Debt Consolidation Loan Rates 2026
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Hear from our editors: Best debt consolidation loans of 2026
Updated September 23, 2026
This date may not reflect recent changes in individual terms.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.
Written by: Jennifer Brozic
Edited by: Erin Dunn, Managing Editor, Loans
Key Takeaway: A debt consolidation loan can simplify multiple debts into one payment and potentially lower interest costs, but it typically only works in your favor if you secure a better rate and stay disciplined about not taking on new debt.
The best debt consolidation loan depends on your credit, how much you want to borrow and how quickly you want to repay your debt. If you qualify, unsecured personal loans usually offer the lowest rates and don’t require collateral like a vehicle.
If you have strong credit, lenders like SoFi, LightStream and Wells Fargo offer competitive rates and large personal loan amounts. If you’re building credit, Avant and Happy Money are good options to consider. Lenders like Discover that offer direct payments for debt consolidation to your creditors also stand out for providing simplicity.
Before you apply, check with several lenders to see if you prequalify for a personal loan.
| Lender | Best for | Loan amounts | APRs |
|---|---|---|---|
| Discover | Direct payments for debt consolidation | $2,500 to $40,000 | 6.99% to 24.99% |
| Happy Money | Credit card debt consolidation | $5,000 to $50,000 | 8.95% to 35.99% |
| LightStream | Low interest rates | $5,000 to $100,000 | 7.99% to 25.44% |
| Avant | People building credit | $2,000 to $35,000 | 9.95% to 35.99% |
| SoFi | Member perks | $5,000 to $100,000 | 6.49% to 35.49% |
| Wells Fargo | In-person assistance | $3,000 to $100,000 | 6.74% to 26.74% |
| American Express | Existing customers | $3,500 to $50,000 | 6.99% to 19.99% |
- What is a debt consolidation loan?
- How do I compare and choose a debt consolidation loan?
- When is a debt consolidation loan a good idea?
- How to get a debt consolidation loan
- What are alternatives to debt consolidation loans?
- Does a debt consolidation loan affect your credit?
- FAQs about debt consolidation loans
Good for direct payments for debt consolidation: Discover
Why a Discover personal loan stands out: Discover personal loans offer direct payments to your creditors on your behalf, making debt consolidation a hands-off process. Keep in mind that you can’t use a Discover personal loan to pay off a Capital One credit card or Discover credit card directly.
Pros
- Competitive rates
- No origination fee
- Funding as soon as the next business day
- Flexible loan repayment terms from 36 to 84 months
Cons
- Minimum income requirement
- Co-applicants not accepted
Read Discover personal loan reviews to learn more.
Good for credit card debt consolidation: Happy Money personal loans
Why a Happy Money personal loan stands out: Happy Money’s personal loan is designed for people who want to pay off high-interest credit card debt. Happy Money matches you with a partner lender and, if you qualify, will show you different options tailored to your debt-payoff goals including the lowest rate and fastest payoff plan.
Pros
- Solid loan amounts range of $5,000 to $50,000
- Prequalify to check potential rates with a soft credit check
- Direct payments to creditors
- No late fees
Cons
- Origination fee
- Not a direct lender
- Not available in all states
Read reviews of Happy Money personal loans.
Good for low interest rate: LightStream personal loans
Why a LightStream personal loan stands out: LightStream, the online-lending division of Truist, offers competitive interest rates for debt consolidation loans when you enroll in autopay. Its “rate beat” program also promises to beat a competing lender’s rate by a small percentage point if you are approved for a lower rate elsewhere and meet certain conditions.
Pros
- Same-day funding possible
- No origination, prepayment or late payment fees
- Flexible repayment term lengths
Cons
- Need a strong credit and financial profile to qualify
- No option for preapproval to check potential rate
- Customer service limited to email only
Read reviews of LightStream personal loans.
Good for people building credit: Avant personal loans
Why an Avant personal loan stands out: Avant is an online lender that considers people who don’t have perfect credit. In fact, Avant says on its website that most of its customers have credit scores between 600 and 700 (though its minimum requirement is 550). Keep in mind that staying current on monthly loan payments can help improve your payment history, which can lead to better credit scores over time. Avant does perform a hard credit inquiry if you officially apply for a loan, which can have a minor short-term impact on your scores.
Pros
- Prequalification to check potential rate without affecting credit
- Possible fast next-day funding
- Good range of loan amounts: $2,000 to $35,000
Cons
- High maximum APR
- May charge a high upfront loan administration fee
- Fees for late payments and insufficient funds
Read reviews of Avant personal loans.
Good for membership perks: SoFi personal loans
Why a SoFi personal loan stands out: Getting a personal loan with SoFi offers unique membership perks like financial planning services and special events. Members can also access offers on flights, hotels and rental cars via SoFi Travel.
