BEST OF

Best Debt Consolidation Loans of February 2023

Debt consolidation loans help borrowers combine multiple high-interest debts into a single payment. Compare our picks for the best loan options for all credit scores.

By Jackie Veling 

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

When comparing debt consolidation loans, look for low rates, flexible terms and consumer-friendly features such as direct payment to creditors. NerdWallet has reviewed more than 35 financial institutions to find the best personal loans for consolidating debt.

  • Upgrade: Best overall.

  • SoFi: Best for no fees.

  • Happy Money: Best for paying off credit card debt.

  • LightStream: Best for low rates.

  • Universal Credit: Best for bad credit.

  • Best Egg: Best for secured loan option.

  • Discover: Best for fast funding.

  • Achieve: Best for rate discounts.

  • LendingClub: Best for joint loans.

Best Debt Consolidation Loans From Our Partners

Our pick for

Best overall

Upgrade
Get rate

on Upgrade's website

Upgrade

5.0

NerdWallet rating 
Upgrade

Est. APR

8.24-35.97%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Upgrade's website


Min. credit score

560

Key facts

Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.

Pros

  • Secured and joint loans.

  • Multiple rate discounts.

  • Mobile app to manage loan payments.

  • Direct payment to creditors with debt consolidation loans.

  • Long repayment terms on home improvement loans.

Cons

  • Origination fee.

  • No option to choose your payment date.

Qualifications

  • Minimum credit score: 560.

  • Minimum number of accounts on credit history: One account.

  • Maximum debt-to-income ratio: 75%, including the loan you're applying for.

  • Minimum length of credit history: Two years.

  • Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: 1.85% to 8.99%.

  • Late Fee: $10.

  • Failed payment fee: $10.

Disclaimer

Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 8.24%-35.97%. All personal loans have a 1.85% to 8.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $341.48. Over the life of the loan, your payments would total $12,293.46. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's bank partners. Information on Upgrade's bank partners can be found at https://www.upgrade.com/bank-partners .

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Our pick for

No fees

SoFi
Get rate

on SoFi's website

SoFi

5.0

NerdWallet rating 
SoFi

Est. APR

7.99-23.43%

Loan amount

$5,000-$100,000

Min. credit score

None
Get rate

on SoFi's website


Min. credit score

None

Key facts

Qualified borrowers will find few lenders better than SoFi, thanks to zero fees and thoughtful perks like unemployment protection and free financial advising.

Pros

  • No fees.

  • Joint loan option.

  • Rate discount for autopay.

  • Hardship program for borrowers in need.

  • Mobile app to manage loan.

Cons

  • No option to choose initial payment date.

  • High minimum loan amount.

Qualifications

  • Must legally be an adult in your state.

  • Must be a U.S. citizen, permanent resident or visa holder.

  • Must be employed, have sufficient income or have an offer of employment to start within the next 90 days.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Fixed rates from 7.99% APR to 23.43% APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 8/22/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

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Our pick for

Low rates

Lightstream
Get rate

on LightStream's website

LightStream

5.0

NerdWallet rating 
Lightstream

Est. APR

6.99-23.99%

Loan amount

$5,000-$100,000

Min. credit score

660
Get rate

on LightStream's website


Min. credit score

660

Key facts

LightStream’s low rates and zero fees make it one of the top lenders for borrowers with good or excellent credit.

Pros

  • No fees.

  • Rate discount for autopay.

  • Long repayment terms on home improvement loans.

  • Rate Beat program and Experience Guarantee.

Cons

  • No option to pre-qualify on its website.

  • Requires several years of credit history.

  • No direct payment to creditors with debt consolidation loans.

Qualifications

  • Minimum credit score: 660.

  • Several years of credit history.

  • Multiple account types within your credit history, like credit cards, a car loan or other installment loan and a mortgage.

  • Strong payment history with few or no delinquencies.

  • Investments, retirement savings or other evidence of an ability to save money.

