If you’re struggling to stay on top of multiple credit card payments, you’re not alone. Credit card debt has increased by $129 billion since 2023 reaching a total of $1.115 trillion, according to the Federal Reserve. With credit card debt continuing to increase, consolidation could help.
Consolidation has the potential to simplify your finances by combining all of your credit card payments into one. And, if you can consolidate your debt with a lower-interest-rate loan, you could end up saving money. By understanding the pros and cons of your options and considering your financial goals and circumstances, you can choose a consolidation strategy that best fits your needs and helps you take control of your debt.
Pros
- Lower average interest rates than credit cards
- Fixed monthly payments
- Fast funding
- Flexible repayment terms
- Can increase available credit (quick boost to credit score)
Cons
- Typically requires good credit for the best rates
- Some lenders charge additional fees, like origination fees
A personal loan is a type of installment loan you can use for almost any purpose, including debt consolidation. You can find personal loans at banks, credit unions, or through online lenders.
Most personal loans are unsecured, meaning you don’t have to put up collateral to qualify.
With an unsecured loan, you receive a lump sum upfront, then repay the amount in monthly installments. Loan amounts range from as low as $600 to $200,000, depending on the lender and your qualifications. Repayment terms often range from one to seven years.
A shorter repayment term generally means a higher monthly payment, but could save you money on interest. If you want a lower monthly payment, consider a longer term, but expect to pay more in interest. (It’s often best to have an affordable monthly payment to maintain your budget and a healthy credit score.)
While APRs on unsecured personal loans generally run higher compared to secured loans, they tend to be much lower than credit card rates. The average rate for a 24-month personal loan as of February 2024 was 12.49%, according to the Federal Reserve, which is less than the average credit card rate of 21.59%. If you can save money on interest — taking loan fees into account — a personal loan could be a good way to consolidate credit card debt.
Good to know:
The annual percentage rate (APR) is the total cost of borrowing money, and includes both the interest rate and any upfront fees.
To qualify for the best personal loan rates, you generally need good credit (a FICO score of 670 or above), consistent income, and a debt-to-income ratio — your monthly debt payments divided by your gross monthly income, expressed as a percentage — of around 36% or less.
Advertiser DisclosureOverview
Many lenders cap personal loans at $50,000, but LightStream is one of few that lets you borrow up to $100,000. This makes it an ideal lender if you’re looking to finance larger expenses, like home improvements or weddings. Additionally, LightStream doesn’t charge origination fees and APRs start at 6.99%—with the best rates reserved for borrowers with good to excellent credit.
Funds with LightStream may be available as soon as the same day, and repayment terms can last up to 20 years, depending on the type of loan you receive. However, LightStream does not offer prequalification on its site, so you won’t be able to see an estimate of your rates unless you formally apply.
pros
- Same-day funding available
- High maximum loan amount
- No origination fee
cons
- Good credit required
- No prequalification process
- Not available in Vermont
Repayment terms
2 - 20 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the same business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Best Egg ranked second in J.D. Power's Consumer Lending Satisfaction Study, so it should come as no surprise that it’s one of our best picks for a wide range of borrowers. In addition to having relatively low rates and discounts, Best Egg provides loans from $2,000 to $50,000 and may consider applicants with credit scores of at least 600. Terms range from two to five years.
This lender stands out for offering better approval odds for prequalified applicants than many other lenders, according to Credible data. Specifically, prequalified applicants were more than twice as likely to be approved for final loans. Best Egg’s origination fees can reach 9.99%.
pros
- Secured loans available
- Low minimum income requirement
- Scored second in J.D. Power's Consumer Lending Satisfaction Study
- Funds in 1-3 business days
- High close rate on loans through Credible platform
cons
- Origination fees
- No discounts
- Not available in DC, IA, VT, or WV
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Upstart often has one of the lowest minimum APRs available, making it a solid choice for borrowers with good credit or better. Applicants with poor, fair, or little to no credit may also be considered, as Upstart has no minimum credit score requirement (if you apply on the lender's website) and may accept applicants without scores. This lender offers loans between $1,000 and $50,000 with either three- or five-year repayment terms. Upstart may be ideal for you if you have good credit and can qualify for a low APR, or if you have bad credit and need a lender to look beyond your score.
