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A loan can sometimes be the best way to finally conquer debt. Below are a few of the best debt consolidation loans available today.

If you’re struggling with debt and hoping to tackle it more effectively, a debt consolidation loan might be able to help you gain control of the situation. With a debt consolidation loan, you can pay off your smaller loans with a larger loan. In some cases, you might even be able to get a lower interest rate and save money.

Depending on the situation, here are some of the best debt consolidation loans available.

5 Best Debt Consolidation Loans

Low Fees: Marcus by Goldman Sachs

Goldman Sachs offers a retail bank, Marcus, that also offers personal loans. There are no origination fees with this loan — and no late fees. However, you do need to have a relatively good credit score in order to qualify. You can receive funds in one to four business days.


  • Loan amount: $3,500 – $40,000
  • APR: 6.99% – 19.99%
  • Loan terms: 3 to 6 years
  • Origination fee: None

Consolidate Credit Card Debt: Payoff

If your focus is credit card bills, Payoff can be a solid choice. Payoff helps you put together a debt repayment plan and then can also help you with a debt consolidation loan. Rates are fairly low and you can qualify with a credit score as low as 640.


  • Loan amount: $5,000 – $40,000
  • APR: 5.99% – 24.99%
  • Loan terms: 2 to 5 years
  • Origination fee: 0% to 5% of the loan amount

Visit Payoff

Large Debt Consolidation: SoFi

For those with a large amount of debt and relatively good credit, SoFi can provide you with a way to consolidate and create a paydown plan. On top of offering loans of up to $100,000, SoFi also offers unemployment protection and perks like special events and career coaching.


  • Loan amount: $5,000 – $100,000
  • APR: 5.99% – 18.28% (with autopay)
  • Loan terms: 2 to 7 years
  • Origination fee: None

Visit SoFi

Low Interest Rates: LightStream

If you’re looking for a debt consolidation loan with low rates, LightStream can make it happen. Like SoFi, you can borrow up to $100,000 if you have excellent credit. LightStream also has a repayment period extending to seven years. However, LightStream doesn’t have the extras that you see with SoFi.


  • Loan amount: $5,000 – $100,000
  • APR: 5.95% – 17.99% (with autopay)
  • Loan terms: 2 to 7 years
  • Origination fee: None

Visit LightStream

Bad Credit: Avant

For those with less-than-perfect credit, Avant might be a way to get a debt consolidation loan and begin moving forward. Additionally, there’s a low minimum to borrow, although Avant has relatively high potential origination fees.


  • Loan amount: $2,000 – $35,000
  • APR: 9.95% – 35.99%
  • Loan terms: 2 to 5 years
  • Origination fee: Up to 4.75% of the loan amount

Visit Avant

What is Debt Consolidation?

With debt consolidation, the idea is to get all of your debts in one place. You make one payment each month. When possible, it’s also best if you can get a lower interest rate so that more of each payment goes toward reducing your principal. If you have high-interest debt, too often your ability to pay it off is slowed down by the fact that you have to pay interest.

There are different types of debt consolidation including:

  • Personal loan: These debt consolidation loans are unsecured. You can get a large enough loan to pay off your smaller debts and then concentrate on this one loan.
  • Credit card balance transfer: If you can qualify for a 0% APR credit card balance transfer, you can pay off smaller credit card amounts, and then tackle your debt during the introductory period.
  • HELOC: For those with enough equity in their homes, it can make sense to get a home equity loan or line of credit and use that to pay off high-interest debt. Interest rates can be lower. However, it’s important to remember that now you’re securing unsecured debt with your home and if you make a mistake, you could lose your house.
  • Debt consolidation program: This isn’t usually a loan. Instead, you work with a third party. They take one payment from you each month and then pay your creditors on your behalf. These programs usually charge fees, but they might be able to help you create a plan and pay off your debt faster.

Learn More:

Who is it For?

Debt consolidation can work for those who feel like they are struggling to manage all of their payments. When you have multiple debt payments, it can feel like you never make progress. So much of your payment each month goes to interest and you might have a hard time keeping track of all the bills.

With debt consolidation, you can get everything in one place. Rather than trying to keep track of multiple payments, you only have to make one payment each month. Additionally, if you get a lower interest rate, more of each payment goes toward getting rid of the principal and getting you out of debt faster.

Debt consolidation is likely to work best for someone who still has relatively good credit and can qualify for a personal loan. In order to be effective at debt consolidation, you need to have a payoff plan and be committed to not getting into more debt.

How to Choose the Right One for You

Deciding on the right type of debt consolidation depends on your individual situation.

For example, if you have relatively good credit and an income that qualifies you for a personal loan, you might be able to consolidate your debt with a reputable company and have your debt paid off in between two and seven years.