Pros
- Competitive rates and interest rate discount for automatic payments
- Same-day funding possible
- Direct payments for debt consolidation
- Large loan amounts available up to $100,000
Cons
- Strict eligibility requirements
- Origination fees up to 7% of loan amount
Read reviews of SoFi personal loans to learn more.
Good for in-person assistance: Wells Fargo personal loans
Why a Wells Fargo personal loan stands out: Wells Fargo has thousands of physical branches across the United States, which can be particularly helpful for existing customers who value in-person assistance and want the convenience of managing their personal loan through a well-established bank.
Pros
- Competitive rates
- Same-day funding possible
- Good loan amounts range: $3,000 to $100,000
Cons
- Must be an existing Wells Fargo customer to apply
Read reviews of Wells Fargo personal loans.
Good for existing customers: American Express personal loans
Why an American Express personal loan stands out: American Express personal loans are offered exclusively to existing eligible cardholders. If you’re currently a cardholder, you can see personal loan offers without a hard credit inquiry. But keep in mind that if you’re approved for a loan, you won’t be able to use it to pay off American Express credit cards.
Pros
- Fast funding possible as soon as the next day after approval
- No origination fee
- Competitive rates
Cons
- Must be an existing American Express cardholder to apply
Read reviews of American Express personal loans to learn more.
What is a debt consolidation loan?
A debt consolidation loan is a personal loan that can provide debt relief by simplifying your finances and combining multiple high-interest debts into a single payment each month — ideally with a lower interest rate. The funds from the new loan are used to pay off your existing debts, and then you repay the loan according to its terms.
Lower rates
You may qualify for a lower interest rate than what you’re currently paying on your existing debts, especially if your credit score has improved recently. If you’re unable to secure a lower rate from a debt consolidation loan, it might be worthwhile to explore other debt repayment options, such as a balance transfer credit card.
Lower monthly payments
Some debt consolidation loans can lower your monthly payments by extending the loan term. But this often results in paying more in interest over the life of the loan. While reduced monthly payments can provide immediate relief, the additional interest over time is an important consideration.
How do I compare and choose a debt consolidation loan?
If you’re thinking about a debt consolidation loan, shopping around is a smart way to compare loans and see what may work best for you. Here are a few key factors to keep in mind when comparing different loans.
- Interest rate — Your interest rate directly impacts how much your monthly payments will be. The lower your rate, the less interest you’ll pay over the life of the loan (compared to a higher rate with the same loan length).
- Fees and hidden costs — Origination fees and late payment fees are common in personal loans but keep an eye out for any prepayment fees or other uncommon fees.
- Loan term length — Keep in mind that the longer your loan term is, the more interest you’ll pay over the life of your loan. So, while having a smaller monthly payment may sound appealing, you’ll likely end up paying more interest in the end.
- Monthly payments — You should be able to easily fit the monthly payment into your budget. If you can’t, you may have to borrow less or look for a longer term length to make your payments more manageable.
When is a debt consolidation loan a good idea?
A debt consolidation loan may be a good idea when you qualify for a lower rate than the rate on your existing debt. If you can commit to not running up new balances on your credit cards, a debt consolidation loan can help you eliminate your debt.
A debt consolidation loan also can combine all your debts into one monthly payment, simplifying how you pay.
But if you don’t qualify for a lower rate or can’t afford to make a new monthly payment, a debt consolidation loan probably won’t help your finances.
How to get a debt consolidation loan
To get a debt consolidation loan, start by verifying the interest rates on your debt and checking your credit. Compare rates with several lenders by prequalifying online with a soft credit inquiry before applying. Keep in mind that the terms could change once you do apply. You’ll also want to decide if you prefer a lender that pays off your creditors directly or if you prefer to handle paying off your debt.
- Determine your total debt — Figuring out how much debt you’d like to consolidate can help you narrow down what lenders may work for you. Some lenders may not lend the amount you need to consolidate. Make sure you verify the interest rate you’re currently paying on all of your debt.
- Check your credit — Knowing what your credit score is before applying for a loan can help you determine what lenders may be more likely to approve your loan. If you find a mistake on your credit reports, dispute the error with the credit bureaus.
- Compare loan offers — Now you can start prequalifying for debt consolidation loans. You’ll be able to compare the rates and terms to choose the best one for you. Keep in mind that prequalifying doesn’t guarantee you’ll be approved.
- Apply — Once you’ve determined which debt consolidation loan works best for you, apply! Just remember that submitting a formal application may result in a hard credit inquiry.
- Pay off debt — If you’re approved for your loan and have the funds, you can start paying off your debt. Some lenders will pay off your debt for you. Many lenders will send your funds within one to two business days.
What are alternatives to debt consolidation loans?
Balance transfer card
A balance transfer card can allow you to move high-interest debt from one or more credit cards to a new card, often with an introductory 0% APR period. This can save you a significant amount on interest if you pay off the balance within the promotional period.
