Best Debt Consolidation Loans in 2024

Most adults in America are dealing with a high credit card balance. A debt consolidation loan is one of the best ways to control debt. If you’re one of these Americans, you might consider personal loans to reduce the debt and help you pay it off.

Debt consolidation helps a borrower combine more than one high-interest debt into one payment. It’s essential to consider the low rates and versatile terms when choosing debt consolidation loans. Let’s look at the best personal loans for consolidation debt in 2024.

Debt Consolidation Loans: Best Offers

A debt consolidation loan combines different debts, including credit card debt, payday, and medical bills. This is paid in a single monthly payment. Under this type, the borrower will take out a new loan with flexible terms, like a lower monthly payment or a lower interest rate. You will use this to pay off other individual debts.

This is a good idea if the interest rate on the personal loan is lower than the rates on all the existing debts. It allows you to pay off your debt faster and save on interest while benefiting from the lower rate. Here are the best debt consolidation loans for 2024.

Lender Est. APR Loan Amount Minimum Credit Score Loan Terms
Marcus 6.74% – 19.74% $3,500 – $40,000 660 3 to 6 years
SoFi 7.99% – 23.43% $5,000 – $100,000 650 2 to 7 years
FreedomPlus 7.99% – 29.99% $7,500 – $40,000 620 2 to 5 years
Discover 5.99% – 24.99% $2,500 – $35,000 660 Up to 7 years
Upgrade 6.95% – 35.97% $1,000 – $50,000 560 3 to 5 years
Happy Money 5.99% – 24.99% $5,000 – $40,000 640 2 to 5 years
LendingClub 8.30% – 36% $1,000 – $40,000 600 3 to 5 years
Lightstream 3.99% – 19.99% $5,000 – $100,000 660 2 to 7 years


Marcus is the top debt consolidation provider that you can go for in 2024. It is a subsidiary of Goldman Sachs, the investment bank. The lender offers direct payment to third-party creditors for borrowers. Marcus offers its borrowers flexible payment dates, and there are no fees.


Est. APR: 6.74% – 19.74% Loan Amount: $3,500 – $40,000 Min. Credit Score: 660


  • Provides direct consolidation payments for ten third-party creditors.
  • Flexible payment dates that can change up to three times.
  • No fees for prepayment, late payment, origination, or insufficient fund.
  • Borrowers can prequalify with a soft credit pull.


  • The required credit score is 660.
  • Does not allow co-applicants.
  • Funding takes a few days before approval.


The Marcus applicants need a minimum credit score of 660, and higher scores get access to more favorable terms. Also, borrowers need an income level to cover paying back the loan.


If you think you can pay back better with flexible payment dates, you should go for the Marcus lender instead. It is a reputable lender that works with a wide range of creditors.


SoFi provides fixed-rate personal loans in every state of America except Mississippi. The online lending platform was founded in 2011 and is the ideal choice for those who want to borrow a lot of money. The repayment terms are between two and seven years, making it a flexible option for those with annual income and credit.


Est. APR: 7.99% – 23.43% Loan Amount: $5,000 – $100,000 Min. Credit Score: 650


  • Get loan funding two days after application.
  • Soft credit check in the prequalification.
  • Lengthy, flexible terms and high amounts.
  • Allows joint applications from borrowers.


  • Does not allow co-signers.
  • No direct payment to third-party creditors.
  • Difficult qualification standards.


SoFi has a minimum credit score of 650, although most borrowers have a score of 700 and more. The required annual income is $45,000, but the average income of borrowers is $100,000+.


As long as you’re not in Mississippi, you can get flexible consolidation solutions. But, you need a higher credit score and annual income to qualify for this lender.


Another top debt consolidation loan that you can choose from is from FreedomPlus. This is an indirect lending platform with personal loans underwritten by MetaBank or Cross River Bank. It was founded in 2014 and offered flexible loan terms and amounts, making consolidating a lot of debt easy.


Est. APR: 7.99% – 29.99% Loan Amount: $7,500 – $40,000 Min. Credit Score: 620


  • Flexible terms and amounts.
  • Provides funds within 48 hours.
  • Allows co-borrowers to apply.
  • Offers direct payments to creditors.


  • High minimum loan amount.
  • Applicants will have to go in person.
  • There is a minimum income requirement.


