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Top 5 Personal Loans for Debt Consolidation

August 06, 2019
Sarah PritzkerBySarah PritzkerAug. 06, 2019
If you need to consolidate debt, a personal loan is a solid option
If you need a personal loan to consolidate credit card debt, there are plenty of lenders who can help you pay off your debt faster and more efficiently.

When to Consolidate Your Debt with a Personal Loan

Consolidating your debt via a personal loan can be a good idea in the following situations:

  • You want to pay a lower interest rate

The best way to alleviate debt is to pay it off responsibly one month at a time. Unfortunately, too many people are struggling with massive interest rates that don't let them get ahead of their debt. Lowering your interest rate can help you put more money towards your actual debt and eventually see the light at the end of the tunnel.

  • You have several debt payments to make each month

Paying off multiple credit cards each month can be a game of Jenga, one wrong move and the entire structure crumbles. Combining your debt into one simple payment makes it much easier to manage your monthly debt expenses and stay on top of your finances in general.

  • You’re working with lousy terms

If you are digging yourself deeper into debt because of high monthly payments that you can’t meet, a personal loan can help you pay less each month. It might take longer to pay off the debt, but at least you’ll be making consistent monthly payments, instead of racking up more debt.

Do the Math First

The most important question for you to ask is, will this loan save you money? Pay attention to the fees and rates that are being offered, so you don't get stuck with a bigger problem even than you started with. Here's an example of how a personal loan can help with your debt consolidation:

Let’s say you have a combined credit card debt of $10,000. You are currently paying 15% interest on that debt. Over approximately 4 and a half years, you’ll pay $3,750 in interest! Now, let's say you lower your interest to 10% for a 2-year loan. By the end of this loan term, you'll have paid out $1,075. That's a $2,675 savings in interest payments for the same $10,000 debt that you’ve now paid off.

Top Loan Providers for Debt Consolidation

If a personal loan is the right idea for you, then get the best rates, repayment terms, and benefits from the leading lenders in the industry. Here are the top picks for personal loans in 2019:

 sofiMinimum credit score: 680

Loan amount: up to $100,000

Loan term: 24 - 48 months

APR range: 5.73% - 16.59%

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 marcusMinimum credit score: 660

Loan amount: $3,500 - $40,000

Loan term: 36 - 72 months

APR range: 6.99% - 28.99% **

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 fionaMinimum credit score: 580

Loan amount: $1,000 - $100,000

Loan term: 24 - 48 months

APR range: 3.84% - 35.99%

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 MonevoMinimum credit score: 580

Loan amount: $1,000 - $100,000

Loan term: 3 - 96 months

APR range: 3.99% - 35.99%

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 LendingClubMinimum credit score: 600

Loan amount: $1,000 - $40,000

Loan term: 3 or 5-year terms

APR range: 6.95% - 35.89% ***

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1. Sofi

  • Minimum credit score: 680
  • Loan amount: up to $100,000
  • Loan term: 24 -84 months
  • APR range: 5.73% - 16.59%

Why go with SoFi? It’s a social company with extra benefits like networking, unemployment protection, and employment searches

SoFi is an excellent lender to work with on all fronts, but it really comes through for borrowers consolidating debt. It has no fees, APRs of 5.73% - 16.59%, high loan limits up to $100,000, and flexible repayment terms of 36-48 months. Best of all is SoFi’s attitude towards borrowers. Once you take out a loan from SoFi, you become a member of a close-knit society that really looks out for its own. As well running regular social events such as networking lunches, SoFi has a unique unemployment grace period that allows you to defer your loan payments in case you become unemployed, which can be a lifesaver if your in the process of consolidating all your debt.

