Best Debt Consolidation Loans Of 2022

Marcus is a subsidiary of the investment bank Goldman Sachs, and offers personal loans between $3,500 and $40,000. In addition to offering flexible loans that are available for three- to six-year terms, Marcus also assists debt consolidation borrowers by offering direct payment to third-party creditors.

Borrowers also can benefit from the platform’s on-time payment reward and flexible payment dates. Likewise, Marcus borrowers don’t have to pay any fees, including origination fees and prepayment penalties. This makes Marcus a more affordable way to consolidate your debts without incurring additional costs.

Marcus also lets applicants prequalify with a soft credit pull, so it’s easy to shop for debt consolidation rates without hurting your credit. As a prospective or current Marcus borrower, you’ll also have access to robust customer support options with service available seven days a week from 9 a.m. to 7 p.m. Eastern time.

Eligibility: Marcus personal loan applicants must have a minimum credit score of 660 to qualify; however, those with higher scores are eligible for lower rates and more favorable terms. And, while Marcus doesn’t disclose an income requirement, the platform does require applicants to have an income sufficient to cover loan repayment. Marcus doesn’t permit co-signers or co-applicants, so if you have a low credit score you may qualify for a lower rate with a co-applicant elsewhere.

Loan uses: Marcus’ personal loans can be used for debt consolidation, home improvement, moving and relocation, medical expenses, funeral costs, travel and many other personal expenses that come your way. That said, borrowers cannot use Marcus personal loans to refinance existing student loans, so keep this in mind if you’re planning to refinance school costs.

Turnaround time: An applicant’s loan may be approved in under 24 hours—quicker than some lenders, but not the fastest approval process we encountered. Once a loan is approved, funds take between one and four days after bank account verification to land in the borrower’s account. However, funding time varies depending on the financial institution and when the loan was processed.

FreedomPlus is an indirect lending platform that offers personal loans underwritten by Cross River Bank or MetaBank. Founded in 2014, the lender is one of our top picks for debt consolidation loans because of the flexible loan terms (two to five years) and loan amounts ($7,500 to $40,000). These characteristics make it easier to consolidate a large amount of debt while spreading payments out over a lengthy period of time and reducing monthly payments.

Like some of our other top picks, FreedomPlus also offers direct payment to creditors. In fact, borrowers who put 85% of the total loan amount toward debt consolidation via direct payment are more likely to qualify for a loan.

That said, depending on the interest rates on your current debts, the potentially high APR FreedomPlus charges may make it more difficult to save money by consolidating. Likewise, the origination fee of between 1.99% and 4.99% of the loan amount can make the loan more expensive. If you’re considering FreedomPlus for debt consolidation, it’s important to do the math before you sign on the dotted line.

Eligibility: Applicants must have a credit score of at least 620 to qualify for a FreedomPlus personal loan. Prospective borrowers also should have a minimum gross income of $21,500, keeping in mind that FreedomPlus will not lend more than 35% of the borrower’s annual income. If you want to consolidate your other loans but don’t have a great credit score, FreedomPlus allows both co-signers and co-applicants, with about 30% of borrowers having joint loans.

Loan uses: FreedomPlus loans can be used to cover home improvement costs, wedding and travel expenses, medical costs, moving expenses and, most importantly, debt consolidation.

Turnaround time: FreedomPlus says you could be approved for your loan on the same day you apply. You may be able to receive your funding in as little as 48 hours.

In addition to offering customers banking, credit cards and retirement solutions, Discover issues personal loans in all 50 states. The platform stands out for debt consolidation because loans are available from $2,500 to $35,000 and terms extend up to seven years—longer than is available for many other personal loans. This means that, in addition to possibly qualifying for a lower interest rate, you may be able to reduce your monthly debt service by extending your loan over a longer period.

And, while Discover does charge a late payment fee, it does not charge any origination fees or prepayment penalties, making it competitive with other top personal loan providers. Discover also will disperse funds directly to third-party creditors, which can save time when trying to consolidate your debt and take control of your finances. Finally, Discover stands out because of its online application and mobile banking tools, well-reviewed customer support team and quick funding.