FreedomPlus requires a credit score of 620 for applicants with a gross income of $21,500. They don’t lend more than 35% of the borrower’s annual income. It also allows for co-signers and co-applicants.


You can’t borrow a small amount from FreedomPlus, but it provides flexible terms and a credit score requirement that appeals to those with fair credit. Plus, co-borrowers can apply.


Discover issues personal loans to all 50 states, extending its terms to seven years, which is longer than most options. You can decrease your debt service by paying your loan over a more extended period. It charges a late payment fee but no others and will disperse funds directly to third-party creditors.


Est. APR: 5.99% – 24.99% Loan Amount: $2,500 – $35,000 Min. Credit Score: 660


  • There is an option to pay third-party creditors directly.
  • No prepayment penalties or origination fees.
  • Easy online application and mobile banking.
  • Longer terms than other personal loans.


  • Low maximum loan amount.
  • There are late fees.


Discover requires a credit score of at least 660 and a household income of $25,000 annually. No credit history length is required, but applicants are assessed with recent credit activities.


Discover is the best choice if you want to pay your debt over a long period, although you will deal with a higher interest rate. On the downside, you can’t borrow a lot of money.


All states in America have access to Upgrade loans aside from Vermont, Iowa, and West Virginia. It was founded in 2017 and offered higher maximum interest rates than the other options on this list. Upgrade also provides to borrowers with poor credit history.


Est. APR: 6.95% – 35.97% Loan Amount: $1,000 – $50,000 Min. Credit Score: 560


  • The minimum credit score requirement is low.
  • Directly pays lenders for debt consolidation.
  • Loan proceeds can be used for business expenses.
  • No prepayment penalty.


  • Provides two loan repayment periods.
  • High APR range.
  • There are fees for origination and late payment.


Upgrade requires a credit score of at least 580 for a personal loan, ideal for those with bad credit. There isn’t a minimum income requirement, and it allows co-signers and co-borrowers.


If you have a fair credit history, which is from 580, you can consolidate debts with Upgrade. But, keep in mind that the APR goes pretty high.

Happy Money

Happy Money was founded in 2009. It is an online lending platform that provides loans in all states aside from Mississippi, Nevada, Massachusetts, and Nebraska. Happy Money helps borrowers pay off high-interest debts.


Est. APR: 5.99% – 24.99% Loan Amount: $5,000 – $40,000 Min. Credit Score: 640


  • Pays third-party creditors directly.
  • Offers a Peace program to help borrowers achieve financial wellness.
  • Competitive APRs.
  • No late or annual fees or prepayment penalties.


  • Sometimes charges an origination fee.
  • Requires a three years credit history or more.
  • Limited repayment terms.


Happy Money requires its personal loan applicants to have a credit score of 640 or more, with a minimum credit history of three years. Other requirements include a debt-to-income ratio below 50% and no current delinquencies. There is a co-signer or co-applicant option.


Borrowers with high-interest debts can rely on Happy Money, and you can get even better terms with a co-signer. But, there are a lot of requirements to keep in mind before being approved.


LendingClub is the largest online lending platform for personal loans. It is an ideal choice for peer-to-peer lending. The lender was founded in 2007 and issues loans everywhere in the US except Iowa. LendingClub pays creditors directly and is suitable for loans with high balances.


Est. APR: 8.30% – 36% Loan Amount: $1,000 – $40,000 Min. Credit Score: 600

  • It allows co-applicants to apply.
  • Will pay off third-party creditors directly.
  • Allows borrowers with low credit scores.
  • High maximum amount.


  • Higher APRs than other lenders.
  • Applies late and origination fees.
  • Restricted loan term availability.


LendingClub requires a minimum credit history and credit score of three years and 600, respectively. Applicants need a debt-to-income ratio of below 40% and 35% for single and joint applicants. Co-applicants must live in the same home.


If you have a lot of debt, you can conside using LendingClub, although the APR is a bit higher han other lenders. You and your partner can apply for better conditions.


You can apply for personal loans for debt consolidation at Lightstream, the consumer lending division of Truist. The lender provides a high maximum loan, with repayment terms as high as seven years. There are no fees, and loans are provided to Washington, D.C, and Puerto Rico.


