4 Best Debt Consolidation Companies in 2021

In-depth Reviews

In order to understand why these four lenders are seen as the best debt consolidation companies in 2020, it’s important to start from the very beginning. This means understanding the concept of debt consolidation, the reasons behind applying for it, and the loan terms that top lenders have to offer.

The first and the second questions have a simple answer – consolidating debt is the simplest way to lower your interest rate and keep all your debt in one place. As for the latter, here are several things worth keeping in mind.

Show more

Top 4 Debt Consolidation Companies in 2021

1. LightStream

Two reasons that put LightStream amongst the best debt consolidation companies are low APR and high lendable amounts. This loan is great for those with good to excellent credit, seeing as how it provides them with the greatest terms possible. Full Review

  • APR: 5.95–19.99%
  • Loan Amount: $5,000–$100,000
  • Loan Term: 2–7 years

Two reasons that put LightStream amongst the best debt consolidation companies are low APR and high lendable amounts. This loan is great for those with good to excellent credit, seeing as how it provides them with the greatest terms possible. Full Review

2. Prosper

A lot of people hold Prosper to be the best debt consolidation company on the market or at the very top of this list. It is primarily a great choice for those with high income and a decent credit score. It also comes with the option of a joint loan, which is another huge plus. Full Review

  • APR: 7.95–35.99%
  • Loan Amount: $2,000–$40,000
  • Loan Term: 3–5 years

A lot of people hold Prosper to be the best debt consolidation company on the market or at the very top of this list. It is primarily a great choice for those with high income and a decent credit score. It also comes with the option of a joint loan, which is another huge plus. Full Review

3. Avant

Avant is often listed amongst the best debt consolidation companies for bad credit. Still, this doesn’t mean that Avant is only good for bad loans. For those who boast a better income-to-debt ratio and have a bit higher credit score, the debt consolidation rates can be quite decent. Full Review

  • APR: 9.95–35.99%
  • Loan Amount: $2,000–$35,000
  • Loan Term: 2–5 years

Avant is often listed amongst the best debt consolidation companies for bad credit. Still, this doesn’t mean that Avant is only good for bad loans. For those who boast a better income-to-debt ratio and have a bit higher credit score, the debt consolidation rates can be quite decent. Full Review

4. Upstart

Upstart is seen by many as the best place to get a debt consolidation loan for fair-credit borrowers, as well as those with decent earning potential. Its low minimum credit score requirement, low minimum loan amount, and a potentially low origination fee are its strong selling points. Full Review

  • APR: 8.41%–35.99%
  • Loan Amount: $1,000–$50,000
  • Loan Term: 3–5 years

Upstart is seen by many as the best place to get a debt consolidation loan for fair-credit borrowers, as well as those with decent earning potential. Its low minimum credit score requirement, low minimum loan amount, and a potentially low origination fee are its strong selling points. Full Review

The Best Debt Consolidation Loans of 2021

LightStream Best for good to excellent credit score
Prosper Best for borrowers with high income
Avant Best for fair credit borrowers
Upstart Best for limited credit history

Detailed Reviews

LightStream
LightStream

BEST FOR

good to excellent credit score

Visit Website
  • APR: 5.95–19.99%
  • Loan Amount: $5,000–$100,000
  • Minimum Credit Score: 660
  • Loan Term: 2–7 years
  • Origination Fee: No origination fee
  • Type of Loan: Unsecured
  • Credit Check: Hard credit inquiry

LightStream is definitely one of the companies offering best debt consolidation loan rates for a number of reasons. This lender does a thorough check, which means that every good financial decision that you’ve made in recent history is going to pay off. Sure, the opposite is true as well, yet, LightStream reviews generally attract those with the best of credit scores. The lending platform also takes into account the purpose of the loan, which means you get different terms for LightStream debt consolidation than if you opt for another type of loan.

Refinancing your loans is quite easy, and the procedure is simple, which is why a lot of people use the platform for all kinds of loans. Also, LightStream is highly competitive and takes special pride in its low APR. If you can show them another lender’s offer with better APR, LightStream will show you why they’re the best loan consolidation company and go 0.1% below that in order to keep a potential borrower.

