You might have debts spread across multiple credit cards or other types of high-interest debt, such as those stemming from a home improvement project or unexpected medical expenses. Given the decline in interest rates, this could be an opportune moment to consider obtaining a personal loan for consolidating these various debt sources into a single balance.
Through securing a personal loan for debt consolidation, you can potentially reduce both your monthly payments and the overall cost by circumventing multiple interest rates and late fees. As of the third quarter of 2022, the average credit card interest rate stood at 18.43%, whereas the average interest rate for a 24-month personal loan was 10.16%, as per recent data from the Federal Reserve.
If you determine that debt consolidation is the appropriate course of action, it’s vital to diligently explore options for the most suitable type of personal loan, lowest interest rates, and favorable terms. Fortunately, Credible simplifies this process by facilitating easy comparisons of loan rates and various lending companies.
9 Top Debt Consolidation Loan Lenders
1、Avant
Best for: Individuals with a lower credit score Avant, an online lending platform, is ideal for those embarking on their careers, offering modest requirements for qualification. Applicants must have a minimum credit score of 580 and an annual income of at least $24,000. Avant facilitates quick funding and imposes no prepayment penalties. However, it’s important to note that Avant charges an origination fee of up to 4.75%. Additionally, its services are not available in certain states, including Colorado, Connecticut, Hawaii, Louisiana, Nevada, New York, South Carolina, Vermont, and West Virginia.
2、Axos Bank
Best for: Borrowers with good credit seeking prompt funding For individuals with good or excellent credit, Axos Bank is a viable choice, providing unsecured loans with a range of terms. Axos imposes no prepayment penalties, and the funding process is expedited. However, borrowers with a substantial amount of debt for refinancing might need to explore further options, as Axos caps loans at $35,000, which is comparatively lower. The lender mandates a minimum credit score of 740, potentially excluding some applicants. Axos Bank conducts a soft credit check and offers terms of up to five years, with no prepayment penalties.
3、Happy Money (Formerly Payoff)
Best for: Debt consolidation loans suitable for borrowers not in immediate need of funds For those grappling with diverse forms of debt, Happy Money (formerly Payoff) is a lender worth considering. It specializes in debt consolidation, exclusively offering loans for this purpose. The lender provides competitive interest rates and does not impose prepayment penalties.
4、LightStream
Best for: Obtaining substantial loan amounts LightStream, the online lending arm of SunTrust Bank, caters to qualified borrowers by offering high loan limits. This feature is particularly beneficial for individuals dealing with debt amounts as significant as $100,000. The lender does not levy any fees, and the funding process is swift. However, LightStream does not openly disclose its minimum income requirement, posing a challenge in determining qualification criteria. Additionally, loans are unavailable for residents of Rhode Island and Vermont.
5、Marcus
Best for: Absence of fees Marcus distinguishes itself by providing prospective borrowers with ample information upfront, aiding in pre-assessment for qualification. To be eligible, borrowers need a minimum annual income of $30,000 and a credit score of 660. The lender stands out for not imposing any fees and expediting funding compared to certain other institutions. Moreover, Marcus operates nationwide, encompassing all 50 states, U.S. territories, protectorates, and armed forces abroad.
6、Prosper
Best for: Borrowers with modest income Prosper operates as a distinct type of lender, utilizing a peer-to-peer platform that connects borrowers with investors. Upon listing your loan, investors have the option to commit funding to it. If the full loan amount is not achieved within 14 days, the loan doesn’t proceed. A key advantage of Prosper is its lack of a minimum income requirement, with a minimum credit score of just 640 being necessary.
7、SoFi
Best suited for: High-credit-score borrowers SoFi stands as a viable choice for individuals burdened by a significant amount of debt. It provides loan options extending up to $100,000 for individuals boasting good or excellent credit scores. In addition to loan services, SoFi extends benefits to its customers, encompassing career coaching and exclusive members-only events. Remarkably, the lender refrains from imposing fees on its loans.
8、Upgrade
Best suited for: Borrowers aiming to enhance their credit profile For individuals with fair credit, Upgrade presents an appealing option. This online lending platform sets a relatively lenient credit score requirement at 600, making it accessible to a broader range of borrowers. Furthermore, Upgrade offers an array of tools intended to assist in safeguarding and elevating your credit standing. These include free credit monitoring, alerts, and financial education resources.
9、Upstart
Best suited for: Borrowers with a solid educational or professional background Upstart operates as an online lending platform that facilitates loans through its network of lending partners. The evaluation process involves a non-intrusive assessment of your credit score, referred to as a “soft check”. Additionally, the lender takes into account your educational qualifications, field of study, and employment history, making it particularly advantageous for college students and graduates. It’s important to note that Upstart imposes a relatively high origination fee, reaching up to 8%. Moreover, the lender does not provide borrowers with any discount incentives, such as those offered for setting up automatic payments. The loan terms provided by Upstart typically span from three to five years, and the lender refrains from applying a prepayment penalty.