It’s also worth noting that Discover has a low 1.9-star rating on Trustpilot. However, the majority of these reviews are from credit card and banking customers—specifically, there are reports that Discover is closing credit accounts in the wake of Covid-19. Some negative loan reviews also mention high interest rates that make it difficult to pay off loan balances. That said, an online customer survey conducted by Discover revealed that 81% of customers reported saving money by consolidating debt with a Discover personal loan; 77% of debt consolidation customers reported feeling less stressed after taking out a Discover personal loan.

Eligibility: To qualify for a Discover personal loan for debt consolidation, prospective borrowers must have a minimum credit score of 660; the average Discover borrower has a score of 750. Discover does not require applicants to have a minimum credit history length, but applicants must demonstrate a minimum household income of $25,000 per year. Applicants also are evaluated based on their credit history, recent credit activities and other credit inquiries. Co-signers and co-applicants are not permitted.

Loan uses: Discover personal loans can be used for a number of personal uses—including debt consolidation. And, unlike some other personal loan providers, Discover loans can be used to cover small-business expenses. Even so, Discover is similar to other lenders in that customers cannot use a Discover loan to pay for post-secondary education, to pay off a secured loan or for illegal activity.

Turnaround time: Applicants generally receive a same-day decision. If approved, funds may be sent as soon as the next business day if the loan was funded on a weekday—and if there aren’t any typos or errors in the application. Otherwise, borrowers may not receive loan funds for up to seven days. Discover also can disperse funds directly to third-party creditors when a loan is being used for debt consolidation.

Upgrade provides accessible online and mobile credit and banking services in every state except Iowa, Vermont and West Virginia. Since its founding in 2017, the platform has made more than $3 billion in credit available to over 10 million applicants and continues to expand its online and mobile services. Loan funding can take up to four business days, but Upgrade makes loans available to those with poor credit history. And, perhaps most importantly, Upgrade will directly pay your other creditors if you’re using a loan to consolidate your debts.

Maximum interest rates are higher than what other lenders on our list charge. However, loan amounts start at just $1,000 and go up to $35,000, so Upgrade is still a flexible option if you want to consolidate high-interest debts. Three- and five-year loan terms are available. There’s also no prepayment penalty so you can save money if your goal is to pay off your consolidated debts quickly. Keep in mind, though, that these benefits are balanced out by Upgrade’s origination fee of 2.9% to 8% of the loan amount.

Eligibility: Upgrade applicants generally must have a minimum credit score of 580 to qualify for a personal loan. This makes it an accessible option for those with fair credit who want to consolidate their debt. What’s more, Upgrade applicants aren’t required to meet a minimum income requirement. Still, the average Upgrade borrower makes over $30,000 per year. Upgrade further increases loan accessibility by allowing both co-signers and co-borrowers.

Loan uses: Loans from Upgrade must be used to pay off credit cards, consolidate other debt, make home improvements or pay for other large purchases. Unlike some other lenders, Upgrade also offers direct payment to third-party creditors, though it can take longer for these funds to be processed.

Turnaround time: Once an Upgrade loan is approved, it generally takes up to four business days for a borrower to receive the funds. However, if Upgrade is directly paying off a borrower’s loans to a third-party lender, it can take up to two weeks for the funds to clear.

Universal Credit is an online lending platform that offers personal loans between $1,000 and $50,000 through its partners. Repayment terms range from 36 to 60 months—or three to five years.

While Universal Credit makes personal loans accessible even to those with damaged credit, it comes with a few tradeoffs. First, it charges high APRs, well above the most competitive rates seen on our list. Second, Universal Credit charges a 4.25% to 8% origination fee on all personal loans. Because this is deducted from your loan proceeds, you’ll need to factor this in when determining your loan amount to ensure you receive the necessary amount after the fact.

Eligibility: Universal Credit requires a minimum credit score of 560, making it suitable for a wide range of borrowers.

Turnaround time: Once approved, Universal Credit will send your funds to your bank within one business day. However, the availability of your funds depends on how quickly your bank can process the transaction. If you’re using funds to directly pay off another creditor, it may take up to two weeks.

Founded in 2009, Payoff is an online lending platform that connects prospective borrowers with fixed-rate credit card debt consolidation loans in every state except Massachusetts, Mississippi, Nebraska and Nevada. Payoff specializes in helping borrowers eliminate their high-interest debt, and will pay off members’ outstanding credit balances directly.