Loan Requirements

The credit score requirement goes as low as 660. However, ideally, a lender would have a better rating. An excellent credit score is preferable for prospective borrowers who want to get the very best that LightStream has to offer.

Due to the fact that they are one of the top debt consolidation companies, the application process is fairly streamlined, you basically need to fill out the required information, and you’re good to go.

In order to prove that they can pay back, you need more than just a good enough credit score and an almost spotless credit history. LightStream requires that you have income and assets that can support your existing debt obligations, as well as the obligations of the debt you’re applying for. Before receiving the loan, applicants need to have a valid MasterCard or Visa credit card in order to verify their identity.

Loan Agreement Terms

APR: The APR of 5.95%–19.99% alone should be enough to place LightStream firmly among the best companies for debt consolidation. Because this is a debt consolidation loan, it can significantly reduce the total amount that needs to be paid back. Also, the APR is negotiable for those who can find a better offer.

Loan Amount: The lendable amount goes anywhere between $5,000 and $100,000. This type of flexibility is well-suited for debt consolidation. On the one hand, a debt sum below $5,000 is not exactly something that the majority of people get a loan to pay off debt for. Then again, the $100,000 range gives you a chance to really make a difference.

Loan Term: Loan term is between two and seven years. Due to their very nature and the average amount of debt that people are trying to consolidate, an average credit consolidation loan tends to have a tad longer term.

Origination Fee: One of the best things about LightStream’s consolidation loans is the fact that they don’t require an origination fee. The thorough check on the person in question is more than enough guarantee for the lender.

Funding Time: It may take up to 30 days for the LightStream applicant to receive the funds. Fortunately, a personal loan for debt consolidation is never that urgent. Keep in mind that checking all the requirements may take quite a bit of time.

Credit Check: Like with the majority of best loan consolidation companies, LightStream uses a hard credit inquiry in order to approve a loan.

Repayment: Fortunately, LightStream doesn’t charge an early repayment fee. Still, a convenient repayment method and low APR will ensure that early repayment is not that high on the priority list.

What We Liked and Didn’t Like about LightStream

The first thing we’ve liked about LightStream is the fact that it requires no fees. As one of the truly good debt consolidation companies, it charges no origination fee, no early repayment fees, and it generally gives you a relatively decent term all around. While these fees may not seem that serious of an issue, they can add up quickly. This is especially true for someone in need of consolidation (someone with numerous monthly payables already ticking). So, all one has to focus on are the loan consolidation rates.

Most importantly, the debt consolidation loan rates are unprecedentedly low. Furthermore, the lender itself is willing to “haggle” (in a way) in order to remain competitive. By bringing proof that an alternative lender is offering a more favorable APR, LightStream may decide to go 0.1% lower than them.

On the other hand, due to its incredibly high list of requirements to qualify, LightStream requires an almost spotless credit history over the last several years. This is what cements its place on every list of best debt consolidation loans in 2020.

Everyone looking for a personal loan to consolidate debt should look for the autopay option. Why? Well, they are most likely consolidating debt in order to make repayment simpler. This just helps take this convenience to the next step. With LightStream, it gets even better than that because of the rate discount for AutoPay.

The minimum loan amount is relatively high, but that’s probably not an issue for LightStream’s average borrower demographic. Moreover, the listed APRs are only valid with AutoPay, which, while helpful, might not be everyone’s cup of tea.

There’s also no pre-qualification option. This soft pull option is something that most users are looking forward to in order to be able to plan their finances. There is, on the other hand, a handy debt consolidation loan calculator that one can use in order to get the answers they need.

Prosper
Prosper

BEST FOR

borrowers with high income

Visit Website
  • APR: 7.95–35.99%
  • Loan Amount: $2,000–$40,000
  • Minimum Credit Score: 640
  • Loan Term: 3–5 years
  • Origination Fee: 2.41%–5%
  • Type of Loan: Unsecured
  • Credit Check: Soft inquiry

Prosper is a perfect example of how a peer-to-peer lending platform may be a valid debt consolidation option. It is definitely one of the best debt consolidation companies in 2020. The platform itself has approved loans to about 980,000 people. The total value of these loans is about $16 billion. Given that the company has existed since 2005, these numbers give it a fair amount of legitimacy needed to gain borrowers’ trust.