In terms of its drawbacks, Upstart charges origination fees up to 12% on some personal loans. It also has a maximum APR of 35.99%, which is around the highest rate you'll find with a reputable lender, with no discounts available. Upstart also has fewer repayment term options than most lenders.
pros
- May fund in 1 business day
- No minimum credit score requirement on lender site
- Low minimum APR
- Trustpilot score of 4.9/5 stars
cons
- May charge a high origination fee
- No discounts offered
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Overview
Splash is a lending marketplace that offers loans up to $100,000 (if you apply via its website) from a wide range of lenders, with next-day funding available with many. If you apply on its website, terms range from two to seven years. Notably, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email.
It's worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere, and origination fees can reach 12% on some loans.
pros
- Excellent customer reviews on Trustpilot
- Funding as soon as the next business day
- Large loan amounts available
cons
- Possible origination fee up to 7.49% (through Credible)
- Other lenders may have lower starting APRs
- No cosigner option
Loan amount
$5,000 - $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchases
Overview
LendingClub provides personal loans up to $40,000 with repayment terms between two to five years. The company is a strong choice for borrowers with good credit who don’t need funds fast, as LendingClub does not specify funding times on its site.
You can prequalify directly with LendingClub without having to provide your Social Security number, though you will need to provide it if you formally apply. Origination fees may be charged and range from 3% to 8%. LendingClub doesn’t offer discounts for autopay or direct pay.
pros
- Mobile app
- Low minimum income requirement
- High close rate on loans made through Credible
- Available in all states
cons
- Origination fee
- No discounts
- Funding not as fast as some competitors
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Overview
Happy Money, formerly known as Payoff, is an ideal lender for debt consolidation and credit card consolidation loans. The company offers APRs starting at 11.72% and loan amounts up to $40,000. You may be able to qualify for a loan with Happy Money with fair credit, but the best rates are reserved for those with good to excellent credit scores.
The company charges origination fees up to 5%, which is lower than some competitors, and you can receive funding in three to five business days once approved. Check to see if loans are available in your area, as Happy Money doesn’t fund borrowers in Massachusetts or Nevada.
pros
- Mobile app
- Live chat
- Low maximum APR
cons
- Limited loan terms available
- No discounts
- Origination fees
- Not available in MA or NV
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
Overview
SoFi’s personal loan rates are competitive, and that’s far from the only feature that makes this lender one of our best picks for borrowers with good credit. It also offers same-day funding, multiple rate discounts, large loans, and a range of terms — plus no mandatory origination fees. You may be able to borrow between $5,000 and $100,000 and repay it in two to seven years with SoFi.
Unfortunately, SoFi doesn’t allow cosigners, so the lender won’t be a good fit for borrowers with fair or poor credit profiles who want to apply with a friend or family member. SoFi does, however, have a convenient prequalification process than can give you an idea of whether you may qualify for a loan. The lender also provides a seamless online experience and has an admirable Trustpilot consumer review rating of 4.5 out of 5 stars.
pros
- No fees required
- Large loan amounts available
- Autopay and direct pay discounts
- Same day funding
- Long loan terms available
cons
- Good credit required
- 5,000 minimum loan amount
Fees
Option to pay an origination fee in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
Overview
Avant personal loans are better suited to borrowers with bad credit (a FICO score below 580) than many others because the lender may consider applicants with credit scores in the 500s. Loan amounts up to $35,000 are available, so these loans are on the smaller side. But if this maximum is sufficient, Avant might appeal to you because it offers funding as soon as the next business day after approval and is more likely to approve the applications of prequalified borrowers than other lenders.