Loans are available from as little as $5,000 up to $40,000, making it a flexible option even for borrowers who need to consolidate high credit card balances. Lending terms are available from two to five years. And, while Payoff charges a 0% to 5% origination fee, there are no late fees, annual fees or prepayment penalties.

Eligibility: To qualify for a Payoff debt consolidation loan, applicants must have a minimum credit score of 640, though approved applicants have an average score of 705. To be eligible, applicants also must have a minimum credit history of three years, no current delinquencies and a debt-to-income ratio under 50%. There is no minimum income requirement, but Payoff does not offer borrowers a co-signer or co-applicant option, so applicants must qualify based on their individual financial circumstances.

Loan uses: Payoff specializes in credit card debt consolidation, making it an excellent option for readers who want to take control of their finances and streamline their debt repayment.

Turnaround time: After submitting an application and all the necessary documents, underwriting may take three to seven business days. After getting approved and signing the paperwork, you will receive the funds within three to six business days, according to a representative.

Best Egg is a lending platform available to borrowers in every state except Iowa, Vermont, West Virginia and Washington, D.C. Personal loans are issued by Cross River Bank and range from $2,000 to $35,000, though offers up to $50,000 may be available. Loan proceeds can be used for debt consolidation, and payment terms are available from three to five years, so Best Egg can be a great way to consolidate your other debts and spread the payments out over time.

That said, Best Egg does not directly pay off creditors, so you’ll have to manage the repayment process on your own. What’s more, borrowers have to pay an origination fee between 0.99% and 5.99% of the loan amount. This fee is an important consideration when calculating how much you can save by consolidating your debts with a Best Egg personal loan. Borrowers can, however, pay off their loan early without incurring a prepayment penalty.

Eligibility: Best Egg applicants should have a minimum credit score of 640 to qualify for a personal loan, but the platform does not disclose a minimum income requirement. Overall, a borrower’s loan term, amount and APR will all depend on their credit score, income, debt payment obligations, loan amount, credit history and other factors.

Loan uses: As with other top lenders on our list, borrowers can use Best Egg personal loan funds to simplify their finances through debt consolidation and credit card refinancing. Still, Best Egg loans are just as flexible as those offered by other lenders, and can be used for a variety of purposes, including everything from home improvement to moving and relocation or taxes and medical expenses. As with many other lenders, however, loan proceeds cannot be used for post-secondary educational expenses, purchasing or carrying any securities or illegal activity.

Turnaround time: The application process for a Best Egg personal loan can take less than five minutes. Expect loan approval and funding to take one to three business days, although some customers may receive same-day funding.

LendingClub is a peer-to-peer lender and the largest online lending platform for personal loans. The platform issues loans in every state except Iowa and has worked with over 3 million customers and funded more than $55 billion in loans since its founding in 2007. And, while LendingClub does not offer the fastest funding time, it will directly pay your creditors so you don’t have to worry about the logistics of debt consolidation.

What’s more, applicants can borrow from $1,000 to $40,000, which makes it easier to pay off outstanding debts, even if you have high balances. That said, LendingClub has higher APRs than other lenders (topping out at 35.89%) and loan terms are limited to three or five years. This means that LendingClub may be a less flexible debt consolidation option—especially if you can qualify for better rates elsewhere. Borrowers also are charged an origination fee between 2% and 6% of the total loan amount, so you’ll need to take this into consideration when evaluating how much you stand to save by consolidating loans.

Eligibility: To qualify for a LendingClub personal loan, applicants must have a minimum credit score of 600 and a minimum credit history of three years. We also confirmed that applicants should have a debt-to-income ratio of less than 40% for single applicants and 35% for joint applicants. These factors, including proof of income, help LendingClub’s platform of investors decide who they want to lend to. Co-applicants (you live in the same home) are permitted but co-signers are not.

Loan uses: LendingClub personal loans can be used for a number of personal uses—including debt consolidation. In fact, LendingClub makes it even easier for borrowers to consolidate debt by offering direct payment to third party lenders. As with many other lenders, LendingClub borrowers are restricted from using funds for postsecondary education, the purchase of investments, gambling and illegal activities.

Turnaround time: LendingClub borrowers typically receive their loan funds as soon as four days after loan approval. However, this timeline may vary if an application is complete or if the lender requires additional documentation or verification.