  • Enough income to pay existing debts and a new LightStream loan.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Rates quoted are with AutoPay. Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). AutoPay discount is only available when selected prior to loan funding. Rates without AutoPay are 0.50% points higher. To obtain a loan, you must complete an application on LightStream.com which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $25,000 loan at 4.98% APR with a term of 20 years would result in 240 monthly payments of $164.71. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. Truist Bank is an Equal Housing Lender. © 2022 Truist Financial Corporation. Truist, LightStream, and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

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Our pick for

Rate discounts

Achieve
Get rate

on Achieve's website

Achieve Personal Loans

5.0

NerdWallet rating 
Achieve

Est. APR

7.99-29.99%

Loan amount

$5,000-$50,000

Min. credit score

620
Get rate

on Achieve's website


Min. credit score

620

Key facts

Achieve (formerly FreedomPlus) offers debt consolidation for fair- or good-credit borrowers. You may qualify for one of the lender’s rate discounts.

Pros

  • Option to pre-qualify with a soft credit check.

  • Multiple rate discounts.

  • Direct payment to creditors with debt consolidation loans.

  • Joint loan options.

Cons

  • May charge origination fee.

  • Not available in all states.

  • No mobile app to manage loan.

Qualifications

  • Minimum credit score: 620; borrower average is 700.

  • Maximum debt-to-income ratio: 45% excluding mortgage.

  • Minimum income: None; borrowers' average household income is $115,000.

  • Minimum credit history: 3 years and 2 accounts.

  • Not actively delinquent on debt and no bankruptcy in the last 24 months.

  • Must be a US citizen, permanent resident or visa holder.

Available Term Lengths

2 to 5 years

Fees

  • Origination fee: 1.99% - 6.99%.

Disclaimer

All loans available through Achieve Personal Loans (NMLS ID #227977) are originated by Cross River Bank (a New Jersey state chartered commercial bank) or Pathward, N.A. (Equal Housing Lenders) and may not be available in all states. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Minimum loan amounts vary due to state-specific legal restrictions – please call an Achieve Personal Loans consultant for further details. Loan amounts generally range from $5,000 to $50,000 including origination fees, and are offered based on loan purpose and underwriting conditions. Repayment periods range from 24 to 60 months. APRs range from 7.99% to 29.99% APR and include applicable origination fees. Example loan: four-year $20,000 loan with a rate of 15.49% and corresponding APR of 18.34%, would have an estimated monthly payment of $561.60 and a total cost of $26,956.80. To qualify for a 7.99% APR loan, a borrower will need excellent credit, a loan amount for $12,000.00 or less, and a term of 24 months. Loan origination fees vary from 1.99% to 6.99%. Adding a co-borrower with sufficient income; using at least 85% of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could also help you qualify for lower rates. Average interest savings for personal loans range from 0% - 6% based on closed loans that qualified for one or more of our rate discounts in July 2022.  †Times noted are estimates and can vary for a loan request from Achieve Personal Loans (NMLS #227977). Same day approvals assume that a fully completed application with all required supporting documentation is provided early enough on a day that our offices are open. Achieve Personal Loans consultants are available Monday–Friday 6AM to 8PM MST and Saturday–Sunday 7AM to 4PM MST.

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Our pick for

Paying off credit card debt

Happy Money
Get rate

on Happy Money's website

Happy Money

4.5

NerdWallet rating 
Happy Money

Est. APR

10.50-29.99%

Loan amount

$5,000-$40,000

Min. credit score

640
Get rate

on Happy Money's website


Min. credit score

640

Key facts

If you can qualify for a low rate, Happy Money is a smart way to consolidate high-interest credit card debt into one fixed monthly payment.

Pros

  • Pre-qualify with soft credit check.

  • Direct payment to creditors with debt consolidation loans.

  • Fast funding.

  • Hardship program.

Cons

  • Origination fee.

  • No rate discount.

  • No joint, co-sign or secured loan options.

  • No option to choose initial payment date.

Qualifications

  • Minimum credit score: 640.

  • Minimum credit history: 3 years and 2 accounts.

  • Maximum debt-to-income ratio: 55%.

  • Minimum income: None; lender will assess cash flow.

  • No bankruptcies filed in past two years.

Available Term Lengths

2 to 5 years

Fees

  • Origination fee: 0%-5%.