That said, Avant’s interest rates are steep, and the lender charges an origination fee up to 9.99%.
pros
- Borrowers with bad credit considered
- Funds as soon as the next business day
- 2-year loan terms available
cons
- No discounts offered
- Origination fee
- Not available in HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Overview
Upgrade offers loans from $1,000 to $50,000 and features competitive APRs, discounts for direct payments to creditors and enabling automatic payments, fast funding (as soon as the same day as approval), repayment terms up to seven years, and nationwide availability. Upgrade even offers secured personal loans, which is not common among lenders, and you don't need to input your Social Security number to prequalify on the website.
Upgrade does charge origination fees between 1.85% and 9.99%, however. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
pros
- Fair credit borrowers eligible
- Autopay and direct pay discounts
- Can fund in as little as 1 business day
- Mobile app
- Secured loans available
cons
- High maximum origination fee
- Cosigners not accepted on home improvement loans
- Low J.D. Power ranking
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Overview
BHG Financial stands out for offering the largest loan amounts - up to $200,000 - of any of our partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to find one. However, loan amounts start at $20,000, so look elsewhere for small loans. You'll have between three and 10 years to repay the loan, but you'll need an annual income of at least $100,000 and a FICO score of 660 or better to qualify.
Loan funds are available within three to 14 days of loan approval. BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Note that you can't prequalify for a personal loan with BHG.
pros
- Eligible applicants can borrow up to $200,000
- Considers borrowers with fair credit
- Long repayment terms
cons
- Not available in IL, ND, and MT
- No discounts
- Minimum annual income requirement of $100,000
- Funding takes at least five days
Fees
Origination fees, late fees, other fees may apply
Eligibility
Available in all states except Illinois, North Dakota, and Montana
Loan uses
Debt consolidation, credit card refinancing
Overview
Universal Credit personal loans are ideal for bad-credit borrowers because the lender may consider applicants with credit scores as low as 560. You can apply for loan amounts between $1,000 and $50,000 and may qualify for next-day funding. Because Universal Credit has higher APRs than other lenders, it may be best suited to individuals without the credit and/or income needed to qualify for more competitive rates with other lenders.
You can choose from repayments terms of three, five or seven years. Universal Credit has higher origination fees than many lenders, charging between 5.25% and 9.99% on all personal loans. This lender offers interest rate discounts when you opt for automatic payments or direct payment to creditors (in the case of debt consolidation).
pros
- Borrowers with bad credit considered
- $25,000 annual income requirement
- Autopay and direct pay discounts available
- Can fund in one business day
cons
- High APRs
- Potentially high origination fees
- Not available in Iowa
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Overview
When it comes to personal loans for fair-credit borrowers, Reach Financial is one of the best choices around. This lender offers fast processing, with a majority of approved applications receiving funds within a day. Terms start at two years and end at five years for personal loans, and loan amounts are between $3,500 and $40,000. This isn’t the right lender for the shortest or longest terms available, and the borrowing range is narrower than you’d find with many lenders.
Reach focuses on borrowers using personal loans to pay off debt and only permits two purposes for its loans: debt consolidation and credit card refinancing. It’s also worth noting that the lender does not work with borrowers in every state and charges origination fees up to 8%.
pros
- Fast funding
- Can improve credit
- Fair-credit borrowers may be eligible
cons
- Limited use
- No direct pay discount
- Origination fee
- Limited availability: Not available in CO, CT, ME, NV, NH, TN, VT, WV, or WY
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Overview
For bad-credit personal loans, OneMain Financial is one of the best lenders you can consider. In addition to not setting a minimum credit score for applicants who apply directly through the website, OneMain permits cosigners on applications and offers secured personal loans. Cosigners can help you improve your chances of approval and possibly secure lower APRs. Secured loans require you to pledge collateral when applying and tend to be easier to qualify for than unsecured loans, which typically require higher credit scores and no collateral.