Other than just credit score, this platform also focuses on debt-per-income ratio and one’s credit history. This means that the application might take a while to process, but once the application is approved, one can expect the money in their account in a matter of days. Generally speaking, it takes about two weeks for the entire process to be done. As far as the consolidation loans go, this is a relatively short amount of time. This is also why Prosper is often described as one of the best debt consolidation loan companies for those who need the money quickly.

Loan Requirements

The credit score required by Prosper is 640. However, the problem is that the APR depends on one’s credit score, and just because someone is eligible doesn’t mean that they’ll get favorable terms. It’s one more thing to worry about when considering getting another personal loan to pay off debt.

This lending platform insists on a debt-to-income ratio below 50%, which is more generous than the 40% requested by some other lenders. They don’t insist on a specific income number, and all that the platform needs are for the income to go above $0. The borrower should also have no bankruptcies in the past year and have fewer than five credit inquiries (hard pull) in the last six months. There is also a minimum of three open credit lines per credit report.

Loan Agreement Terms

APR: The APR is between 7.95% and 35.99%. Right off the bat, it’s clear that this loan is great for those with amazing credit but that it doesn’t offer the best debt consolidation loans for bad credit. The APR range is quite broad, which is why one’s personal terms make all the difference.

Loan Amount: The loan amount is between $2,000 and $40,000, which is fairly narrow when it comes to some of its competitors. The low $2,000 minimum is great for those who are facing an emergency cash shortage, while the maximum of $40,000 might be better suited for more ambitious debt consolidation.

Loan Term: The loan term is between three and five years, which is something that the majority of people looking for consolidation options find to be enough. Also, this allows one to pay off their debt a lot quicker and at a decent APR.

Origination Fee: The origination fee ranges from 2.41% to 5% of the total value of the loan. This figure is also quite acceptable for one of the top consolidation companies, especially for people with good credit history. The 2.41% figure is hard to beat, and even 5% isn’t too high, especially if you’re borrowing a relatively low amount.

Funding Time: Because Prosper requires more than just a credit check, the evaluation process itself may take up to 14 days. However, once the application has been approved, the money will be deposited into the applicant’s bank account in three to five days.

Credit Check: Because it is primarily an online service, Prosper allows its visitors to pre-qualify on their site with a soft credit pull. This is one more thing that puts it amongst the best consolidation loans. Later on, in the application assessment process, a hard credit inquiry will be necessary.

Repayment: When it comes to the question of repayment, there are no early repayment penalties whatsoever. So, depending on the APR, you will have the choice to either pay off the debt as soon as possible or stretch it in order to increase your credit score.

What We Liked and Didn’t Like about Prosper

Like all the other peer-to-peer lending platforms, Prosper is incredibly simple to use. Due to the fact that a lot of people might be looking for debt consolidation loans online for the very first time, this is a major head start. This is all a part of Prosper’s cunning strategy. People come in for a simple first loan and then return time and time again for a familiar experience.

Prosper also provides its borrowers with a frugal first start. The origination fee is not that scary, and debt consolidation loans for good credit will provide one with a decent APR. The joint loan option may also make this burden a lot easier to carry, giving the borrower one more reason to opt for Prosper.

The option of changing payment dates is just the kind of versatility that the borrower may need. For instance, a change of the workplace might result in a change in the paycheck date. What makes Prosper one of the best debt consolidation options is the option to adjust this date later on.

Previously, we’ve mentioned the relatively reasonable origination fee. Well, in some scenarios, the high end of that fee may present a serious problem to some borrowers. Provided that your target borrowing amount is near the maximum of $40,000, 5% might be a substantial sum.

For those who just barely pass the credit score quota, the APR might make this loan extremely expensive. Over the course of those three to five years, the APR payments alone may amount to a small fortune.

Avant
Avant

BEST FOR

fair credit borrowers

Visit Website
  • APR: 9.95–35.99%
  • Loan Amount: $2,000–$35,000
  • Minimum Credit Score: 580
  • Loan Term: 2–5 years
  • Origination Fee: Up to 4.75%
  • Type of Loan: Both unsecured and secured options
  • Credit Check: Soft inquiry

There are a lot of great lenders out there specializing in loan consolidation. However, of all the best credit consolidation companies, Avant is the one providing the best terms for those with bad credit. There are a lot of people looking for credit consolidation; however, working with multiple different payment dates often leads to missed deadlines. Add to this the increased total amount of loan and a greater number of credit types, and there you have it, a bad credit loan.

