Best Debt Consolidation Loans for 2020

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If you’re like many Americans with rising credit card balances, you might be looking for ways to get your debt under control. Debt consolidation loans are one option that may reduce your debt and assist you to pay it off sooner.

Debt consolidation is the process of combining multiple debts – such as credit cards, hospital bills and payday loans – into one debt with a fixed monthly payment. Consolidating debt having a personal loan works best when the rate around the loan is lower than the combined interest rate on your existing debt.

When comparing debt consolidation reduction loans, look for low rates, flexible terms and consumer-friendly features for example direct payment to creditors.

Debt consolidation loans for average to bad credit

It may be difficult for borrowers with fair to bad credit (roughly?coinciding having a FICO score?between 300 and 689) to qualify for a low-interest debt consolidation reduction loan. However, many lenders consider factors beyond credit scores or focus on borrowers consolidating debt.

Payoff, which lends only to people consolidating credit card debt, requires a minimum credit rating of 640 and two years of credit history. It provides financial?guidance to help you remain on top of loan payments.

Upgrade requires a minimum credit rating of 620, plus some borrowers with high debt-to-income ratios may qualify. It also offers direct payment to creditors, which means it sends the loan proceeds straight to creditors, helping you save your time and effort of coughing up off each debt.

You can also use an Upgrade loan to refinance a current personal bank loan.

Consider?Avant?if you are consolidating high-interest debts, such as pay day loans. It has a relatively low minimum credit score requirement of 580, and?about half of its customers use their loans to consolidate debt.

4.5NerdWallet rating

APR: 5.99% – 24.99%.

Loan amount: $5,000 – $35,000.

Loan terms: 2 to 5 years.

Minimum credit rating: 640.

Time to funding: 1 to 7 working days.

Fees: Origination fee of 0% to 5% of loan amount. No late fee.

Read our review.

Check rateClick to pre-qualify on NerdWallet.4.0NerdWallet rating

APR: 7.99% – 35.89%.

Loan amount: $1,000 – $50,000.

Loan terms: 3 or 5 years.

Minimum credit score: 620.

Time to funding: 24 hours.

Fees: Origination fee of just one.5% – 6% of amount borrowed.

Read our review.

Check rateClick to pre-qualify on NerdWallet.4.5NerdWallet rating

APR: 9.95% – 35.99%.

Loan amount: $2,000 – $35,000.

Loan terms: 2 to 5 years.

Minimum credit rating: 580.

Time to funding: As soon as the next business day.

Fees: Administrative fee of four.75% of amount borrowed; fees for late payment and unsuccessful payment.

Read our review.

Check rateClick to pre-qualify on NerdWallet.

Debt loan consolidations permanently to excellent credit

Online lenders Marcus, Discover and Laurel Road are options for borrowers with good to excellent credit (roughly coinciding with a FICO score with a minimum of 690). The 3 lenders have starting rates that are lower than the average rate on credit cards and no origination fees.

Marcus and Discover offer direct payment to creditors and flexible repayment options. After 12 consecutive monthly payments?on?a Marcus loan, borrowers can skip a payment at no extra cost. Having a Discover loan, borrowers can alter payment due dates or defer payments.

Laurel Road allows you to give a co-signer, which can help you receive a lower rate on the debt consolidation reduction loan.

5.0NerdWallet rating

APR: 5.99% – 28.99%.

Loan amount: $3,500 – $40,000.

Loan terms: Three to six years.

Minimum credit score: 660.

Time to funding: Usually A couple of days.

Fees: None.

Read our review.

Check rateClick to pre-qualify on NerdWallet.4.5NerdWallet rating

APR: 6.99% – 24.99%.

Loan amount: $2,500 to $35,000.

Loan terms: 3 to Many years.

Minimum credit rating: 660.

Time to funding: Next-day, up to and including week.

Fees: No origination fee. Fee for overtime.

Read our review.

Compare ratesClick to check rates on NerdWallet.5.0NerdWallet rating

APR: 8.01% – 16.30% (with autopay).

Loan amount: $1,000 – $45,000.

Loan terms: Three to five years.

Minimum credit rating: 700.

Time to funding: 5 business days.

Fees: No origination fee; late fee may be the lesser of 5% of payment or $28.

Read our review.

Check rateClick to pre-qualify on NerdWallet.

Debt loan consolidations: Compare your options

Lender Minimum credit score APR range Get started
Avant
4.5NerdWallet rating
580 9.95% – 35.99% Check ratesat Avant
Upgrade
4.0NerdWallet rating
620 7.99% – 35.89% Check ratesat Upgrade
Payoff4.5NerdWallet rating 640 5.99% – 24.99% Check ratesat Payoff
Marcus5.0NerdWallet rating 660 5.99% – 28.99%
For NY residents: 5.99% – 24.99%
Check ratesat Marcus
Discover4.5NerdWallet rating 660 6.99% – 24.99% Compare rateson NerdWallet
Laurel Road5.0NerdWallet rating 700 8.01% – 16.30% (with autopay) Check ratesat Laurel Road
Click “Check rate” to pre-qualify on NerdWallet and receive personalized rates from multiple lenders.
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How much will your brand-new loan cost?

Use the calculator below to determine estimated rates and payments for any debt consolidation loan according to your credit rating range. Select a amount borrowed that covers the entire debt you need to consolidate.

Loan terms on debt consolidation loans generally range from two to?seven years. A shorter loan term will have lower total interest costs but higher monthly obligations. Aim for a repayment term which has affordable monthly obligations.

Get the most having a debt consolidation reduction loan

Shop around: Compare rates and terms at multiple lenders before you apply for any debt consolidation loan. Most online lenders allow you to pre-qualify having a soft credit inquiry, without any impact on your credit rating.

Plan ahead: Before?the loan is funded, create a budget that allocates a percentage of your income toward debt repayment, and track your repayment progress having a budgeting and saving app.

Curb spending: Avoid big expenditures on your credit cards while you pay off debt, but don’t close any of the cards. Canceling credit accounts can hurt your credit rating.

Summary: Debt consolidation reduction loans

  • Best for average or bad credit:?Avant,?Payoff,?Upgrade.
  • Best for good to excellent credit:?Discover,?Laurel Road, Marcus.

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