NerdWallet’s guide to the best debt consolidation loans
A closer look at our top picks
How do debt consolidation loans work?
Who can qualify for a debt consolidation loan?
How to get a debt consolidation loan with NerdWallet
Other ways to pay off high-interest debt
A closer look at our top picks
Our list includes highly-rated lenders that offer affordable debt consolidation loans. These loans come with special features to help you through the consolidation process, like fast funding, flexible terms or multiple rate discounts.
LendingClub: Best overall for debt consolidation
LendingClub takes our top spot for the best debt consolidation loan, thanks to an ideal mix of fast approval, fast funding and direct payment to creditors. Once you apply, you can get an approval decision within one hour and have the funds sent to your account in one day. And since LendingClub pays off your creditors for you, there’s no temptation to use the loan funds for something else.
SoFi: Best debt consolidation loan for good-credit borrowers
If you have strong credit — typically a 690 credit score or higher — SoFi’s debt consolidation loan is hard to beat. You can qualify for multiple rate discounts, including a 0.25 percentage point discount, just for having SoFi pay off your creditors directly. You also get access to unique perks that are hard to find with other lenders, like free financial planning.
Upgrade: Best debt consolidation loan with multiple rate discounts
Similar to SoFi, Upgrade’s debt consolidation loans include multiple ways to save money on interest. Setting up automatic monthly payments on your loan and sending the funds directly to your creditors are two easy ways to get a sizable rate reduction. Plus, Upgrade’s lower credit score requirement (600) means you can qualify even if you have fair or bad credit.
Best Egg: Best secured debt consolidation loan
Best Egg offers a rare feature among lenders: It lets you secure a debt consolidation loan with permanent fixtures in your home (think built-in cabinets or bathroom vanities). Since this helps “guarantee” the loan for the lender, you should have an easier time getting approved. If you fail to repay though, the lender can seize the collateral.
Discover: Best debt consolidation loan with fast approval and funding
Discover has one of the fastest timelines of any lender we reviewed. It can both approve your loan application and fund the loan in the same day (as long as you already have a Discover bank account). If you request a direct deposit into another account, Discover can still send the funds in one business day. That’s lightning-fast even for an online lender.
Happy Money: Best debt consolidation loan with instant pre-qualification
Most online lenders offer pre-qualification (the ability to check loan offers without hurting your credit score), but Happy Money takes it up a notch by showing you an especially detailed instant offer. This includes potential loan amount, interest rate, repayment term and monthly payment. If you move forward with your application, Happy Money does a hard credit pull, which is typical among lenders.
Achieve: Best joint debt consolidation loan
Applying for a joint loan, which is when you add another person to your application, can help you get approved if they have a stronger credit score or higher income than you do. But Achieve sweetens the deal by adding a rate discount — two percentage points, on average — specific to this type of loan. That’s unusual among the lenders we reviewed.
Universal Credit: Best debt consolidation loan for bad-credit borrowers
Universal Credit’s debt consolidation loan is an option for most borrowers, thanks to its particularly low minimum credit score requirement (560). But you won’t be settling for a second-tier product. The loans are highly customizable, with a wide range of loan amounts, direct payment to creditors and funding in one business day after you’re approved.
How do debt consolidation loans work?
Debt consolidation loans are a type of personal loan that combine multiple unsecured debts — such as credit cards, medical bills or payday loans — into one monthly payment amount, making the debt easier to pay off.
When you’re approved for a consolidation loan, the lender deposits the money in your bank account. You then use that money to pay off all your debts at once, so you’re left with only the single loan.
These loans come with fixed interest rates, so you’ll pay the same amount each month. As long as the loan’s rate is lower than the average rate across your current debts, you’ll also save money, and you may even get out of debt faster.
Terms typically range from two to seven years, though you usually can pay the loan off early with no penalty. Once the loan is paid in full, you’re officially debt-free.
Did you know? Debt consolidation loans are an especially smart choice for high-interest debt, like credit cards. According to NerdWallet’s most recent annual analysis of household debt, revolving credit card debt (meaning balances carried from month to month) has increased by almost 2% over the past year. As of March 2026, households with this type of debt now owe $10,895, on average.
Debt consolidation calculator
See if debt consolidation is for you by estimating how much you can save
Current monthly payment$1,000
Current monthly payment
With an excellent credit score, we estimate a 11.81% APR for a 5-year personal loan.
Total interest saved$2,459.92
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See an example of a debt consolidation loan
Let’s say you have $11,000 in credit card debt.
The average annual percentage rate on a credit card is about 22%. If you’re making a minimum payment of $220, at 22% APR, it’ll take you over 11 years to be debt-free. It will also cost you $19,140 in interest, on top of the original debt.
But if you pay off your credit card debt using an $11,000 debt consolidation loan, at 12% APR, you’ll save over $13,000 in interest. You’ll have a lower monthly payment (about $25 less), and you’ll get out of debt four years earlier with a seven-year repayment term.
Who can qualify for a debt consolidation loan?