Repayment terms range from two to five years. Personal loan amounts between $1,500 and $20,000 are available, with different minimums and maximums in select states. Also depending on where you live, you’ll pay a flat fee of $25 to $500 or 1% to 10% for origination. You may be eligible for a personal loan with OneMain if you have bad credit (a FICO score of 580 or lower), but the lender’s rates are very high compared to many others.
pros
- Flexible eligibility requirements
- Offers secured options
- Competitive bad-credit loans
- Physical presence
cons
- Availability
- Origination fees
- High starting APR
- Low maximum loan amount
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Overview
Many lenders cap personal loans at $50,000, but LightStream is one of few that lets you borrow up to $100,000. This makes it an ideal lender if you’re looking to finance larger expenses, like home improvements or weddings. Additionally, LightStream doesn’t charge origination fees and APRs start at 6.99%—with the best rates reserved for borrowers with good to excellent credit.
Funds with LightStream may be available as soon as the same day, and repayment terms can last up to 20 years, depending on the type of loan you receive. However, LightStream does not offer prequalification on its site, so you won’t be able to see an estimate of your rates unless you formally apply.
pros
- Same-day funding available
- High maximum loan amount
- No origination fee
cons
- Good credit required
- No prequalification process
- Not available in Vermont
Repayment terms
2 - 20 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the same business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Best Egg ranked second in J.D. Power's Consumer Lending Satisfaction Study, so it should come as no surprise that it’s one of our best picks for a wide range of borrowers. In addition to having relatively low rates and discounts, Best Egg provides loans from $2,000 to $50,000 and may consider applicants with credit scores of at least 600. Terms range from two to five years.
This lender stands out for offering better approval odds for prequalified applicants than many other lenders, according to Credible data. Specifically, prequalified applicants were more than twice as likely to be approved for final loans. Best Egg’s origination fees can reach 9.99%.
pros
- Secured loans available
- Low minimum income requirement
- Scored second in J.D. Power's Consumer Lending Satisfaction Study
- Funds in 1-3 business days
- High close rate on loans through Credible platform
cons
- Origination fees
- No discounts
- Not available in DC, IA, VT, or WV
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Upstart often has one of the lowest minimum APRs available, making it a solid choice for borrowers with good credit or better. Applicants with poor, fair, or little to no credit may also be considered, as Upstart has no minimum credit score requirement (if you apply on the lender's website) and may accept applicants without scores. This lender offers loans between $1,000 and $50,000 with either three- or five-year repayment terms. Upstart may be ideal for you if you have good credit and can qualify for a low APR, or if you have bad credit and need a lender to look beyond your score.
In terms of its drawbacks, Upstart charges origination fees up to 12% on some personal loans. It also has a maximum APR of 35.99%, which is around the highest rate you'll find with a reputable lender, with no discounts available. Upstart also has fewer repayment term options than most lenders.
pros
- May fund in 1 business day
- No minimum credit score requirement on lender site
- Low minimum APR
- Trustpilot score of 4.9/5 stars
cons
- May charge a high origination fee
- No discounts offered
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Overview
Splash is a lending marketplace that offers loans up to $100,000 (if you apply via its website) from a wide range of lenders, with next-day funding available with many. If you apply on its website, terms range from two to seven years. Notably, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email.
It's worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere, and origination fees can reach 12% on some loans.
pros
- Excellent customer reviews on Trustpilot
- Funding as soon as the next business day
- Large loan amounts available
cons
- Possible origination fee up to 7.49% (through Credible)
- Other lenders may have lower starting APRs
- No cosigner option
Loan amount
$5,000 - $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchases
Overview
LendingClub provides personal loans up to $40,000 with repayment terms between two to five years. The company is a strong choice for borrowers with good credit who don’t need funds fast, as LendingClub does not specify funding times on its site.
You can prequalify directly with LendingClub without having to provide your Social Security number, though you will need to provide it if you formally apply. Origination fees may be charged and range from 3% to 8%. LendingClub doesn’t offer discounts for autopay or direct pay.
pros
- Mobile app
- Low minimum income requirement
- High close rate on loans made through Credible
- Available in all states
cons
- Origination fee
- No discounts
- Funding not as fast as some competitors
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Overview
Happy Money, formerly known as Payoff, is an ideal lender for debt consolidation and credit card consolidation loans. The company offers APRs starting at 11.72% and loan amounts up to $40,000. You may be able to qualify for a loan with Happy Money with fair credit, but the best rates are reserved for those with good to excellent credit scores.
