Top 10 Debt Consolidation Loan Providers
By Lucy Chen | Published: 2024-03-15 | Category: Debt Consolidation Loans
About Debt Consolidation Loans
Debt consolidation loans combine multiple debts into a single, new loan, often with a lower interest rate or monthly payment. This simplifies repayment and can potentially save money on interest charges.
How We Evaluated
Providers were evaluated based on APR competitiveness, loan flexibility (amounts and terms), fee structures, borrower eligibility requirements, and overall customer experience. Scores reflect a comparative analysis across these key factors.
Rating Criteria
- → APR Competitiveness
- → Loan Flexibility
- → Fee Structure
- → Borrower Eligibility
- → Customer Experience
The Best Debt Consolidation Loans
Prosper
Visit Website →One of the first peer-to-peer lending platforms in the US, connecting borrowers needing personal loans (often for debt consolidation) with investors.
Target Audience
Fair Credit (Typically 640+), Good Credit, Excellent Credit
Service Offerings
Personal Loan
Fixed-rate, unsecured loans funded by individual or institutional investors.
- Loan amounts: $2,000 - $50,000
- Repayment terms: 2 - 5 years
- Joint applications accepted
Scorecard (Overall: 6.2 / 10.0)
Pricing Model
APR Range
APRs vary based on Prosper Rating (creditworthiness).
Origination Fee
Charges an origination fee (1% to 7.99% of loan amount), deducted from proceeds.
Other Fees
Charges late fees and failed payment fees. No prepayment penalties.
Pros
- + Accepts joint applications
- + Considers borrowers with fair credit
- + Soft credit check for pre-qualification
- + Established P2P platform history
Cons
- - Charges origination fees
- - Charges late and failed payment fees
- - Longer funding time compared to some direct lenders
- - No direct payment to creditors option
- - Limited repayment term options (max 5 years)
Verdict
"A peer-to-peer option for borrowers with fair or better credit, especially if applying with a co-borrower, but watch out for fees and potentially slower funding."
LendingClub
Visit Website →Pioneering peer-to-peer lender, now a bank, offering personal loans for various purposes, including debt consolidation, funded by investors or the bank itself.
Target Audience
Fair Credit (600+), Good Credit, Excellent Credit
Service Offerings
Personal Loan
Fixed-rate loans often used for consolidating debt or major purchases.
- Loan amounts: $1,000 - $40,000
- Repayment terms: 2 - 5 years
- Direct payment to creditors option available
- Joint applications accepted
Scorecard (Overall: 6.6 / 10.0)
Pricing Model
APR Range
Wide range of APRs based on creditworthiness and loan grade.
Origination Fee
Charges an origination fee (3% to 8% of loan amount), deducted from proceeds.
Other Fees
Charges late fees. No prepayment penalties.
Pros
- + Accepts borrowers with fair credit
- + Direct payment to creditors option
- + Allows co-borrowers (joint applications)
- + Low minimum loan amount
- + Soft credit check for pre-qualification
Cons
- - Charges origination fees
- - APRs can be high for less qualified borrowers
- - Charges late fees
- - Limited maximum repayment term (5 years)
Verdict
"A long-standing platform suitable for fair-to-good credit borrowers, offering helpful features like co-borrowers and direct creditor payments, but with origination fees."
Avant
Visit Website →Online platform offering personal loans targeted towards borrowers with fair-to-average credit scores.
Target Audience
Fair Credit (Around 580+), Average Credit
Service Offerings
Debt Consolidation Loan
Unsecured personal loans designed to help consolidate existing debts.
- Loan amounts: $2,000 - $35,000
- Repayment terms: 2 - 5 years
- Fast funding possible (as soon as next business day)
Scorecard (Overall: 5.6 / 10.0)
Pricing Model
APR Range
APRs are generally higher, reflecting the target audience's credit profile.
Origination Fee
Charges an 'administration fee' (up to 9.99%), similar to an origination fee, deducted from proceeds.
Other Fees
Charges late fees and dishonored payment fees. No prepayment penalties.
Pros
- + Accessible to borrowers with lower credit scores (fair credit)
- + Fast funding timeline
- + Mobile app available
- + Soft credit check for pre-qualification
Cons
- - High APRs
- - Charges administration (origination) fees
- - Charges late and dishonored payment fees
- - Lower maximum loan amount
- - No direct payment to creditors option
Verdict
"A potential option for borrowers with fair or lower credit who struggle to qualify elsewhere, but be prepared for higher costs and fees."
