Best Debt Consolidation Companies
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Are you juggling multiple credit card payments each month? Are you paying off multiple medical bills in monthly installments? Maybe you’ve run up the balances on three of your favorite department store credit cards, and you’re struggling to keep up with all these payments.
A debt consolidation loan could help.
In debt consolidation, you take out a single personal loan with a lender. You then use that loan to pay off the credit card, personal loan, medical, and other debts you owe. You make regular monthly payments, with interest, on your new debt consolidation loan until you pay off what you’ve borrowed.
The benefit is that you swap several monthly payments for one, making it less likely that you’ll forget to make a payment. You might also qualify for a debt consolidation loan with an interest rate that is lower than the rates you were paying on your credit card and personal loan debt. If it is, you might now have a lower monthly payment than you did when making several monthly payments.
A debt consolidation loan can also save you in interest. Maybe you owe money on four credit card accounts with interest rates of 19% or higher. If you qualify for a debt consolidation loan with an interest rate of 10% and use the funds from this loan to pay off your credit card debt, you’ll save a significant amount of money in interest payments by swapping your high credit card interest rates with one 10% rate.
There are challenges, though, with debt consolidation. Companies might charge high fees to consolidate your debt. Others might charge interest rates that are as high as the ones attached to the debt you’ve been struggling to pay off. And you might not be able to borrow enough to cover all your high-interest-rate debt.
The key to a successful debt consolidation is to end up with a new loan with a monthly payment that you can comfortably afford. It’s also important to work with a company that provides good service and low fees and interest rates.
How do you find the right debt consolidation provider? Here is our list of the six debt consolidation companies that can relieve you from the hassle of multiple monthly payments.
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Best debt consolidation companies
You’ll find plenty of debt consolidation companies eager to work with you. The key is finding those companies that provide low interest rates and fees while offering top customer service.
You should also consider your own needs. Do you need to consolidate a lot of debt? You’ll need to work with a company that offers larger loan amounts. Are you interested in the lowest monthly payment? Then, you’ll want to work with a company that offers both low interest rates and longer terms.
And if you want your debt consolidated as quickly as possible? Some debt consolidation companies promise to close your loan and provide your funds in as little as 24 hours.
Here are six of the top debt consolidation companies. While compiling this list, we researched debt consolidation companies’ fees, average interest rates, and term length. We also looked at how quickly they closed loans.
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Overview of the best debt consolidation companies
Name | Best for |
SoFi | Borrowing a lot of money |
Upgrade | Borrowing a little money |
Upstart | Borrowers with weaker credit |
Wells Fargo | Working with a brand-name bank |
LightStream | No-fee loans |
Reach Financial | Quick consolidatation |
SoFi
SoFi is a lender that provides personal, home, and student loans. It also offers its credit card. It's a popular choice among those looking for personal loans because it charges no fees for these loans, and you can borrow up to $100,000.
As with all personal loans, you can use the funds from your SoFi loan to pay off your existing credit card debt. You'd then make one payment each month to SoFi, with interest, until you pay off your personal loan.
Interest rates on SoFi loans range from 8.99% to 25.81%. You'll qualify for an interest rate discount of 0.25% [DR1] if you set up autopay on your loan payment. Your interest rate will depend on the strength of your credit, with borrowers with higher credit scores qualifying for loans with lower interest rates. SoFi says that its credit check will not hurt your credit score.
SoFi says 82% of its loan applications were funded on the same day. This means that most approved borrowers received their money the same day they applied for their loan.
The downside to a SoFi loan? It's not great for borrowers looking for a smaller amount of money. SoFi loans range from a minimum of $5,000 to a maximum of $100,000. If you want to borrow a smaller amount, you'll need to apply with a different lender.
- Fees: SoFi charges no origination fees or prepayment penalties
- Where to apply: SoFi
- Where can you apply for a SoFi loan? You can apply for a SoFi loan in most states. However, SoFi does not hold consumer lending licenses in Alaska, Arizona, Arkansas, Connecticut, Florida, Georgia, Hawaii, Kentucky, Massachusetts, Mississippi, Nebraska, Ohio, Utah, West Virginia and Wisconsin.