Disclaimer

This does not constitute an actual commitment to lend or an offer to extend credit. Upon submitting a loan application, you may be asked to provide additional documents to enable us to verify your income, assets, and financial condition. Your interest rate and terms for which you are approved will be shown to you as part of the online application process. Most applicants will receive a variety of loan offerings to choose from, with varying loan amounts and interest rates. Borrower subject to a loan origination fee, which is deducted from the loan proceeds. Refer to full borrower agreement for all terms, conditions and requirements.

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Our pick for

Secured loan option

BestEgg
Get rate

on Best Egg's website

Best Egg

4.5

NerdWallet rating 
BestEgg

Est. APR

8.99-35.99%

Loan amount

$2,000-$50,000

Min. credit score

600
Get rate

on Best Egg's website


Min. credit score

600

Key facts

Best Egg personal loans are available to borrowers who want to consolidate debt and secure a loan, but they lack some features offered by other lenders.

Pros

  • Offers wide range of loan amounts.

  • Provides secured loan option for homeowners.

  • Offers direct payment to creditors with debt consolidation loans.

Cons

  • Origination fee.

  • No rate discounts.

  • No option to choose initial payment date.

Qualifications

  • Minimum credit score: 600; borrower average is 700.

  • Minimum credit history: Three years and three accounts.

  • Minimum income requirement is $3,500; borrower average is $80,000. Borrower must have enough cash flow to cover current financial obligations.

  • Maximum debt-to-income ratio: 40% or 65% including a mortgage; borrower average is 40%.

  • Employment: Must provide proof of income; part-time employees are eligible.

  • Must provide valid U.S. address and Social Security number.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 0.99% - 8.99%.

  • Return fee: $15 if payments are not processed.

Disclaimer

*Trustpilot TrustScore as of June 2020. Best Egg personal loans, including the Best Egg Secured Loan, are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender or Blue Ridge Bank, a Nationally Chartered Bank, Member FDIC, Equal Housing Lender. “Best Egg” is a trademark of Marlette Holdings, Inc., a Delaware corporation. All uses of “Best Egg” refer to “the Best Egg personal loan”, “the Best Egg Secured Loan”, and/or “Best Egg on behalf of Cross River Bank or Blue Ridge Bank, as originator of the Best Egg personal loan,” as applicable. The term, amount, and APR of any loan we offer to you will depend on your credit score, income, debt payment obligations, loan amount, credit history and other factors. Your loan agreement will contain specific terms and conditions. About half of our customers get their money the next day. After successful verification, your money can be deposited in your bank account within 1-3 business days. The timing of available funds upon loan approval may vary depending upon your bank’s policies. Loan amounts range from $2,000– $50,000. Residents of Massachusetts have a minimum loan amount of $6,500 ; New Mexico and Ohio, $5,000; and Georgia, $3,000. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $100,000. Annual Percentage Rates (APRs) range from 8.99%–35.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%–8.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4-years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR. For example: a 5‐year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3‐year $5,000 loan with 7.99% APR has 36 scheduled monthly payments of $155.12. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents. Best Egg products are not available if you live in Iowa, Vermont, West Virginia, the District of Columbia, or U.S. Territories.

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Our pick for

Bad credit

Universal Credit
Get rate

on Universal Credit's website

Universal Credit

4.5

NerdWallet rating 
Universal Credit

Est. APR

11.69-35.93%

Loan amount

$1,000-$50,000

Min. credit score

560
Get rate

on Universal Credit's website


Min. credit score

560

Key facts

Universal Credit personal loans have a low minimum credit score requirement, credit-building features and perks for debt consolidation. The lender charges high rates but offers autopay and debt consolidation discounts.

Pros

  • Offers direct payment to creditors with debt consolidation loans.

  • Fast funding.

  • Offers multiple rate discounts.

  • Offers free credit score access.

Cons

  • Charges origination fee.

  • Borrowers can choose from only two repayment term options.

Qualifications

  • Minimum credit score: 560.

  • Minimum number of accounts on credit history: 1 account.

  • Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.

  • Minimum length of credit history: 2 years.

  • Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 5.25% to 8.99%.

  • Late fee: Up to $10.

