Top Loan Providers for Debt Consolidation
If a personal loan is the right idea for you, then get the best rates, repayment terms, and benefits from the leading lenders in the industry. Here are the top picks for personal loans in 2020:
|Minimum credit score: 680|
APR range: 3.49%-35.99%
|Minimum credit score: none|
APR range: 3.99% - 35.99%
|Minimum credit score: 620|
APR range: 7.99% - 35.97%
When to Consolidate Your Debt with a Personal Loan
Consolidating your debt via a personal loan can be a good idea in the following situations:
- You want to pay a lower interest rate
The best way to alleviate debt is to pay it off responsibly one month at a time. Unfortunately, too many people are struggling with high interest rates that don't let them get ahead of their debt. Lowering your interest rate can help you put more money towards your actual debt and eventually pay it off.
- You have several debt payments to make each month
Paying off multiple credit cards each month can be difficult. Combining your debt into one simple payment makes it much easier to manage your monthly debt expenses and stay on top of your finances in general.
- You’re working with lousy terms
If you are digging yourself deeper into debt because of high monthly payments that you can’t meet, a personal loan can help you pay less each month. It might take longer to pay off the debt, but at least you’ll be making consistent monthly payments, instead of racking up more debt.
Do the Math First
The most important question for you to ask is, will this loan save you money? Pay attention to the fees and rates that are being offered, so you don't get stuck with a bigger problem even than you started with. Here's an example of how a personal loan can help with your debt consolidation:
Let’s say you have a combined credit card debt of $10,000. You are currently paying 15% interest on that debt. Over approximately 4 and a half years, you’ll pay $3,750 in interest! Now, let's say you lower your interest to 10% for a 2-year loan. By the end of this loan term, you'll have paid out $1,075. That's a $2,675 savings in interest payments for the same $10,000 debt that you’ve now paid off.
- Minimum credit score: 680
- APR range: 3.49%-35.99%
Why go with Credible? Credible is an entirely free loan brokerage service designed with borrowers with good to high credit in mind. If you’re looking to consolidate debt, Credible has great terms and rates that can save you tons of money, pairing you with the right lender for your situation. You’ll get up to 6 preliminary offers after a soft credit check, allowing you to choose which lender you’d like to apply to. Responses are super-speedy, which means the ball is always in your court. There’s a large range of loan amounts and only one application for multiple lenders, making it easy to get what you’re looking for without too much paperwork or hassle. Final details will vary by lender, but with Credible’s range, you are sure to get a loan that works for your debt consolidation.
- Minimum credit score: None
- APR range: 3.99% - 35.99%
Why go with AmOne? AmOne is another established marketplace lender with a huge range of loan terms and amounts, making it a great option for anyone seeking to compare various loan offers. There’s a simple application that connects you to a broad network of well-respected lenders, letting you choose the best match for you. It’s a great network if you’re looking to consolidate debt quickly, because the approval process is smooth and fee-free. You can complete the loan application without any commitment to borrow funds. There is a really strong array of educational resources, articles and flexible loan purposes, so you can make confident, knowledgeable decisions for almost any kind of debt consolidation. AmOne doesn’t share personal data with unauthorized third parties, and everything you share is encrypted with industry-standard methods and protocols.
- Minimum credit score: 620
- APR range: 7.99% - 35.97%
Why go with Upgrade? This direct lender offers personal loans for a variety of loan purposes, such as debt consolidation, financing a home improvement project, or making a large purchase. The online application is quick, with pre-approval in only minutes. There are some added advantages too, like free credit monitoring and financial-education resources. If you’re tech-savvy and ready to fund your debt consolidation online, this BBB A+ rated company can give you the loan support you’re looking for, all from your living room couch. You won’t be able to borrow any secured loans through Upgrade though, so expect strictly unsecured personal loans from this lender. Not sure you’ll get approved? Upgrade has a credit-health tracker completely for free with no commitments, so you can use it any time to know what kind of rate quote you can expect.
Going with a reputable lender is the first step in the right direction towards paying off your debt responsibly. Here are a few more tips for debt consolidation ease:
1. Make your payments every month and on time. The worst thing you can do after taking out a loan to consolidate debt is to be delinquent with the payments. Pay on time, and watch your debt shrink and your credit score rise.
2. Read online reviews. By reading reviews of the top loan companies, you'll to get a better feel for the type of lender you’re getting into bed with. Advertisements can be hyped up, but real user testimonials tell you the true story.
3. Make sure you find a lender that will give you a lower APR than you are currently paying. Otherwise, it doesn’t pay to consolidate your debt. Since there is competition in the industry, this shouldn't be too hard. What’s more, you can usually get other benefits thrown into the deal.
4. Look for lenders that won’t hurt your credit with a hard pull. Many top name lenders will only do a soft credit pull when you apply and this helps because it means your credit score won’t be affected and you’ll have more options when consolidating your debt.
Still can't decide? Feel free to check out our comparison chart to discover the best personal loan providers.