The best debt consolidation loans of 2022

Generally, you'll need a personal loan for debt consolidation, which means replacing multiple loans with a single loan instead.

Most personal loan lenders ask about loan purpose when starting the loan application process, and often, personal loans for debt consolidation have higher interest rates than other personal loans and other loan types. 

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Wells Fargo

Flexibility makes Wells Fargo a top contender for best personal loans for debt consolidation. Wells Fargo separates debt consolidation loans from personal loans, but the interest rates are the same.

Benefits include competitive interest rates and an autopay discount of 0.25% if payments are made from a Wells Fargo account. For unsecured personal loans, the most common type for debt consolidation, there are no origination or prepayment fees.

Wells Fargo can send your loan funds to your Wells Fargo bank account, or to a credit account outside of Wells Fargo to pay down your debts directly. 

Watch out for: Wells Fargo's history with data security and compliance. The bank has faced several federal penalties for improper customer referrals to lending and insurance products, and security issues tied to creating fake accounts several years ago. 

Read Insider's full review of Wells Fargo. 

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Lightstream Debt Consolidation Loan

Lightstream is a highly regarded lender for many loan types, and has been a top pick across Insider's coverage of the best personal loans and best auto loans. However, this lender only works with borrowers with good or better credit, with a minimum credit score requirement of 660. 

LightStream offers consistently competitive interest rates, though its minimum interest rate for debt consolidation is higher than its typical personal loan's interest rates. However, this lender does not have any prepayment or origination fees. Same-day funding is available with LightStream. 

Watch out for: Varying loan terms between LightStream's typical personal loans and debt consolidation loans. Only borrowers with excellent credit can borrow the $100,000 maximum, and anyone without excellent credit may not qualify for the full amount.

LightStream defines excellent credit history as an account with five or more years of credit history, stable and sufficient income for debts, and a variety of credit history with little or no credit card debt. If you're looking for a debt consolidation loan, chances are you have a significant amount of debt, and may not fit these qualifications.

Additionally, LightStream doesn't have a way to pre-qualify online. You'll have to apply for the loan to find out exactly what your rates and terms could look like, which could make comparison shopping difficult. 

Read Insider's full review of Lightstream.

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SoFi

A SoFi personal loan is the best option for anyone with a high balance, as this lender makes debt consolidation loans of up to $100,000. Debt consolidation loans from this lender are comparable in rates to those offered by LightStream, but SoFi offers higher loan limits to all applicants, whereas LightStream only allows some borrowers to borrow up to $100,000. Similarly, SoFi doesn't have any application, origination, or prepayment fees. 

SoFi offers unique features like unemployment protection, which could put loans in forbearance for up to three months if you find yourself out of work. 

Watch out for: Stringent requirements. SoFi personal loans have a minimum credit score of 680. According to NerdWallet, the average income among borrowers is over $100,000.

Read Insider's full review of SoFi.

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Payoff

In the fair credit range, it can be tough to qualify for a personal loan with reasonable interest rates — many lenders have a minimum of 660 or 680. However, a Payoff loan could be a good option for people with credit scores as low as 640. Interest rates are comparable to those offered by LightStream and SoFi, but this lender has less stringent requirements. 

Compared with competitors Prosper and Best Egg, which both have the same 640 minimum credit score requirement, Payoff's interest rates are capped lower, and could have lower origination fees. 

Watch out for: Origination fees. Payoff offers loans with origination fees ranging from 0% to 5%. Competing lenders Prosper and Best Egg charge minimum 2.41% and 0.99% origination fees, respectively. The better deal will depend on your credit score, income, and repayment term.

Read Insider's full review of Payoff.

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Avant

With bad credit , a personal loan for debt consolidation can be expensive, or hard to qualify for. An Avant personal loan is the best bet for borrowers with poor credit, requiring a minimum credit score of 600.

Compared to other personal loan lenders offering debt consolidation loans for bad credit borrowers, Avant's terms are the most generous. While there is an administration fee, it could be lower than competitors' fees with a cap at 4.75%. Avant also has the advantage of quick, next-day funding available.

Watch out for: High rates with a low credit score. While Avant is accessible to borrowers with poor credit scores, approval might go hand in hand with high interest rates on your loan.. 

Read Insider's full review of Avant.