Est. APR: 3.99% – 19.99% Loan Amount: $5,000 – $100,000 Min. Credit Score: 660

  • There are low, competitive interest rates.
  • No fees on origination, late payment, or prepayment.
  • Fast approval and funding.
  • High rate discount for autopay borrowers.


  • No flexibility for due date payment.
  • No prequalification process.
  • Restrictions on usage of the funding.


Lightstream requires applicants to have several years of credit history and a stable income. Multiple bank account types and good to excellent credit are also required. There is no chance to prequalify, and it does not allow co-signers but joint applications.


With the low rates and no fees, Lightstream is a stress-free lender to consider. But, you need to have good credit and upward for being considered.

How Do Debt Consolidation Loans Work?

Although there are different forms of debt consolidation, it generally works by using new debts to pay off current debts. Loans for debt consolidation work by taking out a personal loan and using the new funds to pay off the existing debt.

Instead of tracking multiple debt payments, you only need to make one payment on your new loan. Also, some have lower fees and interest rates than other debts, helping the borrower save money.

A personal loan is a common way to consolidate debts. Once the loan is approved, the funds will be sent to the creditors directly or given to you to pay the debt off. The loans come with fixed interest rates. You might need separate unsecured loans if you are self-employed.

What Should I Consider Before Choosing a Debt Consolidation Loan?

If you’re choosing a personal loan service, you need to consider one with a low-interest rate, flexible terms and services, and low or no fees.


There are different loan fees, including origination fees, late payments, and prepayment fees. Some personal loan lenders don’t charge fees, while others charge one or two. There might also be grace periods before charging late payment fees.

Credit Score and Other Requirements

Before applying, it’s essential to check the conditions. These include the minimum credit score, credit history, and other credit information.

How to Pay it Off

Consider lenders that provide flexible payment options via wire transfer, online, payment by phone, mobile app, and mail. Also, you might be allowed to change your due dates or get autopay discounts.

Interest Rates

An essential factor is the interest rate, including fixed and variable rates. You can check around for consolidation loans through prequalification.


The terms include the repayment period, due date, loan amount, fees, and variable or fixed monthly payment. Consider these when selecting a provider.

How to Choose a Debt Consolidation Loan?

When selecting a personal loan for consolidating debt, the process varies based on the lender. But, here are the general steps to follow:

  1. First, check your credit score by asking your credit card issuer or credit unions. This helps you determine your chances of qualifying for a debt consolidation loan.
  2. If your score is low, which is below 700, you need to boost your score. The higher your score, the better terms you can get when applying. You can pay unpaid debts or reduce credit usage to improve your score.
  3. After your credit score is settled, calculate how much money you will need to settle all your debts. Only borrow what you need since you will get the loan proceeds as a total sum and will have to pay interest.
  4. Now, you should look at the lenders available to check their interest rates and terms. Some lenders will ask you to prequalify before submitting, so you can see the terms offered without applying.
  5. Once you find a lender that meets your needs, you can apply in person or online. This can take a few hours to days, depending on the lender.

Does Debt Consolidation Hurt Your Credit?

Loans for debt consolidation will affect your credit score in different ways. The score will slightly reduce when the lender carries out a hard check on your credit report. But, this will go back to normal after a few years. Also, your credit will be affected if you get more debt on your cards after paying off your previous debt with the consolidation loan.

Refinancing is your best option to save money while consolidation is your best option for maintaining federal loan benefits.

If the funding is correctly used, you can improve your credit score as time goes on. It is an excellent way to reduce your monthly debt service, combine payments, and enhance your financial habits. So, whether debt consolidation hurts your credit depends on your actions.

Pros and Cons of Debt Consolidation Loans

There are different advantages of using these loans to take care of multiple debts, but a few downsides come with this.


  • A personal loan helps you save on interest, especially with high-interest debt. It offers lower interest rates than your other debts.
  • Reduces your monthly debt payments by helping you repay the loan over a couple of years. It adds all your debt together and enables you to pay on time.
  • It will increase the total available credit. This eventually improves your credit score.
  • It makes it easy to pay all your loans at a time without having to juggle multiple payments each month.
  • It helps you build good financial habits by repaying your loans and setting up a financial plan to service all your debts.


  • There is no guarantee that the personal loans will offer a lower interest rate than your other bills. With an extended repayment form, you will pay more interest too.
  • There might be better alternatives to the loans that offer better savings, like home equity.
  • When you merge your debt, your cards are free to use, and this causes you to accumulate even more debt.