Discover Personal Loans
Visit Website →Well-known financial services company offering no-fee personal loans, including for debt consolidation, often requiring good credit.
Target Audience
Good Credit (Typically 660+), Excellent Credit
Service Offerings
Debt Consolidation Loan
Fixed-rate personal loans with no origination fees.
- Loan amounts: $2,500 - $40,000
- Repayment terms: 3 - 7 years
- Direct payment to creditors option available
- Potential for same-day decision
Scorecard (Overall: 7.8 / 10.0)
Pricing Model
APR Range
Competitive fixed APRs.
Origination Fee
No origination fees.
Other Fees
No prepayment penalties. May charge late fees.
Pros
- + No origination fees
- + Direct payment to creditors option
- + Flexible repayment terms (up to 7 years)
- + Reputable company with strong customer support
- + Soft credit check for pre-qualification
Cons
- - Requires good credit
- - Lower maximum loan amount than some competitors
- - No co-signers or joint applicants
- - May charge late fees
Verdict
"A reliable no-fee loan option from a trusted brand, suitable for borrowers with good credit who value customer service and direct creditor payments."
Best Egg
Visit Website →Online lender focused on providing fast personal loans, often for debt consolidation, to borrowers primarily with good-to-excellent credit.
Target Audience
Good Credit (640+), Excellent Credit
Service Offerings
Personal Loan
Fixed-rate personal loans frequently used for debt consolidation.
- Loan amounts: $2,000 - $50,000
- Repayment terms: 3 - 5 years
- Direct payment to creditors option available
Scorecard (Overall: 7.0 / 10.0)
Pricing Model
APR Range
Competitive rates for stronger credit profiles.
Origination Fee
Charges an origination fee (0.99% to 8.99% of loan amount), deducted from proceeds.
Other Fees
May charge late fees. No prepayment penalties.
Pros
- + Fast funding possible (next business day)
- + Direct payment to creditors option
- + Good customer service ratings
- + Soft credit check for pre-qualification
Cons
- - Charges origination fees
- - Requires good credit for approval and best rates
- - Limited repayment term options
Verdict
"A solid choice for borrowers with good credit seeking fast funding and direct creditor payments, provided they accept the origination fee."
Upstart
Visit Website →AI-powered lending platform that considers factors beyond credit score, potentially helping borrowers with limited credit history or fair credit.
Target Audience
Fair Credit (Potentially below 600 with other factors), Good Credit, Borrowers with limited credit history, Students/Recent Graduates
Service Offerings
Personal Loan
Unsecured personal loans often used for debt consolidation, leveraging AI for underwriting.
- Loan amounts: $1,000 - $50,000
- Repayment terms: 3 or 5 years
- Considers education and job history in approval
Scorecard (Overall: 6.4 / 10.0)
Pricing Model
APR Range
Very wide APR range reflecting diverse borrower profiles. Can be high.
Origination Fee
Charges an origination fee (0% to 12% of loan amount), deducted from proceeds.
Other Fees
May charge late fees. No prepayment penalties.
Pros
- + Considers factors beyond credit score (AI underwriting)
- + Accessible to borrowers with fair or limited credit history
- + Low minimum loan amount
- + Fast funding possible
- + Soft credit check for pre-qualification
Cons
- - Charges origination fees, which can be high
- - Limited repayment term options (3 or 5 years)
- - Maximum loan amount lower than some competitors
- - Not available in West Virginia or Iowa
Verdict
"Best for borrowers with fair or thin credit files who benefit from alternative underwriting criteria, despite potential fees and higher APRs."
Upgrade
Visit Website →Fintech company providing accessible personal loans, often to borrowers with fair credit, along with credit monitoring and educational tools.
Target Audience
Fair Credit (600+), Good Credit, Near-prime borrowers
Service Offerings
Personal Loan for Debt Consolidation
Fixed-rate personal loans, often used for consolidating credit card debt.
- Loan amounts: $1,000 - $50,000
- Repayment terms: 2 - 7 years
- Direct payment to creditors option available
- Joint applications accepted
Scorecard (Overall: 7.0 / 10.0)
Pricing Model
APR Range
Wide range of APRs, accommodating borrowers across the credit spectrum. Lower rates require good credit.
Origination Fee
Charges an origination fee (typically 1.85% to 9.99% of loan amount), deducted from proceeds.