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Other personal loans we considered

  • LendingClub: This lender has the potential for high origination fees that could add to the cost of borrowing. The average origination fee is 5.2%. Read Insider's full review of LendingClub . 
  • Prosper Personal Loan: Prosper's minimum credit score requirement is 640, but borrowers with this score could get lower interest rates and potentially lower fees from Payoff. Read Insider's full review of Prosper. 
  • Best Egg Personal Loan: Like Prosper, borrowers with credit scores of 640 or above could get lower minimum interest rates and lower maximum fees from Payoff. In order to qualify for the lowest possible interest rates, borrowers need a minimum FICO score of 700 and an income of at least $100,000 per year. Only three-year and five-year loan terms are available, making these loans less flexible than other options. Read Insider's full review of Best Egg. 
  • Discover personal loans: Discover's personal loan rates start higher than other lenders' loans, and borrowers who meet the minimum credit score requirements could get lower interest rates from LightStream, which cap lower. However, Discover makes payments directly to creditors, which could simplify your payoff process. Wells Fargo is the only other bank on our listing to offer that option. Read Insider's full review of Discover. 
  • Marcus Personal Loan: Like Discover, borrowers who qualify for Marcus personal loans could find lower minimum interest rates with LightStream, SoFi, or Wells Fargo. Read Insider's full review of Marcus. 
  • Axos personal loans: This lender's personal loans require a minimum credit score of 720. For borrowers with this type of credit, lower interest rates can be found elsewhere. 
  • OneMain Financial Personal Loan: OneMain doesn't have a minimum credit score required to apply, which could make it a viable option for people who don't meet Avant's 600 minimum. But interest rates range from a high 18% to 35.99%. Read Insider's full review of OneMain Financial. 

Which lender is the most trustworthy?

We've compared each institution's Better Business Bureau score to give you another piece of information to choose your lender. The BBB measures businesses based on factors like their responsiveness to customer complaints, honesty in advertising, and transparency about business practices. Here is each company's score:

NR
A+
A+
A+
A

With the exception of Wells Fargo, our top picks are rated A+ by the BBB. Keep in mind that a high BBB score does not guarantee a positive relationship with a lender, and that you should continue to do research and talk to others who have used the company to get the most complete information possible. 

The BBB does not have a rating for Wells Fargo as the company responds to previously closed complaints. Previously, the organization gave Wells Fargo an F rating. In the past few years:

  • The bank paid the city of Philadelphia $10 million as a result of the city's claims that Wells Fargo was involved in predatory mortgage lending to racial minorities (2019).
  • The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency charged Wells Fargo $1 billion for overcharging and selling extra products to consumers with auto and home loans (2018).

If you're uncomfortable with this history, you may want to use one of the other personal loan lenders on our list.

How did we choose the best debt consolidation loans? 

To find the best personal loans for debt consolidation, we combed through the fine print and terms of about a dozen personal loans to find the ones that were best suited to help with consolidating debt. We considered four main features: 

  • APR range: For the most help with debt payoff, a personal loan for debt consolidation needs to have lower interest rates than the credit card or other debts you're consolidating. We looked for the loans that had the lowest rates possible for each credit range and purpose. The average credit card interest rate was 16.28% in 2020, so we focused on loans that had the potential to beat this. 
  • Appropriate loan amounts: We looked for personal loans that had the most variety in loan amounts. According to loan comparison site Credible, the median amount of debt consolidated in May 2020 was $18,000. To benefit the most borrowers, we included personal loans with maximum limits over $10,000. 
  • Minimum credit score requirements: Where available, we considered the minimum credit score requirements for each company. We considered loans for excellent, fair, and poor credit, grouping loans into categories based on these credit score requirements.
  • Fees: We considered fees like origination or administrative fees in our decisions, looking for loans with the fewest or lowest fees. None of the best loans listed have prepayment penalties. 
  • Nationwide availability: We only considered loans with availability in most or all 50 US states. 

Frequently asked questions

Why trust our recommendations? 

Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product, we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.

What is debt consolidation? 

Debt consolidation takes all sorts of debts, including credit cards, medical debt, or typically any other type of unsecured debt, and rolls it into one loan. 

To consolidate debt, you get a loan from one lender for the total amount of debt you'd like to combine. Then, you use those funds to pay off the individual, smaller debts. At the end, you have all of your debt rolled into one monthly payment, one deadline for debt repayment, and a smaller interest rate. 

Can I use any personal loan for debt consolidation? 

Most personal loans allow a variety of uses, and while most include credit card consolidation or debt consolidation, not all do. Make sure to read the fine print of any personal loan you're applying for, and make sure that debt consolidation is an acceptable use of your loan. All of the loans we considered had an option to use the loan for debt consolidation, if not a separate loan, which we included details for. 

Editor's Rating Editor's Rating Annual Fee $95 Regular APR 16.24% - 23.24% Variable Credit Score Good to Excellent Editor's Rating Editor's Rating Annual Fee $95 Regular APR 16.24% to 23.24% Variable Credit Score Good to Excellent Editor's Rating Editor's Rating Annual Fee $0 Regular APR 15.24% to 23.99% Variable Credit Score Good to Excellent

Disclosure:*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.