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Upgrade
Upgrade is a good choice if you need to borrow less money. This lender offers personal loans ranging from $1,000 to $50,000. Upgrade provides its funds quickly, too. The company says it sends your money directly to a bank account you choose within one day of approving you for a loan.
You can choose from loan terms of 24 to 84 months or two to seven years. Upgrade charges interest rates of 8.49% to 35.99%. The company says that your interest rate will depend on your credit score. Again, the higher your score, the lower your Upgrade personal loan’s interest rate will be.
The negative of applying with Upgrade? This lender charges an origination fee ranging from 1.85% to 9.99% of the amount you [DR2] are borrowing. Upgrade will deduct this fee from your loan amount. You’ll qualify for a lower origination fee if you set up autopay on your loan.
Here’s an example, provided by Upgrade, on how this works: If you take out a $10,000 loan with a 36-month term and a 17.59% APR — made up of 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 three years of the loan, your payments would total $12,293.46.
- Fees: Upgrade charges an origination fee of $1.85% to 9.99% of the amount you borrow
- Where to apply: Upgrade
- Where can you apply for an Upgrade loan? Upgrade offers loans in all 50 states.
Upstart
Have a lower credit score? You might try applying for a personal loan with Upstart. This lender says it doesn't rely solely on your credit score when determining whether you qualify for a loan. It also looks at factors such as your education and employment and how likely you are to repay what you borrow. If you have a steady monthly income, Upstart might approve you for a personal loan even if you have a weaker credit score. Upstart says you'll need a credit score of at least 300 to qualify for a personal [DR3] loan.
You can apply for an Upstart personal loan from $1,000 to $50,000. Your interest rate will range from 5.2% to 35.99% [DR4], depending on your credit and income. You also won't pay any prepayment fees if you pay off your debt consolidation loan before its term ends.
Upstart isn't quite as flexible regarding how long you have to repay your loan. The company only offers two options: a debt consolidation loan with a three-year term or one with five. Like other debt consolidation providers on this list, Upstart works quickly. If Upstart approves your loan application by 5 p.m. Eastern Standard Time on a regular business day, it will send your funds the next day.
On the negative side, Upstart charges an origination fee of as high as 12% [DR5] of the amount you are borrowing. This amount will be deducted from your loan amount. If you borrow $10,000 and your origination fee is 10%, you'll be charged $1,000, which will be deducted from the amount you borrow, leaving you with $9,000.
- Fees: Upstart charges an origination fee of as much as 12% of what you borrow
- Where to apply: Upstart
- Where can you apply for an Upstart loan? Upstart personal loans are available in all 50 states.
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Wells Fargo
Do you prefer working with a brand-name lender? Maybe you have more trust in a national bank with an established history. If so, you might consider taking out a debt consolidation loan with Wells Fargo.
Wells Fargo offers personal loans from $3,000 to $100,000 and charges no origination fees or prepayment penalties. Depending on your credit, the bank [DR6] also offers reasonable interest rates ranging from 8.49% to 24.49%.
Those interest rates include what Wells Fargo calls a "relationship discount" of 0.25%. To qualify for this discount, you must have a Wells Fargo consumer checking account and must make automatic payments on your debt consolidation loan from a Wells Fargo account. Wells Fargo says it usually approves or rejects loan requests on the same day you apply.
The other possible negative with a Wells Fargo loan? You must have had an open Wells Fargo account for at least 12 months before applying for one. If you need money now and are not already a Wells Fargo customer, this option might not work.
- Fees: No origination fees or prepayment penalties
- Where to apply: Wells Fargo debt consolidation loans
- Where can you apply for a Wells Fargo loan? Wells Fargo operates in all U.S. states except Hawaii, Louisiana, Michigan, Missouri, Oklahoma, Kentucky, Ohio, Indiana, Massachusetts, West Virginia, Rhode Island, Vermont, Maine and New Hampshire.
LightStream: Best if you don’t want to pay any fees
If you hate paying fees? A LightStream debt consolidation loan might be a good choice for you. LightStream charges no origination or prepayment fees.