Best Ways to Consolidate Debt

There are different ways to merge debt and make your payments much easier. The option you choose depends on your financial situation and individual, and which options are more available to you. Personal loans are the most popular way to combine debt, but you can also consider home equity, balance transfer credit cards, and 401(k) loans.

Debt Consolidation Loans

A debt consolidation loan is a common way for people to merge multiple debts. This will help you streamline all debts into one payment. You should consider this type if you have a large debt. Having only a little will not be worth the debt payment obligations. It is essential to consider the underlying problem that led to debt in the first place.


  • The loans reduce the number of interest rates and payments by streamlining finances.
  • With less interest, lack of fees, and other perks, you might pay earlier than others.
  • It could reduce the overall interest rate when your credit score has improved, helping you save money.
  • Reduces your monthly payment since all the debt is combined and spread out over a long time.


  • It could raise your interest rates, especially with a low credit score.
  • It comes with additional costs and fees sometimes.
  • It may encourage more spending.

Balance Transfer Credit Cards

Another way to consolidate credit card debt is by getting no-interest financing through balance transfer credit cards for up to 18 months. It is open to highly qualified borrowers and is the right choice when you want to avoid paying interest. Although if you have unpaid balances at the end of the month, these attract interest. If You need a short time to pay a high-interest debt and have good credit, this is open to you.


  • There is no interest as you carry your debt for a short time.
  • It merges the balance of several cards into one balance transfer credit card.
  • It decreases the credit utilization rate.
  • It can increase your credit score in the long term.


  • There are balance transfer fees as high as 5%.
  • If you don’t pay off the debt within the given period, there will be an interest on your remaining debt.
  • It reduces your credit score in the short term.

Home Equity Loans

Another option for debt consolidation is home equity loans, an ideal choice for those with enough home equity. You can consolidate your debt with your home equity, but if you fail to repay, the lender will repossess your home. They are a good choice if you know how much you want to borrow and have an actionable plan to pay it back.


  • The interest on home equity loans is as low as 5%.
  • It is easy to plan your loan payments since it is fixed.
  • The interest you pay could be tax deductible.


  • It comes with a lengthy application process.
  • There is potential for overspending.

401(k) Loans

A 401(k) loan is an excellent way to combine all your debts. In this loan, you take it out of your 401(k) account and generally have five years to repay it. You can borrow 50% of your vested account balance up to $50,000 or more than $10,000. The main reason why you should choose this is the speed and convenience it has to offer.


  • No application is required to get this.
  • It is cheaper than borrowing from a bank.
  • There is no minimum credit score required.
  • The money is not indicated as debt on your credit.


  • There is a limit to how much you can borrow.
  • If you go bankrupt, your retirement funds will longer be protected.

Alternatives to Debt Consolidation Loans

If you don’t qualify for debt consolidation or you don’t want to choose one, there are other options that you can go for.

  • Balance Transfer Credit Cards: Some credit card providers allow you to transfer all your existing credit card debt into one card with a 0% introductory APR.
  • Home Equity Loan: This is an excellent alternative to debt consolidation if you have equity in your home. You can borrow up to 85% of your equity if you have at least 20%.
  • Home Equity Line of Credit (HELOC): This is similar to the home equity loan, but this gives you funds as a credit line to use as needed rather than a lump sum payment. HELOC is a good option for homeowners.

Concluding Thoughts

If you’re looking for an efficient way to take care of your debt, consolidation loans are always a good idea. You can get started by choosing one of the top lenders on this list, and work on paying it off monthly. Debt consolidation can be beneficial to any borrower if done right.


Marcus is the most reputable debt consolidation company. Other reliable options include FreedomPlus, Upgrade, LendingClub, Discover, Happy Money, etc. When choosing a reputable lender, consider their terms and interest rate. Also, check if the payment structure is flexible.

You can use your credit card after consolidation, leading to more debt. It’s much better to pay it off entirely and then use your credit card wisely, only using what you can afford to pay off.

A debt consolidation loan usually works, especially for credit card debt and high interest. It may result in lower monthly payments and merge your finances. This makes it easier to take care of your debt.

This depends on the lender you are borrowing from. The minimum score is usually 600, although some lenders focusing on bad credit borrowers can accept a score as low as 580.