SoFi SoFi Check SoFi Rates

2. Marcus

  • Minimum credit score: 660
  • Loan amount: $3,500 - $40,000
  • Loan term: 36 - 72 months
  • APR range: 6.99% - 28.99% **

Why go with Marcus? It lets you defer payments after good behavior

Marcus by Goldman Sachs is backed by a company that’s been around for almost 150 years! Those are numbers you just can’t argue with, and so are the other stats on Marcus’ docket when it comes to debt consolidation. You can get tremendous repayment terms from 36-72 months, loan amounts from $3,500 - $40,000, and APRs of 6.99% - 28.99% **. The low is slightly higher than some competitors (but not by much), and the high is much lower than other lenders. Marcus also has an incredible feature that lets you skip a payment once every year if you have been paying your loan back responsibly. Finally, with no fees to pay, it’s not surprising that Marcus is one of the leading lenders in the industry.

Marcus Marcus Check Marcus Rates

3. Fiona

  • Minimum credit score: 580
  • Loan amount: $1,000 - $100,000
  • Loan term: 24 - 48 months
  • APR range: 3.84% - 35.99%

Why go with Fiona? It offers high loan amounts from prominent lenders

Fiona offers APRs as low as 3.84%, making a solid choice if you’re looking to consolidate debt! Also, you can borrow anything from $1,000 - $100,000, so Fiona really covers any type of borrower. Finally, this lender works with credit scores as low as 580. That is one of the lowest score acceptances you’ll find anywhere. Just bear in mind that Fiona is not a direct lender, so terms can change depending on who you end up with. Fees will also vary based on lender.

Fiona Fiona Check Fiona Rates

4. Monevo

  • Minimum credit score: 580
  • Loan amount: $1,000 - $100,000
  • Loan term: 3 - 96 months
  • APR range: 3.99% - 35.99%

Why go with Monevo? It offers tremendous loan term flexibility

Monevo is another reliable lender that offers some of the most favorable terms you’ll find anywhere in the industry. You can get loans from $1,000 - $100,000 with flexible repayment terms ranging from 3-96 months, which can come in useful if you’re trying to get out of debt. What’s more, Monevo charges some of the lowest introductory APRs anywhere, starting at 3.09% if your credit can swing it. This lender will even work with low credit scores of 580, so anyone can look forward to a Monevo loan.

Monevo Monevo Check Monevo Rates

5. LendingClub

  • Minimum credit score: 600
  • Loan amount: $1,000 - $40,000
  • Loan term: 3- or 5-year terms
  • APR range: 6.95% - 35.89% ***

Why go with LendingClub? You only need a credit score of 600 and there is no prepayment fee

LendingClub has some of the most flexible terms around. You can get a loan for anywhere from $1,000 - $40,000 with repayment terms of 3 or 5 years. APRs are pretty average, ranging from 6.95% - 35.89% *** depending on creditworthiness. Best of all, though, LendingClub works with credit scores as low as 600, making it a worthwhile choice for debt consolidation if your credit record has seen better days. Various fees such as origination fees and prepayment penalties will vary based on the specific lender you go with, but you can expect a 1% - 6% origination fee, $15 unsuccessful payment fee, and late payment fee of 5%.

LendingClub LendingClub Check LendingClub Rates

What Now?

Going with a reputable lender is the first step in the right direction towards paying off your debt responsibly. Here are a few more tips for debt consolidation ease:

1. Make your payments every month and on time. The worst thing you can do after taking out a loan to consolidate debt is to be delinquent with the payments. Pay on time, and watch your debt shrink and your credit score rise.

2. Read online reviews. By reading reviews of the top loan companies, you'll to get a better feel for the type of lender you’re getting into bed with. Advertisements can be hyped up, but real user testimonials tell you the true story.

3. Make sure you find a lender that will give you a lower APR than you are currently paying. Otherwise, it doesn’t pay to consolidate your debt. Since there is competition in the industry, this shouldn't be too hard. What’s more, you can usually get other benefits thrown into the deal.

4. Look for lenders that won’t hurt your credit with a hard pull. Many top name lenders will only do a soft credit pull when you apply and this helps because it means your credit score won’t be affected and you’ll have more options when consolidating your debt.

About The Author

Sarah PritzkerBySarah PritzkerAug. 06, 2019
Sarah Pritzker is a content writer with years of experience and a keen interest in the vast world of online consumer products. She enjoys helping readers make sense of the options on the market in financial industries including credit reports, business loans and car loans.
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