 months. The company has already provided more than $10 billion in personal loans to consumers.

Best Egg is a direct lender, with loans provided by New Jersey-based Cross River Bank. Though the minimum credit score requirement is 600, the company requires a minimum individual income of $100,000.

Minimum/Maximum Loan Amount: $5,000 to $40,000
Interest Rate Range: 5.99% to 24.99% APR
Fees: 0% to 5%
Loan Terms: 24 or 60 months
Minimum Credit Score: 640

Happy Money is a direct online lender providing personal loans. However, those loans are available only for debt consolidation. They will not be available for major expenses, like a wedding or an upcoming vacation.

Loans are available in amounts up to $40,000, with rates as low as 5.99% APR. You’ll have a choice on the loan term of either 24 or 60 months. But expect to pay an origination fee as high as 5%.

Debt Consolidation Guide

What Is Debt Consolidation?

Ultimately, debt consolidation is both a way to get out of debt and an opportunity to lower your total monthly payments.

Debt consolidation doesn’t lower the total amount of existing debt you owe or your overall credit utilization. Instead, it rolls several loans into one, with a single loan balance and one monthly payment.

Just by consolidating several loans into one single installment loan, you may be able to benefit from a lower interest rate or more manageable repayment terms.

That can translate into a lower monthly payment. And since debt consolidation loans are typically structured with a fixed rate and term, the consolidated debt will be fully repaid at the end of the term.

This can be especially beneficial with high-interest debt, such as that of credit cards, or for unsecured debt.

The most basic reason why it’s so hard to get out of credit card debt is because of its revolving nature. As you pay down, the monthly payment drops.

And when you use the card for additional purchases, the balance increases. That also raises your credit card payment.

But by paying off the credit card debt with a consolidation loan, the loan — which includes your credit card debt — will be fully repaid after just three to five years.

If you ever wonder if I should consolidate my debt, crunch the numbers and see how it can work with your credit card debt.

How Do Debt Consolidation Loans Work?

Debt consolidation loans are essentially unsecured loans that offer a fixed interest rate and term. The combination makes it possible to eliminate the consolidated debt within a very specific time frame.

Debt consolidation loans can range anywhere from 24 months to as long as 84 months, though it’s possible to extend that out to 144 months (12 years) through a lender like LightStream.

Debt consolidation loans are typically offered in the form of personal loans. These work especially well for debt consolidation since they can be used for just about any purpose, from medical bills to credit card consolidation.

While most usually deposit the loan funds into the borrower’s bank account directly, some pay the money out directly to the lenders.

The interest rate you’ll pay on a debt consolidation loan will depend on a mix of factors, including your credit score, your debt-to-income ratio, and the amount borrowed.

Debt consolidation is one of the most simple ways to improve debt management skills. At a minimum, it enables you to reduce the number of monthly loan payments. That by itself can give you better control over your debts.

Does Debt Consolidation Affect My Credit Score or Monthly Payments?

Yes, on both counts! Let’s look at credit scores first.

One of the factors credit bureaus consider when calculating your credit score is the number of loans and credit lines with outstanding balances.

When you use a debt consolidation loan to roll multiple debts into a single loan, the number of outstanding debts declines immediately.

Something else happens as well, at least when you’re consolidating credit cards. The credit bureaus consider installment debt, which is typically what debt consolidation loans are, to be less risky than revolving debt.

In fact, revolving debt is considered the riskiest debt of all. By eliminating it through a debt consolidation loan, you’ll have another factor working in your favor towards improving a bad credit score and increasing your overall creditworthiness.

Many people who do debt consolidation loans experience an immediate increase in their credit scores for the reasons described above, even despite the drop from the credit inquiry your lender makes.

It will help to know what a good credit score is so you can track any positive changes in your score after taking the loan.

A debt consolidation loan can also affect your monthly payments. If the monthly payment on the consolidation loan is lower than the total of the payments on the loans you’re paying off, your net monthly payment will drop.

What Are the Risks Behind Debt Consolidation Loans?

As good as a debt consolidation loan sounds, you will need to avoid debt consolidation pitfalls.

Probably the most common is when you set up a debt consolidation loan and then continue borrowing more money.

That’s an easy trap to fall into because the debt consolidation loan can seem like a get-out-of-jail-free card. But rest assured, it’s not. If you continue with this pattern, you’ll end up with a bunch of new debt on top of your debt consolidation loan.

Another potential pitfall is not getting full control of your budget after a debt consolidation loan.

You should think of a debt consolidation loan as a financial instrument designed to help you deal with past financial mistakes, like overspending.

But if you continue to overspend, which will likely result in new debt, the debt consolidation effort will be a failure.

How to Qualify for a Debt Consolidation Loan?

How to get a personal loan approved involves a series of steps. These will center around your credit score, debt-to-income ratio, and the amount of money you borrow.

Many lenders will assign you a credit grade based on a combination of the three. The higher your grade, the lower the rate you’ll pay, and vice versa.

Your debt-to-income ratio, which is simply your monthly recurring debts divided by your stable monthly income, indicates how well the new loan will fit within your budget.

The lower your debt ratio—say, less than 30%—the better your loan grade will be. A high ratio (exceeding 40%) will indicate a higher risk factor, contributing to a lower grade.

The same is true with the loan amount you borrow. A $50,000 loan will be considered a bigger risk to the lender than a $15,000 loan. Your loan grade may be lower if you take a larger loan amount.

Most important is your credit score. As you can see from the lenders included in this guide, a credit score of at least 680 will get you a lower interest rate.

Below 680, you will see you paying at the upper end of the interest rate range. For this reason, it will be important to improve your credit score, even to apply for a debt consolidation loan.

Get a copy of your credit report and concentrate on fixing errors on your credit report.

But if your credit score is much below 650, it may be time to look into using the services of one of the best credit repair services. It could mean the difference between a 10% interest rate and 20% or 30%.

Some lenders may allow you to access a better rate or up your potential eligibility by taking out the loan with a co-signer with better credit.

How We Found the Best Debt Consolidation Loans

To come up with this list of the 10 best debt consolidation loans for 2023, we used the following criteria:

• The minimum and maximum loan amounts offered

• The interest rate range advertised by the lender

• Any and all fees a lender may charge, including prepayment

• penalties, origination fees, and application fees

• Loan terms offered

• Minimum credit score requirements

Above and beyond these five factors, we also considered company reputation, popularity with consumers, and any special features or additional services each offers.

Summary of the Best Debt Consolidation Loans

Let’s recap the 10 best debt consolidation loans for 2023:

• LendingTree: Best Lender Selection

• Credible: Lowest Rates

• LendingClub: Best for Peer-to-Peer Loans

• SoFi: Best for Comprehensive Financial Services

• Upstart: Best for Fair Credit

• Even: Best for High Loan Amounts

• LightStream: Best for Good to Excellent Credit

• Marcus by Goldman Sachs: Best for Investing

• Best Egg: Best for Good Customer Service

• Happy Money (formerly Payoff): Best for High DTI Ratios

If you’re drowning in credit card debt, a debt consolidation loan may be the right strategy for you. It’s the perfect way for you to get off the revolving debt treadmill.

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