Are you looking for the best personal loans for debt consolidation? Personal loans can help you manage your debt more effectively. When sourcing for personal loans, look out for the ones that meet your needs, the ones that have flexible repayment terms, and the ones with the lowest interest rate and little or no fees.
What Are Debt Consolidation Loans?
Many times one might find themselves owing different financial institutions. Imagine a situation where a borrower is owing more than 5 loan apps without having any option to pay back. While unsecured loans have been helpful, they have also experienced a lot of downsides such as chasing after borrowers to repay their monies to a point of using different defamatory means to recover their monies.
So when that happens and you wish to pay back, you can find yourself in worse-case scenarios where you would start borrowing from one lender to pay another lender. As such you continue to accumulate more debts from many lenders.
That is where Debt consolidation comes into play. With debt consolidation, you can simply request a loan from the consolidation company to repay other lenders while you owe only one lender.
So by definition, debt consolidation refers to a situation whereby a borrower merges all his loans into one lender to enable them to manage their debts better and easier.
10 Personal Loans For Debt Consolidation
Here are the best personal loans for debt consolidation. Go through them and choose the one that fits you the most.
1. Best Eggs
Best Egg is a top-notch fintech that offers unsecured personal loans that can be used for various purposes, including debt consolidation. It is best for high-income earners with a high credit score of a minimum of 600.
Best Egg offers personal loans for debt consolidation from $2,000 to $50,000.
- Fixed APR: 8.99% –35.99%
- Repayment duration: 3 to 5 years
2. Happy Money
Happy Money is one of the best personal loans for debt consolidation specifically designed for borrowers who want to settle their credit card debt.
Happy Monday helps you to consolidate credit card debt without incurring unnecessary fees. You must have a minimum credit score of 640, and the application process is entirely online.
With Happy Money, borrowers can get free monthly FICO updates and receive $5,000– $40,000.
- Fixed APR: 10.50% –29.99%
- Repayment duration: 2 to 5 years
Another reliable personal loan for debt consolidation is LightStream. LightStream offers personal loans for up to $100,000 and repayment duration of 84 months. This makes it the best personal loan for large loans and longer repayment duration.
The rates are fixed, and you must have excellent credit scores and supplementary assets to qualify for a large personal loan.
- Fixed APR: 7.99% –23.99%
- Term lengths: 2 to 7 years
Pentagon Federal Credit Union offers the best small-dollar personal loan with a credit union. Personal loans are unsecured, fixed-rate, and can be used for debt consolidation.
To access a personal loan for debt consolidation from Pentagon, you must first become a member of the credit union by opening a savings account with an initial deposit of $5.
You can get personalized loans for as little as $600 and a maximum limit of $50,000. To apply, you must have a minimum credit score of 700.
- Fixed APR From: 7.74% –17.99%
- Repayment duration: 1 to 5 years
5. OneMain Financial
OneMain Financial is an Indiana-based bank that offers smaller loans at higher rates than typical debt consolidation personal loans. The con of this bank is that it does not have hidden fees and is suitable for those with poor credit scores.
When applying, the bank will investigate your income, credit history, and debt load to determine whether you qualify for the loan. You can borrow from $1,500 to $20,000,
- Fixed APR:18.00% –35.99%
- Repayment duration: 2 to 5 years
Are you looking for a reliable personal loan for debt consolidation? Discover is a reputable fintech company that offers unsecured personal loans for debt consolidation. It is best for those with high credit scores, and you have the option to pay creditors directly.
The APR starts at 6.99 percent, which is lower than most lenders. You get funded the next business day if your application is submitted and approved.
You can borrow up to $2,500– $35,000and must be earning an annual minimum of $25,000
- Fixed APR: 6.99% –24.99%
- Repayment duration: 3 to 7 years
If you have a little credit history and are looking for a personal loan for debt consolidation, Upstart is the best platform.
Upstart offers unsecured personal loans with unique underwriting criteria for borrowers with thin credit scores. Upstart considers other factors, such as schooling and employment history when approving your loan. The loan amounts that can be borrowed range from $1,000– $50,000
- Fixed APR: 6.50% –35.99%
- Repayment duration: 3 to 5 years
Can You Get A Debt Consolidation Loan With Bad Credit
Yes, you can get a debt consolidation loan with bad credit or a credit score of less than 670. The only disadvantage is that the interest rates on personal loans for bad credit are usually higher. Online lenders and credit unions are the best places to get bad credit.
If you have bad credit, taking a loan is not a good option due to the high-interest rate. It is advised you opt-in for credit counseling to help you draft a debt management plan.
Types of Debt Consolidation Loans For Bad Credit
Apart from Upstart, below are the three debt consolidation loans for bad credit
8. Universal Credit
Universal Credit offers one of the best loans for bad credit that ranges from $1,000 and $50,000. The minimum credit score is 560. The loan terms are from 36 to 60 months.
Universal Credit, although suitable for borrowers with bad credit comes with some tradeoffs. It charges high APRs and a high origination fee of 4.25% to 8%.
- APR: 11.69% 35.93%
LendingClub is the largest online lending and peer-to-peer platform for personal loans for debt consolidation for bad debts. With LendingClub, you don’t have to bother about the logistics of debt consolidation because the platform will pay your creditors directly.
You can borrow from $1,000 to $40,000, and the funding time takes longer, compared to other lenders. The required minimum credit score is 600, and the repayment duration is three or five years. An origination fee between 2% and 6% of the total loan amount is charged on the loan.
- APR range: 8.05% to 36%
Achieve (formerly FreedomPlus) is a reliable indirect lending platform that offers personal loans for debt consolidation. It offers flexible loan terms, which are between two to five years. You can borrow between 7,500 to $40,000. This makes it a good choice when consolidating a large debt by spreading repayment over an extended period.
It charges an origination fee of 1.99% to 4.99% of the total loan amount. The minimum credit score required is 620.
- APR range: 7.99% to 29.99%
Debt consolidation should be an issue for you. The above personal loans can be used to consolidate your debt. Ensure you check the fees, such as origination fees, interest rates, and other charges. Do not sign up for any personal loan that you don’t understand the terms and conditions.