Still, it’s worth mentioning that while Avant may be great for those who have no other choice, the majority of its lenders still have a credit score between 600 and 700. This makes them average middle-class consumers. So, if we absolutely had to define Avant, we would have to say that it goes amongst top debt consolidation companies in the range of bad to fair credit.

Loan Requirements

Avant’s loans require a minimum credit score of 580; however, borrowers with this kind of credit score won’t be able to tap into all the perks that this lender has to offer.

Other than the credit research, all Avant applicants are required to disclose their income source. The verification of their employment is the easiest to achieve through various online verification tools. Applicants have to be 18 or older and have a valid checking or savings account. The credit history of the applicant may go into the credit score but it’s also evaluated on its own.

Loan Agreement Terms

APR: APR on Avant’s loans is between 9.95% and 35.99%. This means that this lender only offers low interest consolidation loans to those who have a decent enough credit score.

Loan Amount: The loan amount ranges from low $2,000 to medium $35,000. As far as the unsecured loans go, this is, more or less, the industry standard.

Loan Term: The loan term can be set anywhere between two and five years. The debts that the majority of borrowers are trying to consolidate have similar terms. This means that the overall APR payments won’t be excessive.

Origination Fee: The origination fee on Avant’s personal loan is at a somewhat steep 4.75%. While this is pretty high, there are no additional fees, which is quite significant for an unsecured debt consolidation loan.

Funding Time: From the moment that one qualifies for the Avant’s loan and gets approved, they might get their funding in as little as one to three business days. Still, it might take a while for all the verifications and background checks to complete.

Credit Check: On its site, the Avant’s platform has the option of making a soft credit inquiry in order to give their borrowers a general idea of whether they’re eligible for the loan in question. It will proceed with a hard credit pull only once the application is made.

Repayment: Avant accepts payments via Automated Clearing House, credit cards, and debit cards. One of the best offers any company for debt consolidation can make is a flexible payment system; Avant allows rescheduling of payments, which can come in really handy if you think you might miss a payment because you don’t have enough funds. Lastly, there’s no fee for early repayment, which is why there’s always an option available to get out of the debt early on.

What We Liked and Didn’t Like about Avant

One of the strongest arguments in favor of Avant offering the best debt consolidation loan options is the fact that it can fund you in a matter of hours (within one business day) after getting approved.

The soft credit pull tool on the website can give you a general clue on where you stand. This is great since it helps people avoid wasting their time on unnecessary applications. It also helps one skip a hard credit inquiry, which can further damage their credit score.

Moreover, as one of the best companies for debt consolidation loans, it has an option to change the payment date of the loan installment. This can be very important for people whose circumstances change unexpectedly.

Other than this, there’s also the fact that Avant charges a fairly high origination fee, making it an unfavorable proposition for people in a desperate financial situation.

Finally, for some people, the ability to add a co-signer is a deal-breaker. This is probably the most serious argument against seeing Avant as providing the best personal loans for debt consolidation.

Upstart
Upstart

BEST FOR

limited credit history

Visit Website
  • APR: 8.41%–35.99%
  • Loan Amount: $1,000–$50,000
  • Minimum Credit Score: 580
  • Loan Term: 3–5 years
  • Origination Fee: 0 to 8%
  • Type of Loan: Unsecured
  • Credit Check: Soft pull with pre-qualification

Young applicants looking for loans to consolidate debt needn’t look further than Upstart. This platform tends to be forgiving towards those with decent earning potential, even if their credit score is on the lower side. So, let’s say that one scores a decent job just out of college and wants to consolidate their debt; this would be the ideal candidate for Upstart loans.

The reason why Upstart is one of the best lending companies for debt consolidation is that it doesn’t focus just on the credit report, debts, income, and assets. Instead, the company uses non-traditional data to make their own financial projection and estimates.

Loan Requirements

The minimum credit score required here is 580. Like always, the minimum required credit score is not that ideal. However, Upstart is seen as one of the best debt consolidation programs because it accepts applicants with insufficient credit history to produce a credit score.

