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WiseIQ Editorial Team
Reviewed by certified financial experts · Updated March 2026
Debt consolidation can be a powerful tool for getting out of debt faster and paying less interest. By combining multiple high-interest debts (especially credit cards at 20%–25% APR) into a single personal loan at a lower rate, you can save thousands and simplify your finances. Here are the best personal loans for debt consolidation in 2026.
Our Top Picks
Marcus by Goldman Sachs
Best OverallAPR Range
6.99%–24.99%
Loan Amount
$3.5K–$40K
Origination Fee
$0
Min. Credit Score
660
Terms
36–72 months
On-time Payment Reward
1 month skip
Why we recommend it: Zero fees (no origination, no prepayment, no late fees). Competitive rates for debt consolidation. Unique on-time payment reward: make 12 consecutive on-time payments and you can skip one month. Best for borrowers with 660+ credit.
WiseIQ Expert Tip
Before accepting any loan offer, calculate the total cost of the loan (principal + all interest + fees). A lower monthly payment often means paying thousands more over the life of the loan.
Last reviewed: April 2026
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Happy Money (Payoff Loan)
Best for Credit Card DebtAPR Range
11.72%–24.67%
Loan Amount
$5K–$40K
Origination Fee
1.5%–5%
Min. Credit Score
640
Purpose
Credit card debt only
Free FICO Score
Yes
Why we recommend it: Specifically designed for credit card debt consolidation. Provides free FICO score monitoring and financial coaching. Research shows Happy Money customers see an average 40-point credit score increase after paying off their credit cards.
Last reviewed: April 2026
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LightStream
Best Rates for Good CreditAPR Range
6.99%–25.49%
Loan Amount
$5K–$100K
Origination Fee
$0
Min. Credit Score
660
Same-day Funding
Yes
Rate Beat
+0.10% vs competitors
Why we recommend it: Best rates for 700+ credit scores. No fees, same-day funding, and a Rate Beat program — if you get a lower rate elsewhere, LightStream will beat it by 0.10%. Best for large debt consolidation ($25K+).
Last reviewed: April 2026
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Expert Insight
Based on our analysis of thousands of consumer financial profiles, the most common mistake people make is focusing solely on the interest rate without considering total loan cost, fees, and repayment flexibility. Always compare the APR — not just the rate — and read the fine print on prepayment penalties before signing.
Who Should Look Elsewhere
A personal loan is not the right tool for every situation. Consider alternatives if any of the following apply to you:
- You have home equity: A HELOC typically offers rates 5–10% lower than personal loans. If you own your home, compare HELOC rates before taking a personal loan.
- Your debt is primarily credit card debt: A balance transfer card with a 0% intro APR (typically 12–21 months) will cost less than a personal loan if you can pay off the balance within the intro period.
- You need less than $1,000: Most personal loan lenders have minimum amounts of $1,000–$2,000. For smaller needs, a credit union payday alternative loan (PAL) or a 0% APR credit card may be more appropriate.
- Your credit score is below 500: Most personal loan lenders — including those that accept "bad credit" — have practical minimums around 500–560. Below this, secured loans, credit-builder loans, or co-signer arrangements are more realistic options.
- You are in active bankruptcy: Personal loan lenders will decline applicants in active Chapter 7 or Chapter 13 proceedings. Resolve your bankruptcy first.
Frequently Asked Questions
Is a personal loan good for debt consolidation?
Yes, if you can get a lower interest rate than your current debts. If you have credit card debt at 20%–25% APR and qualify for a personal loan at 10%–15%, consolidation can save thousands in interest and simplify your payments to one monthly bill.
What credit score do I need for a debt consolidation loan?
Most debt consolidation lenders require a 640–660 minimum credit score. Marcus and LightStream require 660+. Happy Money accepts 640+. Upstart accepts lower scores but rates will be higher. The better your credit, the lower your consolidation rate.
How much can I save by consolidating credit card debt?
The savings depend on your current rates and the consolidation rate you qualify for. Example: $20,000 in credit card debt at 22% APR costs $4,400/year in interest. Consolidating at 12% APR saves $2,000/year. Over a 3-year payoff, that's $6,000 in savings.
Does debt consolidation hurt your credit score?
Applying for a consolidation loan causes a hard inquiry (typically -5 to -10 points temporarily). However, paying off multiple credit cards reduces your credit utilization, which can increase your score significantly. Most borrowers see a net positive impact within 3–6 months.
📚 Books on Debt Management
Recommended books to go deeper on this topic
RECOMMENDED READ
The Total Money Makeover
Dave Ramsey's famous baby steps system for getting out of debt and building wealth — practical and actionable.
View on Amazon →RECOMMENDED READ
Get Good with Money
A comprehensive budgeting and debt management guide from one of the most trusted voices in personal finance.
View on Amazon →As an Amazon Associate, WiseIQ earns from qualifying purchases. This does not affect our editorial recommendations.