On the other hand, maybe you have a lot of equity in your home and it makes sense to get a home equity line of credit. The payments are a little more flexible with a HELOC, and you might also get a lower interest rate. However, you need to be careful because you don’t want to lose your home. With unsecured debt, like credit card debt, your creditors have a much harder time taking your assets. Turn that into secured debt with your home, and you could lose it.

Also, think about which companies might work best for you. If you have good credit, and a lot of debt, you might be able to get a large debt consolidation loan with SoFi or LightStream at a relatively low rate. If you want the added protection of an unemployment forbearance program, SoFi might work. On the other hand, if you have questionable credit, you might need to turn to a lender like Avant in order to qualify and get a debt consolidation loan.

In the end, the best debt consolidation loan or option is what works for you. Carefully consider your situation and consider consulting with a professional to ensure that you make the choice that works best for your individual situation.

Related: What is a Good Interest Rate for a Loan?

How to Avoid Debt Consolidation Scams

It’s important to watch out for debt consolidation scams. These are scams that claim to be able to help you, but in the end, can make things worse. Here are some of the red flags to watch for:

  • Asks for fees upfront: Watch out for companies that ask for fees upfront, before they do work. Some lenders might have an origination fee or administrative fees, but these are only charged after you’re approved for the loan. Some debt consolidation programs might charge a monthly fee. Watch out for anyone who asks for fees before they do anything.
  • Guarantees to get rid of your debt altogether: This is likely a debt settlement company, and not a debt consolidation program. Watch out for debt settlement schemes because they can initially destroy your credit and can be very expensive.
  • Tells you to ignore creditors: Communication is key when taking care of debt consolidation. Watch out for a company that tells you to ignore creditors. This is a red flag that they might be trying to settle your debt instead.

Be careful about who you work with. In general, debt consolidation loans should be from reputable lenders. If you want to get help managing your debt or finding a reputable debt management program, start with the National Foundation for Credit Counseling, who can direct you to certified people and programs in your area.

Alternatives to Debt Consolidation

There are some alternatives to using debt consolidation as a way to manage your debt:

  • Create your own debt repayment plan: Rather than consolidating, you can use the debt snowball or avalanche method to create your own debt repayment plan.
  • Debt settlement: With this option, you try to get your creditors to accept a payment plan or lump sum for less than you owe. You can negotiate this yourself or get a company to do it for you. This will initially destroy your credit.
  • Bankruptcy: Often, this is a last resort. If you just can’t pay your bills, declaring bankruptcy can help you put together a plan or get back on your feet and start again. The credit consequences with bankruptcy are quite large.

Debt Consolidation Loan FAQs

If you want one of the best debt consolidation loans, there are a few things to consider. Here are some of the answers to the most pressing questions.

Depending on the lender, and your qualifications, you can usually consolidate between $2,000 and $100,000. However, many programs have a limit of $35,000 to $40,000.
Whether you need good credit depends on the program or lender. You’ll get the best terms if you have good credit. There are debt consolidation loans and programs aimed at those with less-than-perfect credit, however.
A debt consolidation loan is a type of personal loan. If you get an unsecured debt consolidation loan, it’s a type of personal loan, and you can usually go through a reputable personal lender to get one.
Yes, it’s possible to use a secured loan to consolidate your debt. In fact, if you get a HELOC or home equity loan, you’re using a secured loan. You can use other secured loans, such as car title loans or secure a loan with your savings account, but this comes with risk. Anytime you use a secured loan for debt consolidation, you run the risk of losing the asset if you can’t make payments.
It depends. If you can get a lower interest rate on your debts, debt consolidation can save you a lot of money over time. However, it’s important to note that you’re more likely to get a better interest rate and save money if you have good credit.

Bottom Line

Debt consolidation loans can be a helpful way to begin chipping away at debt but they’re not for everyone. It’s important to carefully consider your ability to manage the loan and pay it off on time. If you find a debt consolidation loan isn’t right for you, check out the alternative options listed above.

Remember, if this decision becomes overwhelming, you can always seek assistance with the National Foundation for Credit Counseling. For some, this type of one-on-one counseling can ease a lot of stress by answering your questions and helping you form a plan of action. That, of course, the is the most important takeaway–choose an action plan and use it to attack your debt.


Find the Best Debt Consolidation Loan for You


Author Bio

Total Articles: 94
Miranda Marquit is a nationally-recognized financial writer and money expert. She has contributed to NPR, Marketwatch, Yahoo! Finance, U.S. News & World Report, FOX Business, The Hill and numerous other publications. Miranda is an avid podcaster and writes about money and freelancing at her website, MirandaMarquit.com. She lives in Idaho and loves reading, board games, travel, the outdoors and spending time with her son.

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