Other Fees
May charge late fees. No prepayment penalties.
Pros
- + Accepts borrowers with fair credit
- + Direct payment to creditors option
- + Joint applications allowed
- + Fast funding possible
- + Offers credit monitoring tools
Cons
- - Charges origination fees
- - APRs can be high for lower credit scores
- - May charge late fees
Verdict
"A good option for borrowers with fair-to-good credit who may not qualify elsewhere, offering useful features like direct creditor payments."
Marcus by Goldman Sachs
Visit Website →Consumer banking arm of Goldman Sachs, offering fixed-rate, no-fee personal loans primarily for debt consolidation and home improvement.
Target Audience
Good Credit (660+), Excellent Credit
Service Offerings
Debt Consolidation Loan
Unsecured personal loans with fixed rates and terms.
- Loan amounts: $3,500 - $40,000
- Repayment terms: 3 - 6 years
- Direct payment to up to 10 creditors available
- On-time payment reward (defer one payment after 12 consecutive on-time payments)
Scorecard (Overall: 8.0 / 10.0)
Pricing Model
APR Range
Competitive fixed APRs. Requires good credit.
Origination Fee
No origination fees.
Other Fees
No prepayment penalties or late fees.
Pros
- + No fees (origination, prepayment, late)
- + Direct payment to creditors option
- + On-time payment reward
- + Customer support highly rated
- + Soft credit check for pre-qualification
Cons
- - Lower maximum loan amount compared to SoFi/LightStream
- - Not available in Maryland
- - No co-signers or joint applications
Verdict
"A strong no-fee option for borrowers with good credit, offering helpful features like direct creditor payments and a payment reward."
LightStream
Visit Website →Online lending division of Truist Bank, offering unsecured personal loans for various purposes, including debt consolidation, often with low rates for top-tier credit.
Target Audience
Good Credit (680+), Excellent Credit, Borrowers with established credit history
Service Offerings
Debt Consolidation Loan
Fixed-rate personal loans designed for consolidating high-interest debt.
- Loan amounts: $5,000 - $100,000
- Repayment terms: 2 - 7 years (up to 12 years for home improvement)
- Rate Beat Program (conditions apply)
Scorecard (Overall: 8.2 / 10.0)
Pricing Model
APR Range
Offers some of the lowest rates available, particularly with AutoPay discount. Requires excellent credit for best rates.
Origination Fee
No origination fees.
Other Fees
No prepayment penalties.
Pros
- + Potentially very low APRs for qualified borrowers
- + High loan maximums
- + No origination or prepayment fees
- + Fast funding possible (same day in some cases)
- + Rate Beat program
Cons
- - Strict credit requirements (good to excellent needed)
- - No pre-qualification option (hard inquiry required to see rates)
- - Loans cannot be used for student loan refinancing or business purposes
Verdict
"Top contender for borrowers with excellent credit who prioritize the absolute lowest rates and no fees."
View Top Ranked Provider
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SoFi
Visit Website →Offers competitive personal loans for debt consolidation, particularly for borrowers with good-to-excellent credit. Known for high loan amounts and no fees.
Target Audience
Good Credit (680+), Excellent Credit
Service Offerings
Personal Loan for Debt Consolidation
Unsecured personal loans usable for consolidating credit cards, personal loans, and other unsecured debts.
- Loan amounts: $5,000 - $100,000
- Repayment terms: 2 - 7 years
- Direct payment to creditors option available
Scorecard (Overall: 8.4 / 10.0)
Pricing Model
APR Range
Competitive fixed and variable rates. Exact rate depends on creditworthiness and loan terms.
Origination Fee
No origination fees charged.
Other Fees
No prepayment penalties or late fees.
Pros
- + High maximum loan amounts
- + No origination, late, or prepayment fees
- + Option for direct payment to creditors
- + Member benefits (career coaching, financial planning access)
- + Mobile app for loan management
Cons
- - Requires good to excellent credit
- - No co-signers permitted on personal loans
- - Income verification required
Verdict
"Excellent choice for borrowers with strong credit seeking large loan amounts and zero fees."
Final Recommendation
The best debt consolidation loan provider depends heavily on individual creditworthiness and priorities. Options range from no-fee lenders like SoFi and LightStream, ideal for excellent credit, to platforms like Upgrade and Upstart that cater to fair credit but often charge higher rates and fees. Consider factors like APR, fees, loan amounts, repayment terms, and features like direct creditor payment when choosing.