Financial Planning
October 18, 2021

Who has the best debt consolidation loans?

Where to find good consolidation loans with competitive APRs.

Debt consolidation loans can help you pay off high-interest credit cards (and other debts) with a single monthly payment at a lower interest rate. 

It’s a kind of personal loan you can use to pay off other debts, so you can take advantage of a new loan’s lower interest rate. With a debt consolidation loan, you’ll pay less in interest, and you’ll have the convenience of making one monthly payment, instead of juggling monthly due dates for several cards or loans.

When comparing debt consolidation loans, start by searching for the lowest Annual Percentage Rate or APR. A loan’s APR is the most accurate number to use for comparison purposes, because it includes fees and charges as well as the interest rate. 

APRs are an easy criteria for comparison -- but don’t stop there. Consider your loan amount too -- and if the rates or terms change for the specific amount you’re looking for. 

Your credit score might also impact the APR you’re offered -- and it might be very different from the rate a lender promotes to entice you. 

Most debt consolidation loans offer similar repayment terms, requiring on-time monthly payments with penalties when you’re late or not paying in full. Penalties should be clearly detailed, so check them out. 

One more thought: your debt consolidation loan should come with low or no fees -- an industry standard you should expect. Origination fees -- a charge intended to cover the cost of processing your loan -- should be low, if they’re charged at all. It’s typically added to your loan balance or included in your APR. 

Which are the best debt consolidation loans to consider?

Here are the the best debt consolidation loans to consider:

  1. Bright Credit
  2. Payoff
  3. Lightstream
  4. Marcus by Goldman Sachs
  5. Upgrade
  6. Upstart
  7. Prosper
  8. Discover

The APRs and other details listed here are current as of July 2021. Check with individual lenders for changes and updates.


Bright Credit by Bright Money

Est APR- 9% –29.99%

Loan amount- $500 - $8,000

Credit score- 


Est APR- 5.99 - 24.99%

Loan amount- $5,000 - $40,000

Credit score- 640


Est APR- 4.49 - 20.49%

Loan amount- $5,000 - $100,000

Credit score- 660

Marcus by Goldman Sachs

Est APR- 6.99 - 19.99%

Loan amount- $3,500 - $40,000

Credit score- 660


Est APR- 5.94 - 35.97%

Loan amount- $1,000 - $50,000

Credit score- 580


Est APR- 6.95 - 35.99%

Loan amount- $1,000 - $50,000

Credit score- 580


Est APR- 7.95 - 35.99%

Loan amount- $2,000 - $40,000

Credit score- 640


Est APR- 6.99 - 24.99%

Loan amount- $2,500 - $35,000

Credit score- 720

What is the smartest way to consolidate debt?

Consolidating debt can be a smart financial move if done strategically. One of the most common methods is to take out a debt consolidation loan like Bright Money’s Bright Credit, which combines multiple debts into a single, more manageable loan with a lower interest rate. This can simplify your payments and potentially save you money on interest over time. However, it's crucial to shop around for the best loan terms and ensure that the new interest rate is indeed lower than what you're currently paying.

Another option is transferring high-interest credit card balances to a single card with a lower interest rate or a promotional 0% APR offer. This can provide temporary relief from interest charges, allowing you to focus on paying down the principal amount. Be mindful of balance transfer fees and the duration of the promotional period, as interest rates may spike once the introductory offer expires.

Regardless of the method you choose, it's crucial to address the underlying spending habits that led to debt accumulation in the first place. Creating a budget, cutting unnecessary expenses, and building an emergency fund can help prevent future financial strain and ensure long-term financial stability. Consulting with a financial advisor can also provide personalized guidance tailored to your unique situation.

How can I qualify for a debt consolidation loan?

A debt consolidation loan can be a great opportunity to relieve the burden of debt payments -- but it’s also a serious financial tool with strict terms and qualifications. Qualifying terms should be one of the first things you check when comparing loans. 