Disclaimer

Personal loans made through Universal Credit feature Annual Percentage Rates (APRs) of 11.69%-35.93%. All personal loans have a 5.25% to 8.99% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 36 to 60 months. For example, if you receive a $10,000 loan with a 36-month term and a 28.47% APR (which includes a 22.99% yearly interest rate and a 7% one-time origination fee), you would receive $9,300 in your account and would have a required monthly payment of $387.05. Over the life of the loan, your payments would total $13,933.62. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.

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Our pick for

Joint loan option

Lending Club
Get rate

on LendingClub's website

LendingClub

5.0

NerdWallet rating 
Lending Club

Est. APR

8.30-36.00%

Loan amount

$1,000-$40,000

Min. credit score

600
Get rate

on LendingClub's website


Min. credit score

600

Key facts

LendingClub loans have limited term lengths, but you can add a co-borrower to help your chances of qualifying for a lower rate.

Pros

  • Joint loan option.

  • Direct payment to creditors with debt consolidation loans.

  • Option to pre-qualify with a soft credit check.

  • Option to change your payment date.

Cons

  • Origination fee.

  • Late fee.

  • No mobile app to manage loan.

Qualifications

  • Minimum credit score: 600.

  • Maximum DTI: 60%; 40% for joint applicants.

  • Minimum credit history: 37 months and two accounts.

Available Term Lengths

3 to 5 years

Fees

  • Origination fee: 3% to 6%.

  • Late fee: 5% of payment or $15 after 15-day grace period.

Disclaimer

Between April 2022 and June 2022, Personal Loans issued by LendingClub Bank were funded within 44 hours after loan approval, on average. The time it takes for a loan to be funded is not guaranteed and individual results vary based on multiple factors, including but not limited to investor demand. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $16,980 for a term of 36 months, with an interest rate of 13.49% and a 6.00% origination fee of $1,019, for an APR of 17.89%. In this example, the borrower will receive $15,961 and will make 36 monthly payments of $576. Loan amounts range from $1,000 to $40,000 and loan term lengths range from 24 months to 60 months. Some amounts, rates, and term lengths may be unavailable in certain states. For Personal Loans, APR ranges from 8.30% to 36.00% and origination fee ranges from 3.00% to 6.00% of the loan amount. APRs and origination fees are determined at the time of application. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of July 11, 2022 and are subject to change without notice. Loans are made by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. LendingClub Bank is not an affiliate of NerdWallet Compare, Inc. which is an unrelated third party (“third party”). LendingClub Bank is not responsible for any products and services provided by this third party and may receive compensation if you visit the third party’s websites or use any of its products or services. Credit eligibility is not guaranteed. Loans are subject to credit approval and may be subject to sufficient investor commitment before they can be funded or issued. Certain information that LendingClub Bank subsequently obtains as part of the application process (including but not limited to information in your consumer report, your income, the loan amount that your request, the purpose of your loan, and qualifying debt) will be considered and could affect your ability to obtain a loan. Loan closing is contingent on accepting all required agreements and disclosures at Lendingclub.com. “LendingClub” is a trademark of LendingClub Bank.

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Our pick for

Fast funding

Discover
Get rate

on Discover's website

Discover® Personal Loans

5.0

NerdWallet rating 
Discover

Est. APR

6.99-24.99%

Loan amount

$2,500-$40,000

Min. credit score

660
Get rate

on Discover's website


Min. credit score

660

Key facts

Discover’s online experience, strong customer support and borrower perks make it a top lender for good- and excellent-credit applicants.

Pros

  • No origination fee.

  • Option to pre-qualify with a soft credit check.

  • Fast funding.

  • Mobile app to manage loan.

Cons

  • May charge late fee.

  • No co-sign or joint loan option.

  • No rate discount.

Qualifications

  • Minimum credit score: 660.

  • Must be at least 18 years old.

  • Must be a U.S. citizen or permanent resident.

  • Must have a minimum household income of $25,000.

Available Term Lengths

3 to 7 years

Fees

  • Origination fee: None.

  • Late fee: $39.

