What is the Lowest Interest Debt Consolidation Loan Available?

Consider applying for the lowest interest debt consolidation loan plans if you have multiple personal loan accounts from different creditors. Reports indicate that most American households have $90,000 worth of debt. And paying off this loan amount becomes more challenging if you have to direct the debt payments toward various creditors.

Now, some of your personal loans may have terrible repayment terms. So when finding loans for debt consolidation, always compare the term length, interest rates, origination fees, and application process with your current plans. Check out the special features as well. For example, you wouldn't use personal loans to consolidate credit card debt, right?

Best Debt Consolidation Loans Available

Best for Low Fees: Marcus by Goldman Sachs

Marcus by Goldman Sachs offers one of the best repayment loan terms on the market, even among other consolidation loans. Clients get to enjoy their versatile terms with a competitive interest rate scheme and zero late payment fees. Their personal loans can consolidate various kinds of accounts.

Apart from the possibility that the loan funds could take up to five days to reflect in your bank account, there's no downside to getting your debt consolidation loan from Marcus by Goldman Sachs. You should definitely send a loan application.

  • Transparent and upfront with fees
  • Direct payment to creditors
  • Versatile repayment terms

Best for Those With Good Credit: Prosper

Those who want to maximize their good credit score to get the best debt consolidation plans available can turn straight to Prosper.

The peer-to-peer lending company Prosper offers a competitive interest rate on their consolidation loans, but their services are limited to those with good to excellent credit reports. They have strict qualifications to protect the investors on their platform.

Although, note that their personal loans do not have much variety. Generally, clients can only pick between two different repayment terms.

  • Adjustable payment dates
  • Versatile loan amounts of up to $40,000

Best for Those With Bad Credit: Upgrade

What sets Upgrade apart from other personal loan lenders is its unique, flexible underwriting system. They don't focus too much on credit reports. Even a client with a bad to fair credit score can qualify for their personal loans as long as they have sufficient cash flow for monthly billings.

What's more, Upgrade has competitive interest rates. Clients would be hard-pressed to find any other lender willing to provide poor credit consolidation loans with similar repayment terms.

Bear in mind, however, that Upgrade has strict guidelines on delayed monthly payments. Do not miss your dues. Otherwise, your total loan amount would automatically accrue late interest payments

  • Co-joint loan amount options
  • Offers secured loans
  • Flexible personal loan features

Best for Credit Card Debt: Payoff

Reports indicate that the average American carries four active credit cards at a time. Having multiple credit cards can boost your increased debt-to-income ratio, but if you keep missing monthly billings, don't expect your accounts to affect your credit score positively.

If you're looking to consolidate credit card debt, turn straight to PayOff. They offer the best single-account loan terms for cardholders that have multiple high-interest credit card accounts.

Note that PayOff reviews credit reports dating back to several years ago. You'll only qualify for the low interest if you have a good to excellent credit score.

  • No late payment fees
  • Lower interest rates than most credit card companies
  • Direct payment options

Best for Flexible Payment Schemes: Discover® Personal Loans

Discover® has the one of the most versatile loans for debt consolidation. Clients have the freedom to adjust the term length and monthly payments based on the interest rate bracket they qualify for. Plus, they offer next-day loan fund transfers.

The only downside is they only work with applicants with a minimum credit score of 720.

  • No origination fees
  • Direct payment to creditors
  • User-friendly personal management app

Best for Large Debt Repayment: SoFi

If you need personal loans for consolidation of a large loan amount, reach out to SoFi. They are a reputable lender that provides loans for up to $100,000. Clients also get to enjoy zero fees and free financial counseling.

Since SoFi consolidates large loan amounts, they limit their services to good credit clients with a credit score of at least 680. Plus, they don't offer unsecured loans. If you want to qualify for their low-interest, high-volume personal loans for debt, you'll have no choice but to impress them with your credit profile report.

  • Unemployment protection
  • Joint-loan options
  • User-friendly management app

Interested in learning more about the best debt consolidation loans available? Any Credit has multiple guides on properly consolidating credit card balances and unsecured loan accounts, all while considering factors like interest rate and potential risk. Check our article detailing the pros and cons of debt consolidation.

Frequently Asked Questions

Do consolidation loans hurt your credit score?

Debt consolidation can be an effective way to manage your debt and raise credit scores over the long term. However, this may not help improve scores immediately as there is a chance that you'll see a temporary dip in score due to merging multiple accounts into one new loan account.

As long as payments are made on time with no additional borrowing, then it's possible that these changes will have little effect on future plans such as getting approved for loans or applying for cards.

What is a good interest rate for a consolidation loan?

Interest rates for debt consolidation loans can range from 5.99% to 35.99%. To get a rate at the low end of that range, you'll need an excellent credit score (720-850 FICO).

What is the smartest way to consolidate debt?

The smartest strategy to pay off your credit cards is through consolidation. When you consolidate your existing debts into a single loan with lower interest rates, it can save money each month and help you take out the pressure of paying back what's owed quickly.

How long does debt consolidation stay on your credit report?

The longest a settled debt can stay on a credit report is seven years. If the settled debt has no history of late payments—called delinquencies—the account will remain on the credit profile report for seven years from the date it was reported as settled.

What credit score do you need for a debt consolidation loan?

To qualify for the debt consolidation loan, you will need to meet or exceed your lender's minimum requirement. This is often around the mid-600 range, but some bad credit lenders may accept scores as low as 580s.

Debt consolidation loans best suit good credit debtors who want to combine their existing personal debts under one account with better interest and a flexible term length.

Unfortunately, however, those who have poor credit scores and do not have a stable income to cover monthly payments might not qualify for a debt consolidation loan. For these cases, we advise alternative debt reduction strategies such as debt settlement.

Overall, strive to find a unique, customized repayment plan that will help you pay off your total loan amount quickly and efficiently. There's no need to limit yourself to one or two debt payment strategies.

Still on the fence about what type of debt reduction strategy to follow? Any Credit has multiple guides on creating a unique, customized plan to clear your existing dues. You can check out our free resources on debts for more information on debt consolidation.

Here at AnyCredit, we aim to make the most complex financial issues and topics easy to understand. In our articles, we will be making analysis, smart finance judgments, and honest conversations to help you make sense of your financial capacities and options.
Copyright © 2024 AnyCredit. All Rights Reserved.