The Best Debt Consolidation Loans

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Taking out a personal loan is a great way to consolidate your debt down to one payment. Even through the current pandemic financial institutions are still looking to get you the personal loan you need.

It is no surprise that they are still offering personal loans either. In fact there is an increase in personal loan balances that show this type of loan offer is sticking around.

The biggest problem with this is now finding the right loan for you. Every bank is different and every loan they offer is also different. From interest rates to loan terms, from flexibility to other fees, there is a lot to take into account when looking for your loan.

With his in mind, we have put together this list to not only help you figure out what you are looking for, but also, who to turn to for your perfect loan to consolidate your debt.

Here are The Smart Investor Select’s picks for the top debt consolidation loans:


Payoff Personal Loan Review

On Payoff Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

As its name suggests, Payoff Loans offers debt consolidation for borrowers with good credit. This is solely to repay existing debt, including credit cards.

Although Payoff does not force you to pay your credit card debt, they make this recommendation to keep your finance on track. This includes quizzes to assess your financial abilities and resources to help you reach your financial goals.

According to Payoff, this insight empowers borrowers to continue making smart financial decisions.

  • Interest Rate Range: 5.99%-24.99%
  • Minimum credit score: 640
  • Terms: 24 - 60 months
  • Loan Amount: $5,000 – $35,000
  • Origination Fee: 0% to 5%
  • Funding: 2-5 days
  • Debt to Income Ratio: 50% or less
  • Free Credit Monitoring
  • Competitive Rates
  • Easy Application
  • Flexible Payments
  • Soft Pull Inquiry
  • No Late Fees
  • Soft Pull Inquiry
  • Limited Use
  • Origination Fee
  • Pre-Approval Does Not Mean Approval
  • Higher Minimum Amount
  • No Joint Applicants
  • Not Available in All States


Upstart Personal Loan Review

On Upstart Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

Upstart is a unique lender created in 2012 by a group of former Google executives. They are the first lending platform to use artificial intelligence with an automated lending process. 

Most lenders primarily focus on a FICO score to approve a loan. However, Upstart uses its advanced technologies to look beyond this and explore the risk of your loan. These calculations are used to assess your ability to repay your loan.

The company has a strong belief that if lenders would use its intuitive credit model, they would probably be approving more loans. For borrowers, this means that Upstart can offer high-quality loans. With fair terms for borrowers with bad credit, Upstart has a strong reputation with excellent reviews on Trustpilot and other sites.

  • Interest Rate Range: 8.89% - 35.99%
  • Minimum credit score: 620
  • Terms: 36-60 Months
  • Loan Amount: $1,000 - $50,000
  • Minimum Annual Income: $12,000
  • Funding: 1-2 Days
  • Debt To Income Ratio: Less Than 45%
  • Soft Pull Inquiry
  • Good for Borrowers with Limited Credit Histories
  • Modest Income
  • Quick Turnaround Times
  • No Prepayment Penalty
  • No Processing Fee
  • Higher low end rates for those with excellent credit
  • Origination Fee
  • No Joint Borrowers
  • High Interest Rates
  • New Company
  • Not Available in All States

Lending Point

LendingPoint Personal Loan Review

On LendingClub Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

Lending Point is based in Kennesaw, Georgia. This online lender offers a competitive option for those with fair credit. Where Lending Point stands apart from many lenders is that you can qualify for a loan if your credit score is 585 or above. The company will also consider other factors to establish your eligibility including income, financial history, job history, overall credit behavior.

Lending Point does not have prepayment fees, but there is a potentially costly origination fee. This can be zero to 6% depending on your location. There is also a $30 late payment fee, applied after a 15 day grace period.

  • Interest Rate Range: 15.49% – 35.99%
  • Minimum credit score: 600
  • Terms: 24 to 48 months
  • Loan Amount: $2,000 – $25,000
  • Origination Fee: 0%-6%
  • Minimum Income: $20,000 annually
  • Funding: Typically 1 day
  • Quick Turnaround Times
  • Soft Pull Inquiry
  • Good for borrowers with poor credit
  • Flexible repayments
  • No Prepayment Penalty
  • Smaller max amount
  • Origination Fee
  • High Rates
  • Large late payment fee
  • Not Available in All States

Best Egg

Best Egg Personal Loan Review

On Best Egg Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

Best Egg offers personal loans for almost any purpose. You can use the proceeds of your loan to pay for home repairs, make a large purchase, refinance your credit card debt or consolidate existing debt. Over half a million Best Egg customers have borrowed over $9.3 billion.

