Best Consolidation Loan Companies
Best Consolidation Loan Company | Multiple Lender Options
6 Best Debt Consolidation Loans of 2021
A debt consolidation loan can help lower your monthly payments if you have high-
interest credit card, medical bills, or payday loans. It may also allow you to create a plan
for eliminating debt.
Finding the best debt consolidation loan for your situation can help you make
that goal a reality. Our selections of the best debt consolidation loans are
listed below. Keep reading to find out which loan may be right for you.
Marcus is the best for direct payments and
Why Marcus is different: Marcus’ loan is guaranteed by Goldman Sachs
Investment Bank, which means that it does not require any
Origination Prepayment, late fees and/or prepayment
charges. Marcus will also send direct payments up to 10 creditors to make it
easier to pay multiple debts simultaneously and to avoid the temptation to
use loan funds for other purposes.
Credit rating required Marcus loans are available to those with good credit.
According to the Goldman Sachs 2020 annual reports, 85% of Marcus loan
applicants have FICO(r), scores of 660 or better.
Prequalification available –Marcus uses the following to evaluate you for
prequalification: Soft credit inquiry . Marcus allows you to see the estimated
loan amounts and terms that you may be eligible for, without having to affect
your credit rating. Credit scores .
Remember that prequalification does not
guarantee loan approval. If you are approved for a loan it could be for
different terms and rates than what you saw in your prequalification.
Competitive interest rates Marcus offers attractive interest rates but you will
need to have excellent credit in order to be eligible for them. For longer-term
loans, interest rates tend to be higher.
Reward you for paying on time Marcus will reward you with an on-time
payment reward if you make 12 consecutive monthly payments on time and
For multiple terms of repayment: Discover is
the best choice
Why Discover is different: Discover has loan terms that range from 36
months to as long as 84 months. Consolidate You can pay off your debt in a
time that suits you and your budget.
Direct payments for debt consolidation –Direct payments can be made to
creditors by Discover
Competitive interest rates Discover has competitive interest rates for
personal loans. This makes it an attractive option to consolidate high-interest
Minimum income requirement –To be eligible for a Discover loan, the
lender will likely require a household income of at least $25,000
Guaranteed money-back Discover offers a 30-day guarantee of your
satisfaction. You can return any loan funds within 30 days if you decide that
you don’t need it or want to repay it.
There is no interest. Discover warns
you that it cannot recover money paid directly to creditors. You will need to
repay Discover for any money it has already distributed to help pay off your
Late fee Discover does not charge origination fees Prepayment fees It may
also charge late payment fees.
Best option for consolidating credit card
Payoff is a standout: The Payoff personal loan is specifically designed for
those who wish to reduce or eliminate high-interest rates Credit card
To help members get back on track, the company offers one-on-
one support. This includes welcome calls and quarterly check-ins for the first
Rates may be lower than the average credit card The interest rates for
Payoff loans are lower than the average APR of 14.75% on credit cards in
February 2021, according to the Federal Reserve.
A lower interest rate can
help you reduce interest costs while paying off your debt. However, the
Payoff APRs may be higher so it’s not guaranteed that you will get a lower
rate than you were paying with your credit cards.
Origination fee The origination fee for payoff can be deducted from the loan
amount at issue. It doesn’t have any application, late, return-check,
prepayment, returned check, or processing fees.
No direct debt payments –Direct payments to creditors are not offered by
Payoff. If you take out a loan from the company you will need to repay each
creditor on your own.
Credit score available Payoff gives you your FICO(r), score each month for
no cost. This allows you to see the effect paying down debt has on credit.
Minimum qualifications –On its website, the lender states that to be
eligible for a Payoff loan, you must have a minimum FICO(r), score of 640
and no delinquent credit accounts.
Best peer-to-peer lender for debt
LendingClub is different:LendingClub permits co-borrowers to apply for
loans. This could increase your chances of getting a consolidation loan,
especially if you are having trouble qualifying.
As a co-borrower, you can
apply for a loan through LendingClub. peer-to-peer lender LendingClub
connects people who are looking to lend money with those who are
interested in borrowing it.
Variable interest rates LendingClub personal loans have high interest
rates. To determine if you are eligible for LendingClub’s highest interest
rates, compare the rate offered to you with the interest rate that you
currently pay on existing debts. This will help you decide if the loan will cost
you less in interest.
There is no prepayment penalty LendingClub provides loans amounts from
$1,000 to $40,000, with either 36-month or 60-month repayment terms.
However, you can repay your loan early and avoid a prepayment penalty.
FeesLendingClub charges an origination fee equal to 3% to 6% of the loan
amount. This is due when you receive your loan. Late payment fees may be
charged by the lender.
Prequalification available –LendingClub pulls your credit reports to
determine your prequalification. This allows you to see your estimated rate,
without having to affect your credit scores.
Prequalification does not
guarantee you will be approved for a loan. If you are, the terms of your loan
might differ from what you were prequalified for.
LightStream is the best for low-interest rates
Why LightStream is different:LightStream, Truist’s online-lending division,
offers attractive interest rates on debt consolidation loans when you sign up
for autopay. LightStream claims it will beat competitors interest rates in
Credit rating required LightStream states on its website, that you will need
to have good credit or excellent credit in order to be eligible for a loan.
Loan amounts up to a large extent LightStream provides loans amounts
from $5,000 to $100,000 with repayment terms ranging between 24 months
and 84 months.
Potentially rapid funding LightStream’s fast funding process means that you
could receive your loan funds in your account the very next day that you
Avant is the best for building credit
Avant is different:Avant is an online lender that accepts applicants with bad
credit. Avant claims that its customers with credit scores between 600-700
have the majority of their loans.
Find out your potential rate Avant allows you to check your estimated rate,
loan term and credit score without affecting your credit scores. You can also
compare Avant’s offer with other loan offers from debt consolidation lenders.
Online application Online loan applications are possible. The lender may
allow you to receive funds within the next day.
Higher interest rates Avant lends to people with poor credit histories even
though they are considered by the lender. However, Avant’s interest rates
can be higher than other lenders.
Add up the fees Avant charges late payment and insufficient funds fees, as
well as an administrative fee of up to 4.75 percent on loans.
Here are some things you need to know
about debt consolidation loans
A debt consolidation loan is a way to reduce debt by streamlining your
finances and consolidating multiple high-interest debts into one monthly
payment. This can be ideally at a lower interest rate. You repay the loan in
accordance with its terms.
Depending on your credit, you may be able to qualify for a lower interest
rate than what you’re paying on your current debts. If you can’t qualify for a
lower rate, you may want to consider another way to pay down your debt ,
such as a balance transfer credit card.
Online calculators can help you determine if a consolidation loan is right for
you. They allow you to compare interest and fees with what you are currently
paying on your accounts.
Monthly payments lower
While debt consolidation loans may offer lower monthly payments by
increasing your loan term, you will likely pay more interest for a longer
It is possible to decide that a loan to reduce your monthly debt
payments is worthwhile, even though it will result in higher interest rates
over the life of your loan. Before you make a decision, weigh the pros and
Consolidating your debt into one loan won’t make you more financially
healthy if you keep accruing additional debt. It’s a smart idea to examine
how your expenses compare with your income before you take out a
It’s possible that you will need to change your spending habits to keep
your finances in check.
These loans: How did we choose them?
To find our top choices, we reviewed over a dozen debt consolidation loans
from different lenders.
We considered interest rates, fees structures, loan
amounts and repayment options when making our selections