LightStream also offers plenty of options for borrowers. LightStream offers debt consolidation loans for as little as $5,000 if you want to borrow a small amount of money. If you want to borrow more? You can take out a LightStream loan for as much as $100,000. [DR7]
LightStream charges interest rates that range from 8.99% to 25.49%. If you sign up for autopay, you will receive an interest rate discount of 0.50%. To qualify for the lowest possible interest rate, you'll also need excellent credit, according to LightStream. Don't expect that 8.99% rate unless your credit score is at or above 800.
LightStream also offers its Rate Beat program. Under this program, LightStream will offer you an interest rate of .10% points lower than the rate offered by any competing lender's unsecured loan if approved for that lower rate no later than 2 p.m. Eastern Time, two business days before your loan funding.
- Fees: LightStream charges no origination or prepayment fees
- Where to apply: LightStream
- Where can you apply for a LightStream loan? LightStream offers loans in all 50 states.
Make a commitment to get out of debt with a dedicated team that will support you every step of the way, providing you with the necessary resources and assistance to achieve financial freedom. You’ll get the help you need without paying any fees for our services until your debts are reduced and you save money.
See if you qualify for credit card relief.
Reach Financial
Looking for funds quickly? Reach Financial promises that within 24 hours of your loan approval, your funds will be available to pay the creditors named on your Truth-in-Lending Disclosure, the document that states important information about your loan, including how much you are borrowing and what interest rate you are paying.
There are some limits with a Reach Financial debt consolidation loan, though. You can only borrow from $3,500 to $40,000. And you can only choose a 24- to 60-month term for your loan or two to five years [DR8].
Interest rates, though, can be low. If you have good credit, you can qualify for an interest rate as low as 5.99%. Depending on your credit, your interest rate can soar as high as 35.99%.
On the downside, Reach Financial charges an origination fee ranging from 0% to 8% of the amount you borrow.
As an example of how this works, Reach Financial states that if you are approved for a five-year loan of $10,000 with an interest rate of 8.93% and an origination fee of $500, your loan would have a total APR — a measure of the cost of your loan including both interest and fees — of 9.80%. You'd then pay $207.20 a month for 60 months until your loan is paid off, resulting in a total payment of $12,435.
- Fees: Reach Financial charges an origination fee of 0% to 8% of your loan amount.
- Where to apply: Reach Financial
- Where can you apply for a Reach Financial loan? Reach Financial is not licensed to provide loans in the states of Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, Ohio, Utah, Vermont, Virginia, West Virginia and Wyoming.
Best debt consolidation companies summary
Lender name | Origination fees | Interest rates | Amount you can borrow |
SoFi | None | 8.99% to 25.81% | $5,000 to $100,000 |
Upgrade | 1.99% to 9.99% of loan amount | 8.49% to 35.99% | $1,000 to $50,000 |
Upstart | Up to 12% of loan amount | 5.2% to 35.99% | $1,000 to $50,000 |
Wells Fargo | None | 8.49% to 24.99% | $3,000 to $100,000 |
LightStream | None | 8.99% to 25.49% | $5,000 to $100,000 |
Reach Financial | 0% to 8% of loan amount | 5.99% to 35.99% | $3,500 to $40,000 |
Why you should consider debt consolidation
Debt consolidation isn’t for everyone. But if you owe tens of thousands of dollars of credit card debt with high interest rates? If you can qualify for a personal loan with an interest rate near the 10% range, you could save thousands of dollars in interest by using the funds from these loans to pay off your high-interest-rate credit card debt.
You’ll be swapping credit card interest rates that could be as high as 29.99% with a personal loan rate that could be half of that or lower.
Just be sure that you take out a personal loan with a monthly payment you can afford. You don’t want to struggle to pay your debt consolidation loan. If you do and you fall behind? Your credit score will fall every time you pay 30 days or more past your due date. A single late payment could cause your three-digit FICO credit score to tumble by 100 points or more.
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The bottom line
Consolidating your credit card and personal loan debt into a single loan could help you gain control over your financial health. The key is to do your research: You want to find a debt consolidation company that offers a loan with the lowest interest rates and fees. If you do, you can simplify your life by swapping several credit card and personal loan payments with one monthly charge.
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Writer
Dan Rafter is a freelance writer who has more than 20 years experience covering personal finance. He's written for the Chicago Tribune, Washington Post, Bankrate, CreditCards.com, Rocket Mortgage, NortonLifeLock and several others.
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