If you have good credit, you can expect a very low interest rate, and loan processing is fast, taking just a few minutes to complete.

  • Interest Rate Range: 5.99% – 29.99%
  • Minimum credit score: 640
  • Terms: 36-60 months
  • Loan Amount: $2,000 -$35,000
  • Origination Fee: 0.99% – 5.99%
  • Soft Pull Inquiry
  • Competitive Rates
  • Simple Application Process
  • Quick Turnaround Times
  • No Prepayment Penalty
  • No Joint Applicants
  • Origination Fee
  • Large Amounts on Short Terms
  • Investing Restrictions
  • Not Available in All States


Lightstream Personal Loan Review

On Lightstream Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

Lightstream is an online lender that offers very high loan amounts yet at low interest rates. LightStream is part of the Truist Bank group, formerly the SunTrust Bank. The loans are not specific to tuition, and you can use them for any purpose, including home improvements, debt consolidation, etc.

LightStream does not charge fees. So, there are no late payment fees, processing fees, or pre payment fees. Most of the loans have a term of two to seven years, but this may be extended to 12 years for solar financing, home improvement loans, or swimming pool loans. 

  • Interest Rate Range: 3.34% – 16.99%
  • Minimum credit score: 660
  • Terms: 24 to 84 months
  • Debt to income ratio: 50% or less
  • Discount: 0.5% for auto pay
  • Time to funding: As soon as same day, within 30 days of approval
  • No Fees
  • Flexible Term Options
  • Competitive Rates
  • Many Loan Uses
  • Joint Applicants
  • High Maximum Amount
  • Not For Bad Credit Borrowers
  • No Soft Pull
  • Restrictions for Business Use
  • Stipulations


Avant personal loan review

On Avant Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

Avant is one of the largest online lenders, focusing on those with very low credit scores. This is a Chicago based company, and most of its client base is middle class Americans.

You can use your loan for any purpose, including covering unexpected expenses, consolidating debt, or home improvements. Avant also has a solid customer service system with a 24/7 telephone line and impressive response times for customer problems.

To qualify, you must have paid current liabilities for a minimum of six years.

  • Interest Rate Range: 9.95% - 35.99%
  • Minimum credit score: 580
  • Terms: 24-60 Months
  • Loan Amount: $2,000 - $35,000
  • Origination Fee: up to 4.75%
  • Funding: 30 days from issued funds
  • Soft Pull Inquiry
  • Quick turnaround times
  • Good For Bad Credit
  • Late Fee Forgiveness
  • No Prepayment Penalty
  • Higher Interest Rates
  • Administration Fee
  • Not For Business Use
  • Not Available in All States


Marcus Personal Loan Review

On Marcus Secure Website

  • Overview
  • Loan Details
  • Pros & Cons

Marcus is an online only lender offered by Goldman Sachs. It offers personal loans with no fees including late fees, prepayment fees or sign up fees. Since you’re only required to pay the principal loan sum and interest, the interest rates are a little higher than the competition. However, this can be a good option for those with a good credit score who want to avoid annoying fees.

Where Marcus personal loans are a little different is that there is the option of prequalification. If you’re not sure if you will be eligible for a loan, you can complete a basic, short form. This only involves a soft check, so you can avoid triggering a hard credit check and potentially compromising your credit score. Prequalification will allow you to check and compare your Marcus loan options.

  • Interest Rate Range: 6.99% – 24.99%
  • Minimum credit score: 660
  • Terms: 36-72 months
  • Loan Amount: $3,500 – $40,000
  • Origination Fee: None
  • Funding: 1 to 4 days
  • No Fees
  • Competitive Rates
  • One Time Payment Deferment
  • Simple Application Process
  • Soft Pull Inquiry
  • More than One Loan
  • Multiple Loan Options
  • High Requirements
  • Not for Limited Credit
  • Pre-Approval Does Not Mean Approval
  • Limits on Loan Amount for Loan Use
  • No Joint Applicants
  • Not Available in All States

Factors To Choose When Shopping Around

When considering a debt consolidation loan, here are the main factors you should take into account:

1. Interest Rate

The first thing you need to know is the interest rate of your loan.