However, be mindful of any balance transfer fees and ensure you have a plan to pay off the balance before the introductory period expires.
Debt payoff plan
Creating a debt payoff plan can help you tackle your debts without needing a loan. Two popular strategies are:
- Debt avalanche: Focuses on paying off debts with the highest interest rates first while making minimum payments on other debts. Once the highest interest debt is paid off, move to the next highest, and so on. This method minimizes the amount of interest you pay over time.
- Snowball method: Focus on paying off your smallest debt first while making minimum payments on larger ones. As each small debt is paid off, you gain momentum (like a snowball rolling downhill) to tackle larger debts. This method can be motivating and help you stay on track.
Tap into home equity
Using a home equity line of credit (HELOC) or a home equity loan can be an appealing option if you have significant equity in your home. These financing options typically offer lower interest rates compared to unsecured loans because they are backed by your property. Just be cautious: failing to make payments can put your home at risk.
Negotiating with issuers or billers
Sometimes, a simple conversation can make a big difference. Contacting your creditors to negotiate better terms can be useful. This conversation may lead to lower interest rates, reduced fees or a more manageable payment plan. Many creditors are willing to work with you, especially if you’ve been a reliable customer
Does a debt consolidation loan affect your credit?
A debt consolidation loan can help your credit over time if you consistently make on-time payments and avoid taking on new debt. Paying off high-interest, revolving credit card balances can lower your credit utilization ratio, a critical credit score factor.
Making on-time payments is the most important credit score factor, but you’ll also want to avoid closing older credit card accounts since those boost the length of your credit history.
Keep in mind that your credit may dip slightly because of the new loan and credit inquiry, but it’s temporary.
Our methodology: How we pick the best personal loans
Credit Karma’s editors evaluate the best personal loans by reviewing key features of dozens of popular lenders. Those features fall into three important categories:
- Affordability: We start by checking if a lender’s rates are competitive: are they higher than average or are they lower than many competitors? From there, we analyze if fees — particularly an origination fee — may make your loan more unaffordable. Last, we’ll check if the lender offers rate discounts for items such as automatic payments that may reduce your rate.
- Customer-friendly features: Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, do they offer a wide range of loan amounts for people with different borrowing needs? Do they offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can they fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
- Transparency: We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.
Estimate personal loan costs
To better understand the total cost of any personal loans you’re considering, use an online calculator like Credit Karma’s simple loan calculator. A loan calculator can help you estimate your monthly payment and how much you’d pay in interest versus principal over the length of the loan.
FAQs about debt consolidation loans
If you qualify, you may be able to combine some or all of your unsecured debt into a single debt consolidation loan. With this type of loan, you’ll receive funds to pay off your other debt — such as personal loans and credit cards. Once you do that, you’ll make just one payment every month to repay your debt consolidation loan.
A debt consolidation loan is a type of unsecured personal loan, meaning it’s not secured by collateral, such as a house or car. An unsecured personal loan generally has a fixed interest rate and is repaid in installments over a set period of time. Debt consolidation loans are available from a range of lenders, including banks, credit unions and other installment loan lenders.
Applying for a debt consolidation loan can temporarily lower your credit scores by a few points since the lender will usually perform a hard inquiry. However, paying off your credit cards may provide a boost to your scores since you’ll lower your credit utilization. Remember to keep credit card account balances low and always pay on time to improve your credit.
On the plus side, a debt consolidation loan can potentially lower your interest rate, and you’ll have only one payment to remember each month. On the other hand, a debt consolidation loan likely won’t help if you pay a higher interest rate, take on expensive fees or keep spending on the credit cards you paid off.
Generally, the stronger your credit, the better terms you may receive for your loan. You’ll usually want at least fair credit, and people with good or excellent credit will likely receive the most competitive terms.
Debt consolidation loans can be used to consolidate credit card debt, personal loans, medical bills and more. Be sure to check if your lender has any limitations as each lender may be different.
About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.
*Annual Percentage Rates, terms of loan and monthly payments presented are estimated based upon analysis of information you entered, your credit profile and/or available rate information from lenders. While efforts have been made to maintain accurate information, the loan information is presented without warranty and the estimated APR or other terms presented do not bind any lender. Lenders generally have a range of available APRs (for example, a lender’s range might be 5% to 36%) and only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend upon factors evaluated at the time of application, which may include credit score, loan amount, loan term, credit usage and history. All loans are subject to credit review and approval. When evaluating offers, please review the lender’s Terms and Conditions for additional details. The loan amount shown here may include possible origination fees charged by the lender. If the lender charges an origination fee, it may be deducted from your loan amount. Consider adjusting your loan amount to account for this. This estimate does not include any optional or add-on products you may be offered by the lender.
††The opinions you read here come from our editorial team. Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when it’s posted.
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