The company charges origination fees up to 5%, which is lower than some competitors, and you can receive funding in three to five business days once approved. Check to see if loans are available in your area, as Happy Money doesn’t fund borrowers in Massachusetts or Nevada.
pros
- Mobile app
- Live chat
- Low maximum APR
cons
- Limited loan terms available
- No discounts
- Origination fees
- Not available in MA or NV
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
Overview
SoFi’s personal loan rates are competitive, and that’s far from the only feature that makes this lender one of our best picks for borrowers with good credit. It also offers same-day funding, multiple rate discounts, large loans, and a range of terms — plus no mandatory origination fees. You may be able to borrow between $5,000 and $100,000 and repay it in two to seven years with SoFi.
Unfortunately, SoFi doesn’t allow cosigners, so the lender won’t be a good fit for borrowers with fair or poor credit profiles who want to apply with a friend or family member. SoFi does, however, have a convenient prequalification process than can give you an idea of whether you may qualify for a loan. The lender also provides a seamless online experience and has an admirable Trustpilot consumer review rating of 4.5 out of 5 stars.
pros
- No fees required
- Large loan amounts available
- Autopay and direct pay discounts
- Same day funding
- Long loan terms available
cons
- Good credit required
- 5,000 minimum loan amount
Fees
Option to pay an origination fee in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
Overview
Avant personal loans are better suited to borrowers with bad credit (a FICO score below 580) than many others because the lender may consider applicants with credit scores in the 500s. Loan amounts up to $35,000 are available, so these loans are on the smaller side. But if this maximum is sufficient, Avant might appeal to you because it offers funding as soon as the next business day after approval and is more likely to approve the applications of prequalified borrowers than other lenders.
That said, Avant’s interest rates are steep, and the lender charges an origination fee up to 9.99%.
pros
- Borrowers with bad credit considered
- Funds as soon as the next business day
- 2-year loan terms available
cons
- No discounts offered
- Origination fee
- Not available in HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Overview
Upgrade offers loans from $1,000 to $50,000 and features competitive APRs, discounts for direct payments to creditors and enabling automatic payments, fast funding (as soon as the same day as approval), repayment terms up to seven years, and nationwide availability. Upgrade even offers secured personal loans, which is not common among lenders, and you don't need to input your Social Security number to prequalify on the website.
Upgrade does charge origination fees between 1.85% and 9.99%, however. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
pros
- Fair credit borrowers eligible
- Autopay and direct pay discounts
- Can fund in as little as 1 business day
- Mobile app
- Secured loans available
cons
- High maximum origination fee
- Cosigners not accepted on home improvement loans
- Low J.D. Power ranking
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Overview
BHG Financial stands out for offering the largest loan amounts - up to $200,000 - of any of our partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to find one. However, loan amounts start at $20,000, so look elsewhere for small loans. You'll have between three and 10 years to repay the loan, but you'll need an annual income of at least $100,000 and a FICO score of 660 or better to qualify.
Loan funds are available within three to 14 days of loan approval. BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Note that you can't prequalify for a personal loan with BHG.
pros
- Eligible applicants can borrow up to $200,000
- Considers borrowers with fair credit
- Long repayment terms
cons
- Not available in IL, ND, and MT
- No discounts
- Minimum annual income requirement of $100,000
- Funding takes at least five days
Fees
Origination fees, late fees, other fees may apply
Eligibility
Available in all states except Illinois, North Dakota, and Montana
Loan uses
Debt consolidation, credit card refinancing
Overview
Universal Credit personal loans are ideal for bad-credit borrowers because the lender may consider applicants with credit scores as low as 560. You can apply for loan amounts between $1,000 and $50,000 and may qualify for next-day funding. Because Universal Credit has higher APRs than other lenders, it may be best suited to individuals without the credit and/or income needed to qualify for more competitive rates with other lenders.