When you’re applying for any loan it’s one of the first things that you’re going to ask about. Having great credit is going to help you with this process. You’ll be able to get a better interest rate and you’ll have a better chance of getting approved at the same time.

Now, when you start shopping around to different lenders look at these ratings. They will tell you how much it’s going to cost for you to get that particular loan. You will want to look at APR and APY at the same time. This is going to help you figure out the best possible balance for your loan. After all, it’s going to help you keep your costs down.

2. Fees

Next up are the fees that are associated with your debt consolidation. You could have a lot of fees associated with a loan or you could have a few. They could be large or small. In fact, some of them you might not even notice because they’re so small. But with everything from processing fees to origination fees and application fees you could definitely be ‘fee-d’ to death.

Not to mention if you end up late at any point you could be charged penalties. And if those fees and penalties put you over your limit you could be charged fees for that too. So, make sure that you’re fully aware of what you’re getting into and what type of fees you’re going to be charged.

3. Terms

The terms mean how long you’re going to have that loan for. What length of time do you have to pay everything back? Make sure you know exactly when the money is due and also that you’re being realistic about how much money you take out.

If you take out too much you may not be able to pay it back in time. You may end up with very large payments that you can’t make throughout the loan term.

How To Increase Chances Of Pre-Approval

When your credit is not too high, you might face issues when applying for a debt consolidation loan. Here are a couple of ways that can help you to increase your chances to get the loan:

Get Multiple Quotes

One of the first things you should do is get at least three quotes.

That means you don’t just go to your own lender. You also want to go to other places. And you want to use the lower of those quotes to get the offer you want at the place you want to go to.

But remember, lower interest is only part of it. You also want to look at terms, fees and anything else associated with that new loan.

Know What You Need

Make sure you’re prepared with everything you’re going to need when it comes time to apply.

Which paperwork do you need to have to fill out the paperwork or turn into your lender? Having a list of all of those documents can make it easier for you to get through the process. And you can do it much faster this way as well.

Slow Down Your Applications

You want to slow down the speed at which you’re getting those quotes.

If you’re applying for too many loans all at once it looks like you’re in financial trouble. That’s going to look bad when it comes to your second or third applications. Instead, you want to make sure that each loan company thinks they’re the only one that you’re going to. This improves your chances of getting approved.

Don’t Just Sit Back and Wait

Make sure you’re asking questions. You want to know about different loan packages and different options. You want to know exactly what you’re going to need to apply for the loan. Also, you want to know all of the details about that loan.

So, make sure you ask questions of the lender. Find out how long the process will take, what you need and anything else you can. The more you know the faster everything else will go.

Know Your Limitations

Talk to the lender before you start this process to find out more about what you could be eligible for. Don’t try to get a loan for an amount that you’re never going to get. If you know you have great credit history and a stellar store you may be able to  get a higher loan amount and better terms. If you know your credit history is spotty or your score is less than ideal you should know what the options are for you.

Getting a copy of your credit report ahead of time is a good way to make sure you’re prepared.

This will give you time to correct any mistakes on the report and to evaluate it. That way you know what you should be able to get and what you likely aren’t able to. Also, make sure that you know what you can afford to pay each month. If you can’t afford to make the payments you’re going to be in even bigger trouble moving forward.

Improve Your Score

Getting your credit score is actually simple and you can do it for free on several websites. But once you know that score you also want to work on improving it. Those with excellent credit, in the mid to high 700’s or above, don’t need to worry about increasing their score. In general these scores are all treated the same by the lender.

If you have a lower score you could make a big impact on your offerings. If you’re really close to breaking into the next bracket this is even more important. For example, going from poor to good or good to very good. These classifications will help improve your loan offer.

Making sure each of your bills is paid on time and lowering the amount of debt you currently have will help you to improve your score.

So will getting rid of any false information that’s currently on your report. You want to make sure you have everything up-to-date and accurate.