Disclaimer

This is not a commitment to lend from Discover Personal Loans. Your approval for a loan is determined once you apply and is based on your application information and credit history. Your APR will be between 6.99%-24.99% based upon creditworthiness at time of application for loan terms of 36-84 months. For example, if you get approved for a $15,000 loan at 12.99% APR for a term of 72 months, you'll pay just $301 per month. Our lowest rates are available to consumers with the best credit. Many factors are used to determine your rate, such as your credit history, application information and the term you select. Not all applications will be approved.

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What is a debt consolidation loan?

A debt consolidation loan combines multiple unsecured debts — such as credit cards, medical bills and payday loans — into one fixed monthly payment.

A debt consolidation loan is usually a good idea if the interest rate on the loan is lower than the combined rates on your existing debts. With this lower rate, you’ll save money on interest and potentially pay off your debt faster.

You can use a debt consolidation calculator to estimate your interest savings and new monthly payment, and to compare various loan options.

How to choose the best debt consolidation loan

When deciding between debt consolidation loans, compare these factors.

Annual percentage rates: The loan's APR represents its true annual cost, as it includes all fees and interest charges. Rates vary based on your credit score, income and debt-to-income ratio. Use APRs to compare multiple loans. Choose a low rate with monthly payments that fit your budget.

Origination fees: Some lenders charge origination fees to cover the cost of processing your loan. This one-time fee typically ranges from 1% to 10% of the loan amount and is either deducted from your loan proceeds or added to the loan balance. If the fee is deducted from your loan proceeds, you’ll need to request more than the sum of your debts in order to cover the fee and still have enough to pay your creditors.

Avoid loans that include this fee to keep costs down, unless the APR is lower than loans with no origination fee.

Lender features: Some lenders offer consumer-friendly features like direct payment to creditors, which means the lender pays off your old debts once your loan closes, saving you that task.

Other features to shop for include free credit score monitoring and hardship programs that temporarily reduce or suspend monthly payments if you face a financial setback, such as a job loss.

How to qualify for a debt consolidation loan

Build your credit: Loan approval is based mainly on your credit score and ability to repay. It may be possible to get a debt consolidation loan with bad credit, but borrowers with good to excellent credit (690 credit score or higher) have more loan options and may qualify for lower rates. If you have fair or bad credit (690 credit score or lower), it can pay to build your credit before seeking a consolidation loan.

Apply for a joint or co-signed loan: Adding a co-borrower or co-signer to your application can help you qualify for a debt consolidation loan that you wouldn’t be able to on your own due to poor credit or low income. In a joint loan, both borrowers have equal access to the funds, unlike a co-signed loan, in which only the main applicant does. Co-borrowers and co-signers are on the hook for missed payments.

Shop around and pre-qualify: Compare offers from multiple lenders before applying for a debt consolidation loan. One of the easiest ways is by pre-qualifying, which lets you view potential loan terms, including the interest rate, with no hit to your credit score. Most online lenders offer pre-qualification, and you can pre-qualify for free on NerdWallet to compare offers and find the lowest rate.

Preparing for a debt consolidation loan

Plan ahead: Before your loan is funded, create a budget that allocates a percentage of your income toward debt repayment.

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

Commit to the long-haul: Consolidating debt is a smart choice for many, but it’s important to remember the debt doesn’t disappear — it goes somewhere else. Most debt consolidation loans offer terms of two to seven years, so be prepared to stick to your monthly payments over that time period.

Will debt consolidation hurt my credit score?

Consolidating your debt with a personal loan can help — and hurt — your credit score. When you use the loan to pay off your credit cards, you lower your credit utilization, which measures how much of your credit limit is tied up. Lowering your credit utilization can help your credit.

On the other hand, applying for a loan requires a hard credit check, which can temporarily ding your credit score. And if you turn around and rack up new credit card debt, your credit score will suffer.

Making late payments on your new loan can also hurt your credit score, while on-time payments can help.

Other ways to tackle debt

A debt consolidation loan isn’t your only option for getting debt under control.

0% balance transfer credit card: For borrowers with good to excellent credit, transferring debts to a 0% balance transfer card may be a good option, as long as you can pay it off during the introductory period.

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.

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 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.

Last updated on February 1, 2023

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Best Debt Consolidation Loans of February 2023

Frequently asked questions