You can choose from repayments terms of three, five or seven years. Universal Credit has higher origination fees than many lenders, charging between 5.25% and 9.99% on all personal loans. This lender offers interest rate discounts when you opt for automatic payments or direct payment to creditors (in the case of debt consolidation).
pros
- Borrowers with bad credit considered
- $25,000 annual income requirement
- Autopay and direct pay discounts available
- Can fund in one business day
cons
- High APRs
- Potentially high origination fees
- Not available in Iowa
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Overview
When it comes to personal loans for fair-credit borrowers, Reach Financial is one of the best choices around. This lender offers fast processing, with a majority of approved applications receiving funds within a day. Terms start at two years and end at five years for personal loans, and loan amounts are between $3,500 and $40,000. This isn’t the right lender for the shortest or longest terms available, and the borrowing range is narrower than you’d find with many lenders.
Reach focuses on borrowers using personal loans to pay off debt and only permits two purposes for its loans: debt consolidation and credit card refinancing. It’s also worth noting that the lender does not work with borrowers in every state and charges origination fees up to 8%.
pros
- Fast funding
- Can improve credit
- Fair-credit borrowers may be eligible
cons
- Limited use
- No direct pay discount
- Origination fee
- Limited availability: Not available in CO, CT, ME, NV, NH, TN, VT, WV, or WY
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Overview
For bad-credit personal loans, OneMain Financial is one of the best lenders you can consider. In addition to not setting a minimum credit score for applicants who apply directly through the website, OneMain permits cosigners on applications and offers secured personal loans. Cosigners can help you improve your chances of approval and possibly secure lower APRs. Secured loans require you to pledge collateral when applying and tend to be easier to qualify for than unsecured loans, which typically require higher credit scores and no collateral.
Repayment terms range from two to five years. Personal loan amounts between $1,500 and $20,000 are available, with different minimums and maximums in select states. Also depending on where you live, you’ll pay a flat fee of $25 to $500 or 1% to 10% for origination. You may be eligible for a personal loan with OneMain if you have bad credit (a FICO score of 580 or lower), but the lender’s rates are very high compared to many others.
pros
- Flexible eligibility requirements
- Offers secured options
- Competitive bad-credit loans
- Physical presence
cons
- Availability
- Origination fees
- High starting APR
- Low maximum loan amount
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Fox Business does not make or arrange loans.
Secured personal loans require collateral, such as your house or car, to secure the loan. The boost of collateral can help you get a loan with bad credit or potentially lower your rate, since including collateral provides security for the lender. If you fail to make payments, you risk losing your collateral to repossession or foreclosure.
Pros
- Potential savings on interest
- Can consolidate multiple debts
- Potential to improve credit score
- Offers may be available to existing cardholders
Cons
- Limited introductory period
- Balance transfer fees
A balance transfer credit card lets you consolidate all your credit card balances onto a single credit card, typically with a low or 0% introductory rate. When the introductory rate expires — after around 12 to 21 months, depending on the card — the card assumes the standard APR which could be 29.99% or more based on your credit profile and how you qualify.
Balance transfer credit cards generally charge a fee for the initial balance transfer. Usually, it’s a percentage of the total transfer amount, often around 3% to 5%.
Using a balance transfer credit card can be a smart strategy if you’re able to pay off the balance within the introductory period and your interest savings outweigh the balance transfer fee. Check your current cards for balance transfer offers, or see if you can prequalify for a new 0% APR balance transfer credit card.
Tip: Check your current cards for a 0% balance transfer offer. This is one way to avoid a credit inquiry, and can be a good option if your credit isn’t good enough to qualify for a new card.
Pros
- Large loan amounts may be available
- Repayment terms up to 30 years
- Can increase available credit (quick boost to credit score)
Cons
- Your home is collateral
- Variable interest rates on most HELOCs
- Can take 30 days or more to close
Home equity loans and home equity lines of credit (HELOCs) are both secured loans that allow you to borrow against your home’s equity. Generally speaking, you must have at least 20% available equity in your home to qualify for a home equity loan or a HELOC. Because home equity loans and HELOCs are secured by your home, they can be a lower-cost way to consolidate credit card debt.