The soft credit inquiry can help make a massive difference. In other words, students looking to pay off their debts, and young entrepreneurs are the primary target audience.

Loan Agreement Terms

APR: APR between 8,41% and 35.99% means that being able to get approved of this loan and making this loan worth it are not one and the same thing.

Loan Amount: The loan range of $1,000 to $50,000 means that this is one of the loan consolidation companies with the largest potential borrowing pool.

Loan Term: The fact that the loan term is between three and five years means that, with the right APR, it might not be that difficult to pay off even a larger amount.

Origination Fee: As for the origination fee, it can range anywhere between 0 and 8%. In other words, it can be either unprecedentedly low or unusually high, depending on the borrower’s circumstances.

Funding Time: Overall, the funding time is supposed to take less than a week. However, the vast majority of borrowers claim that they’ve been funded in less than 48 hours after being approved.

Credit Check: Like with the majority of similar platforms, there’s a soft credit pull for pre-qualification and a hard check in the next stage of the borrowing process.

Repayment: Another thing that would arguably make Upstart the best place to get a debt consolidation loan is that there’s no early repayment fee.

What We Liked and Didn’t Like about Upstart

The most important thing to mention about Upstart’s loans is that it‘s welcoming towards people with short credit history. For a lot of young people, this might just be the opportunity they were looking for.

The soft credit check with pre-qualification is an amazing aspect and, in this regard, Upstart doesn’t differ from other companies offering online debt consolidation loans. It can save one from the unnecessary and completely avoidable hard credit inquiry.

As far as consolidation loans for fair credit go, Upwork has one of the shortest funding times in the industry. For those who see this as an imperative, the funding time shorter than 48 hours can be very persuasive.

The co-signer option is the feature to look for when it comes to a lot of lenders. The lack of this option on Upstart’s platform is severely missed.

The origination fee has a chance to go as high as 8%, making Upstart look quite bad compared to some other loan consolidation companies. Still, for people with good credit history and decent earning potential, it can get pretty low, and the closer it gets to that 0%, the better.

How to Choose the Best Debt Consolidation Company?

Choosing the right debt consolidation loan needs to be a well-thought-out process. First of all, shopping around is necessary. Only after researching several different lenders will you be able to tell industry averages in terms of APR, loan term, origination fees, etc.

All in all, this is a major decision, and its repercussions will stick around for at least several years. Therefore, taking one’s time in order to choose amongst several best personal loans for debt consolidation is the optimal course of action.

Wrap Up

For a lot of people, debt consolidation is the single most logical financial choice when facing multiple debts. Still, whether or not this idea is worth it depends on loan agreement terms like APR and loan term. Things like the origination fee (and other fees, in general) may act like additional obstacles. The key thing is research. Going through multiple debt consolidation reviews might be the best way to handle this process.

FAQ

Is Consolidating Debt a Good Idea?

Whether or not debt consolidation is a good idea depends on several factors. Generally speaking, debt consolidation is supposed to be a financial relief. Such a thing is possible if you find a low interest debt consolidation loan. This is because it is supposed to combine all your minor debts into a single larger one, thus giving you a single payment deadline and a single APR. If the APR is good, you end up paying less. On the other hand, if the long term is substantially longer, you might end up paying more.

Do Consolidation Loans Hurt Your Credit Score?

This question is tricky. First of all, getting a consolidation loan can cause your credit score to drop by a few points. On the other hand, consolidation reduces your monthly payments and replaces several deadlines with a single one. This means that it makes it easier for you to be financially responsible. In time, this should result in a significant improvement in one’s credit score. Personal loans to pay off credit cards are a perfect example of how this works.

How Do Debt Consolidation Loans Work?

The simplest way to explain how debt consolidation works is to say that it is a loan to replace all your loans. Let’s say that you’re $1,000 in debt to five different creditors and the payment term is pretty short. The best course of action here would be to look for the best debt consolidation companies available and borrow enough money to pay them all off over a longer period of time. In the end, you owe the same amount of money, but you can spread the monthly installments over a longer period of time. Plus, if the debt consolidation loan’s APR is better than that on your previous loans, you end up paying less in the long run. It’s that simple.