Debt consolidation loans are available to borrowers across the credit spectrum, so you can still get a debt consolidation loan even if you have fair or bad credit (a 689 credit score or lower).
» COMPARE: Best debt consolidation loans for bad credit
Lenders weigh multiple factors in your loan application, including credit score, credit history, existing debt and income, to understand your financial situation.
Borrowers with good to excellent credit scores tend to see the lower rates on a debt consolidation loan, as shown by the table below.
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified for debt consolidation loans through NerdWallet in the last 30 days. Rates are estimates only and not specific to any lender.
Is now a good time to consolidate debt?
“As of June, Fed officials still haven’t lowered rates this year, but debt consolidation loans aren’t as affected by what the Fed does compared to products like mortgages. If you’re feeling overwhelmed by credit cards or other high-interest debt, it’s best to start paying it off now with a lower-rate consolidation loan than trying to perfectly time the market. Just think, whatever savings you may gain by getting a consolidation loan at a slightly lower rate will likely be wiped out by the double-digit interest you’ll pay on your credit cards in the meantime.”
How to compare loan options
To choose the best debt consolidation loan, ask yourself these five questions:
Does the lender’s loan amounts and terms match my debt? Debt consolidation loans come in a wide range of amounts ($1,000 to $50,000) and repayment terms (two to seven years). Make sure the lender offers the loan amount you need and enough time to pay it off.
Does the lender offer an APR lower than my existing debts? The loan’s annual percentage rate, or APR, represents its true annual cost and includes interest and any fees. The most affordable loan is the one with the lowest rate.
Do I meet the lender’s qualification criteria? Some lenders openly disclose their borrower requirements, including minimum credit score, credit history and income. You can check the lender’s website for this information or call and ask to speak to a loan officer.
Does this lender charge an origination fee? An origination fee ranges from 1% to 10% of the loan amount and is deducted from the loan proceeds or added to the loan balance. Avoid loans with this fee, unless the APR (which includes the origination fee) is still lower than loans with no origination fee.
Does this lender offer special debt consolidation features? Some lenders offer extra perks, like sending the loan funds directly to your creditors or free credit score monitoring. Consider these features, but always prioritize an affordable loan you can repay on-time.
How to get a debt consolidation loan with NerdWallet
1. Know your credit score before applying
A quick check to your credit score gives you an idea of where you stand in terms of the credit brackets — excellent, good, fair or bad — and which lenders may be the best fit based on their minimum credit score requirement. You can check your credit score for free on NerdWallet.
2. Pre-qualify and compare multiple loan offers
To get the best deal on a debt consolidation loan, pre-qualify with lenders to compare rates and terms before you apply. Pre-qualification won’t hurt your credit score.
Though you can pre-qualify with each lender individually, NerdWallet lets you pre-qualify with multiple lenders at once, so you can more easily compare loan options.
3. Submit your application
Once you’ve decided on a lender, it’s time to formally apply. Loan applications ask for personal information like your Social Security number, address and other contact details. You also may be asked to provide proof of identity, employment and income.
Some online lenders can approve applications the same day and send loan funds in one business day.
4. Pay off your creditors
After receiving the loan funds, use the money to pay off all your debts. Some lenders may offer to send the loan funds to your creditors for you, so you’ll need to provide the correct account information. Check the accounts later to make sure they’re paid off.
5. Start making payments on your new loan
Personal loan payments are due monthly, and you’ll likely be charged a fee for any late payments. As you make progress on your debt consolidation loan, try to keep credit card balances at or near zero. Avoid closing the accounts, which can lower your credit score.
Other ways to pay off high-interest debt
0% balance transfer credit card
For borrowers with good to excellent credit, transferring debts to a 0% balance transfer card is a great option — as long as you can pay it off during the introductory period, which can last up to 21 months.
This is sometimes called credit card refinancing, and it’s similar to a consolidation loan. But because you pay no interest during the introductory period, you can get out of debt even faster.
» MORE: Best balance transfer credit cards
Credit counseling
Nonprofit organizations offer credit counseling, which includes helping you create a debt management plan. Similar to other consolidation products, these plans roll your debts into one manageable payment at a reduced interest rate.
» MORE: Find the right debt management plan
DIY debt payoff strategies
If you’re not sure how to tackle debt, you may not need to consolidate. The debt snowball and debt avalanche methods are two common and effective strategies for paying off debt.
The snowball method focuses on paying off your smallest debt first, building momentum as you go. The avalanche focuses on paying off the debt with the highest interest rate first, then applying the savings elsewhere. Both can boost your payoff speed.
Debt relief
If you have significant debt (40% or more of your income) and no plan to pay it off, you may want to explore other strategies, like debt settlement or bankruptcy. Both of these options help eliminate unsecured debts, but they hurt your credit and are typically a last resort.
🤓 Nerdy Tip
There are other ways to consolidate debt, like taking out a home equity loan or line of credit or borrowing from your retirement savings with a 401(k) loan. But these options involve more risk — to your home or to your retirement — so it’s best to go with one of the options above.