But they come with drawbacks. Both have closing costs that can range from 2% to 5% of your loan amount, much like a mortgage, and both put your home at risk if you default on the loan. And since the value of your home needs to be appraised, they can take weeks to close.
A home equity loan is a type of installment loan. After receiving your loan amount upfront, you make monthly payments based on your loan amount, APR, and repayment term until you pay off the loan. APRs for home equity loans may be based on several factors, including your existing mortgage balance, the value of your home, the term of the loan, the loan amount, your credit history and your income.
If you choose to take out a home equity loan, your APR will stay at a fixed rate throughout your repayment period. Repayment period may last up to 30 years.
A HELOC, on the other hand, works like a credit card. During your draw period, you can borrow up to your credit limit on a revolving basis.
APRs on home equity lines of credit depend on the U.S. prime rate, which is currently 8.50%. Lenders may also add a margin on top of the index rate to determine the interest you’ll pay. For example, if your lender adds a 1% margin above the prime rate, your HELOC has a "prime plus 1%" interest rate. If you decide to take on a HELOC, your interest rates may fluctuate based on market conditions.
Additionally, for HELOCs, when the repayment period starts, you can no longer draw on your line of credit, and you have to pay off your balance. A draw period may last 10 years, depending on the lender, with a 20-year repayment period.
Pros
- Can help reduce debt if you have bad credit
- Handles payments for you
- Potential waived fees
Cons
- Limited eligibility
- Temporary suspension of credit
- Extra fees for the program
A debt management plan can help you organize your credit card payments and get on track to pay off your balances. To enroll in a debt management plan, you typically have to work with a credit counselor at a nonprofit credit counseling agency.
A credit counselor can reduce your monthly payments by negotiating lower interest rates or a longer repayment period. They organize your plan so you make a single monthly payment to the credit counseling agency, and the agency pays your creditors. You may have to pay a small fee for this service, and the plan might require you to close your cards.
A debt management plan is best for those who can’t qualify for a low-interest credit card consolidation loan on their own.
The U.S. Department of Justice has an approved list of nonprofit credit counseling agencies, and you can also find a credit counselor from the National Foundation for Credit Counseling or the Financial Counseling Association of America.
Warning:
Beware of deals that sound too good to be true or agencies that require any kind of deposit or payment upfront, that is typically a sign of a scam.
Pros
- Lower interest rates than credit cards
- Fixed rate
Cons
- Potential negative equity
- Risk of loss of vehicle
- Need sufficient equity
A cash-out auto refinance involves replacing your current auto loan with a new one for an amount that’s greater than what you currently owe. You receive the difference in cash, which you can use to pay off your credit card debt.
For example, if you have $20,000 of equity in your vehicle, but still owe $10,000, you could refinance with a new loan of $30,000 and a cash value of $20,000.
Like a personal loan, a cash-out auto refinance could save you money if you can get a low enough interest rate. But don’t forget about loan fees when weighing your options.
Unlike a personal loan, a cash-out auto refinance is secured by an asset. If you can’t keep up with your payments, you risk losing your car. Additionally, a cash-out auto refinance makes it more likely you could go upside down on your auto loan — meaning you owe more than your car is worth.
Not all lenders allow cash-out auto refinances, so you’ll have to do some digging to find those that do.
Keep in mind:
Auto loan rates are currently the highest they’ve been since 2006, according to the Federal Reserve’s February 2024 data, so it may be best to consider other options if they are available to you.
Pros
- No credit check required
- Immediate access to funds
- No impact to credit score
Cons
- Potential tax consequences
- Limited funding amount
- Missed investment growth
A 401(k) loan lets you borrow money from your 401(k) retirement plan, which you can use to consolidate your credit card debt. Other types of employer-sponsored retirement accounts, like 403(b), 457(b), and profit-sharing plans, may also offer loans, but the availability of these loans depends on your individual plan.
The most you can borrow with a retirement loan is $50,000, but it also depends on your vested account balance. Unless you leave your job, you generally have five years to pay off the loan.