The baseline requirements are common among lenders. Typically, you’re required to be a legal U.S. resident who is 18 years or older. Also, most lenders won’t accept you if you’re in foreclosure or bankruptcy.

Beyond those basic terms, your credit score is a major factor. Most lenders expect a score of 600 or higher to offer a debt consolidation loan. They also expect a healthy credit history, with a DTI of 45% or below. Your “DTI’ is your debt-to-income ratio, which is the percentage of your gross monthly income that you pay every month toward your debts.

Most lenders look for a minimum credit score in the mid-600s and a debt-to-income (DTI) ratio below 45 percent. DTI is the percentage of your gross monthly income that goes toward your monthly debt payments. 

Keep in mind that a high credit score and a low DTI can really help with debt consolidation loans, translating to better APRs and larger loan amounts.

Bright Money does not offer debt consolidation loans. However, we offer two other solutions: Bright Credit Builder and Bright Balance Transfers. These are smart alternatives with competitive rates and built-in automation. 

Why Bright Money?

Bright Money offers a suite of innovative financial products designed to assist individuals in rebuilding their credit and achieving financial wellness. Bright Plan is at the forefront of these offerings, a comprehensive financial planning tool that empowers users to create personalized budgets, track spending habits, and set achievable financial goals. Bright Plan helps users make informed decisions to improve their credit standing by providing actionable insights and recommendations based on individual financial circumstances. 

Bright Builder, another flagship product, is specifically tailored to help users establish and build their credit history. Through responsible use of Bright Builder, individuals can gradually build positive credit activity, leading to improved credit scores over time. Moreover, Bright Money offers educational resources and personalized coaching to support users' credit-building journey. By combining cutting-edge technology with expert guidance, Bright Money provides a holistic approach to financial wellness, empowering individuals to take control of their finances and build a brighter future.

In addition to Bright Plan and Bright Builder, Bright Money offers Bright Credit, an innovative tool designed to further enhance users' credit-building efforts. Bright Credit provides personalized strategies and insights to help users optimize their credit utilization, manage credit inquiries, and strategically improve their credit score over time. With Bright Credit, users can take proactive steps towards achieving their financial goals and securing a brighter financial future.


In conclusion, debt consolidation loans offer a practical solution for individuals seeking to simplify their finances and reduce their interest payments. By combining multiple debts into a single loan with a lower interest rate, borrowers can save money and enjoy the convenience of making one monthly payment. When comparing debt consolidation loans, it's crucial to consider the Annual Percentage Rate (APR), loan amount, repayment terms, and potential fees. Researching and comparing multiple lenders' offers can help borrowers find the best option to suit their financial needs and goals.


1. What is the smartest way to consolidate debt?

Consolidating debt is ideal for saving money, especially if you're dealing with high-interest credit cards or payday loans. By consolidating debts into a single loan with a lower interest rate, you can pay less in interest overall. Additionally, making timely payments on your consolidation loan can help improve your credit score over time, reducing the risk of late fees associated with juggling multiple payments.

2. How can I qualify for a debt consolidation loan?

Qualifying for a debt consolidation loan typically requires meeting certain criteria set by lenders. You must be a legal U.S. resident aged 18 or older, and most lenders won't accept applicants in foreclosure or bankruptcy. Additionally, lenders typically look for a credit score of 600 or higher and a debt-to-income ratio (DTI) below 45%. A higher credit score and lower DTI can result in better loan terms, including lower APRs and higher loan amounts.

3. What should I consider when comparing debt consolidation loans?

When comparing debt consolidation loans, it's essential to consider the APR, loan amount, repayment terms, and any potential fees associated with the loan. The APR is particularly crucial as it reflects the true cost of borrowing, including interest and fees. Additionally, borrowers should evaluate their financial situation and choose a loan that offers manageable monthly payments and fits their long-term financial goals.

Recommended Readings

Do consolidation loans hurt your credit?

How to calculate loan amortization?


Pranay Chirla
Technical Content Writer
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