Should I Consolidate My Debt?

This is going to depend on a few different factors. In general, debt can be made a bit easier to handle by going with debt consolidation, but that’s not always the case. Not everyone does better with this sort of approach.

One Payment Per Month

One of the biggest benefits you’re going to have is only a single payment each month. This is compared to the large number of payments you could have with individual debts. This makes it easier to keep track of over time.

Easy to Apply

If you do decide to apply for a consolidation loan it’s actually quite simple to do.

Just about any financial institution handles them and they will generally make it as simple as possible. You don’t have a lot of paperwork and you don’t have to wait a long time to find out if you’re approved. In fact, you may even be approved right then and there.

This makes it a lot easier than other types of loans.

Low Interest

You’re not guaranteed to get a low interest rate and this will depend on your institution and your credit, but these types of loans generally have far lower interest than your credit cards or whatever type of debt you’re trying to consolidate.

You want to know that for sure, however. So make sure you compare your current rates with the rates you’re being offered. That’s especially true for credit card balance transfers with short intro periods.

Risk of Cycling Debt

One of the biggest drawbacks and dangers with this type of loan is that you’re clearing off all of your other debt and replacing it with a new debt.

For some, this could actually put them in danger of getting right back into the same debt again. The problem is that you’ll actually be in twice as much trouble. Home equity loans make this even more dangerous and could put you in a dire financial situation. Plus you’re at risk of losing your home or you’re going to have a larger mortgage than the home may be worth.

Longer-Term Interest

You may pay less interest every month with a debt consolidation, but you could end up paying more overall depending on the type of loan you get. You could end up with a home equity loan that makes you pay more for your debt over that term of 30 or more years than you would otherwise.

Alternatives To Debt Consolidation Loan

Let’s say you don’t want to consolidate your loans. Then what can you do? Well, there are several different options. It all depends on what kind of debt-to-income ratio you have as well as the credit score you have. For those who have a great credit score, you can make the most of consolidation. But there are other options.

Balance Transfer

If you don’t want to or can’t do a debt consolidation loan but you do want to get all of your debt together this is a great way to go. If you can get a 0% interest transfer you will then transfer all of the debt to it. This means you can save money on interest over the life of the debt. Just keep in mind that you have to pay the debt off before the promo period ends.

Keep in mind that you’re going to be offered a short term low-interest rate. It might be 0% or it might be up to 5%, but it’s only going to last for a certain amount of time. You want to make sure you know how to pay off everything within that period of time because it’s going to save you money. By taking advantage of the no-interest portion of the exchange you can join all of your debts together and get all of the same benefits as a consolidation loan.

Home Equity Loan

This is also known as a second mortgage, and it’s something important to consider.

Now, with this type of loan you’re going to work with a lender and take out a loan. But your home is going to be the collateral for it. This can be a big risk for some people because you want to make sure you don’t lose your house. You could end up losing your home and still being in a great deal of debt if you’re not careful here.

In order to get this type of loan you generally need good credit and equity built into your home.

You need to be able to get a good amount back. You also need to get a low-interest rate on the loan. This is going to help you pay off as much as possible though it’s going to reduce your equity in your home.

Now, make sure you’re going to be able to make the payments on this type of loan. If you don’t make those payments you’re going to end up in foreclosure. If you’ve ever seen this happen to someone else you definitely know how horrible it can be. Still, this type of loan can be great because you have very low interest. You just need to make sure you know what you’re trading in and what you’re going to be risking overall.

401k Loan

Now, this is not exactly the same as a traditional loan. When you take a 401k loan,  you’re going to be the one who decides to take the money out and you take whatever you want (to an extent). From there you have to pay the money back as quickly as you can. That’s because you’re taking retirement funds out of your account and that costs a lot of money. You can only take up to 50% of the vested money or $50,000. You get the lesser of those two and then you’ll have to pay it all back within a period of five years.

If you don’t pay it back in five years you’ll end up with even larger fees and fines.

At least, unless you get an extension through your employer. These only apply for specific situations. For example, if you use it as a down payment on a house you may be able to get an extension on paying back the money that you borrow. You’ll also have an interest rate that has nothing to do with your overall credit score.