Borrowing from your retirement account to consolidate credit card debt has its benefits. For example, you don’t need to meet any credit score requirements to access loan funds. Plus, any interest you pay goes back into your account.
But there are significant risks, too. If you don’t repay the loan, you may face taxes and withdrawal penalties. You may even have to repay the loan in full if you end up leaving your job. Not to mention, borrowing from your retirement account means you’re missing out on potential market growth.
When considering ways to consolidate your debt, consider things like rates, repayment terms, loan amounts, funding times, and fees. These factors vary by method and should impact how you choose to consolidate debt.
| |
---|
| Those with good credit who don’t want to consolidate debt with a secured loan. |
Balance transfer credit card | Those who can qualify and pay off their balance during the 0% APR introductory period. |
Home equity loan or HELOC | Those who have significant equity in their home and are comfortable borrowing against it. |
| Those who can’t qualify for a low-interest loan or balance transfer credit card and are having trouble keeping up with credit card payments. |
| Those who can qualify for a better interest rate and are comfortable taking out a secured loan. |
| Those who can’t qualify for other loans or who know they can pay off their loan within a short time frame. |
While credit card consolidation can be an effective strategy for managing and reducing debt, it's essential to consider alternative options that may better suit your financial situation and goals.
- Budgeting: One of the most straightforward approaches to debt management is to create a comprehensive budget and identify areas where you can reduce expenses. By cutting back on discretionary spending and reallocating funds towards debt repayment, you can make progress towards becoming debt-free without the need for consolidation.
- Debt snowball or avalanche repayment: The debt snowball and debt avalanche methods involve prioritizing debt repayment based on either the smallest balance or the highest interest rate, respectively. By focusing on one debt at a time while making minimum payments on others, you can systematically pay off debt and build momentum towards financial freedom.
- Negotiating: In some cases, creditors may be willing to negotiate lower interest rates, waive fees, or offer hardship programs to help you manage your debt. Contact your creditors directly to discuss your situation and explore potential options for relief.
- Credit counseling: Credit counseling agencies offer financial education and counseling services to help individuals manage their debts and improve their financial literacy. A credit counselor can provide personalized advice and assistance with budgeting, debt repayment strategies, and negotiating with creditors. You can reach out to 211.org for more information.
- Bankruptcy: In severe cases of financial distress, bankruptcy may be a last resort option. Filing for bankruptcy can help eliminate or restructure debts, providing a fresh start for you. However, bankruptcy has serious long-term consequences and should only be considered after exploring all other alternatives and consulting with a qualified bankruptcy attorney.
It depends on your situation. Start by checking your credit score and assessing your finances, which may limit your options. From there, weigh the risks and benefits of each method.
For example, if you have great credit and can qualify for a low-interest home equity loan, that could be a good choice. But if you’re uncomfortable with a secured loan, and don’t want to risk losing your collateral, a personal loan could be a better option.
Depending on the route you take, credit card consolidation can hurt your credit, but the initial impact is generally temporary. When you apply for a loan, the lender will perform a hard credit check, which lowers your credit score slightly for about a year. Falling behind on payments, whether on credit cards or a consolidation loan, can have a much more severe impact on your score.
Generally, you won’t lose your credit cards if you consolidate debt. In fact, keeping old credit card accounts open can have a positive impact on your credit score — as long as you aren’t tempted to rack up more debt. However, if you use a debt management plan, a credit counselor may require you to close your credit card accounts.
You can consolidate your credit card debt if you have bad credit, but you may not have as many options. For instance, a lower credit score can make it harder to qualify for a low-interest personal loan or balance transfer credit card. Applying for a secured loan, like a home equity loan, may be easier with bad credit, but you risk losing your collateral if you can’t make the payments. If you’re struggling to qualify for any type of debt consolidation loan, a debt management plan may be your best bet.
Meet the contributor:
Emily Batdorf
Emily Batdorf is a personal finance expert, specializing in banking, lending, credit cards, and budgeting. Her work has been featured by USA TODAY Blueprint, New York Post, MSN, and Forbes Advisor.