LightStream is a consumer lending division of Truist—which formed following the merger of SunTrust Bank and BB&T. The platform offers unsecured personal loans from as little as $5,000 up to $100,000. Loan amounts vary based on the loan purpose. Although a number of lenders offer smaller loans than the LightStream minimum, few lenders offer a higher maximum loan. Repayment terms are available from two to seven years, making it an excellent option for those who want to spread out the payment of large expenses over time.

In addition to offering appealing and flexible terms, LightStream charges no origination, late payment or prepayment fees. The lender also offers a 0.50% rate discount for borrowers who enroll in autopay—higher than most lenders with the same perk—as well as a 30-day loan experience guarantee to ensure borrower satisfaction, Covid-19/hardship assistance and a rate-beat program. LightStream will beat a competitor’s interest rate by 0.1% for applicants who meet certain criteria.

LightStream offers loans in all 50 states plus Washington, D.C. and Puerto Rico, and applicants can contact the lender’s customer support team seven days a week; current borrowers have access to customer support from Monday through Saturday. And, while LightStream doesn’t offer a mobile app for loan management, customers can access their account through LightStream.com.

Eligibility: LightStream recommends applicants have good to excellent credit before applying for a personal loan. To increase their chances of approval, applicants also should have several years of credit history, including multiple account types, as well as an income that is stable enough to service current debts and a new LightStream loan.

LightStream doesn’t give prospective borrowers the ability to prequalify for a loan. This fact—combined with the minimum credit score requirement—makes the platform a better fit for those with a strong credit profile. Applicants with excellent credit also are more likely to get favorable terms. LightStream does not allow co-signers, but prospective borrowers can submit a joint application.

Loan uses:  LightStream’s personal loans can be used for a wide range of purposes, from purchasing a new car, RV or jewelry to paying for home improvements. However, LightStream really stands out, because loans can be used to finance land, timeshares and so-called tiny homes. As with other top lenders, LightStream prohibits use of its personal loans for post-secondary education costs, business purposes and illegal activities. Borrowers also are prohibited from using LightStream loan funds to refinance an existing LightStream loan.

Turnaround time:  LightStream borrowers can receive funds as soon as the same day if the loan is approved before 2:30 p.m. Eastern time on a banking business day. To receive same-day funding, the applicant also must review and electronically sign the loan agreement; provide LightStream with funding preferences and relevant banking information; and complete the final verification process—all before 2:30 p.m. on the day the loan is approved.

SoFi is an online lending platform that offers unsecured fixed-rate personal loans in every state except Mississippi. Founded in 2011, SoFi has extended over $50 billion in loans and stands out for allowing high loan amounts and its availability of extended loan terms.

Loans are available between $5,000 and $100,000, making SoFi a great option for those with excellent credit who need to borrow a large amount of money. Loan amounts available may vary by the state you live in. Repayment terms range from two to seven years, making SoFi an incredibly flexible option for those with sufficient credit (minimum 680) and annual income (at least $45,000). SoFi also lets prospective borrowers submit joint applications—although co-signers are not permitted.

Approved borrowers are rewarded with comparatively low APRs. What’s more, SoFi doesn’t charge origination fees, late fees or prepayment penalties—a stand-out feature because personal loan lenders often charge origination or late payment fees at a minimum.

However, if you’re considering a debt consolidating loan from SoFi, keep in mind that the lender does not offer direct payment to a borrower’s other creditors. This means the loan proceeds will be deposited to your bank account and you’ll have to pay off your other lenders individually. The platform does offer customers a number of other perks and discounts, including unemployment protection and the ability to change their payment due date once a year.

Eligibility: Personal loan applicants should have a minimum credit score of 680. However, many successful applicants have a score of 700 or higher. Applicants also must have an annual income of at least $45,000, though the average income of a SoFi borrower is over $100,000.

Loan uses: In general, SoFi personal loans are limited to use for personal, family and household purposes. This means a borrower can use loan funds to cover things like medical costs, credit card consolidation, home improvements and relocation costs. However, SoFi loans cannot be used to fund a new business venture, the purchase of real estate, investments and securities, post-secondary education or short-term bridge financing.

Turnaround time: Borrowers typically receive funds within a few days—or as soon as the next business day after approval and acceptance of terms. However, funding times may be longer than a few days—especially for loans over $20,000.