5 Best Debt Consolidation Companies [2024]

Having multiple high-interest debts can be overwhelming. In 2023, the average credit balance in the U.S. was $6,501, while Gen X carried the largest balance of $9,123. If you carry a balance on multiple cards, you’re not alone.

Debt consolidation companies can help you simplify repayment and save money. Through these companies, you can take out a personal loan for debt consolidation, ideally at a lower-than-average interest rate, to pay off your high-interest debts. If you have good credit, this may be a good debt repayment option.

Read on for our recommendations for the best debt consolidation loan companies, the pros and cons of consolidation, and tips for choosing the right company.

Top 5 Debt Consolidation Companies 

We reviewed 20 companies to select our recommendations for the five best debt consolidation loan companies. We considered a number of factors, such as:

• Loan amounts
• Repayment terms
• APRs
• Credit score requirements
• Ease of application
• Customer reviews

1. SoFi

• APR: 8.99%-25.81%
• Loan Amount: $5,000 to $100,000
• Term: 36 months to 84 months
• Minimum Credit Score: No minimum requirement

SoFi debt consolidation loans top our list because they offer competitive interest rates, quick funding, and a variety of loan amounts. You can prequalify to check the rate you qualify for. You’ll typically get funds in your bank account within 24 hours once you’re approved.

SoFi also offers several types of rate discounts, such as for setting up direct deposit or enrolling in autopay.

Pros

• Ability to apply with a co-borrower
• Multiple rate discount opportunities
• Same-day funding
• Unemployment protection and other borrower perks
• Large borrowing limits of up to $100,000

Cons

• A 7% origination fee may apply to get the lowest rates
• Not available in all states

2. PenFed Credit Union

• APR: 8.99%-17.99%
• Loan Amount: $600 to $50,000
• Term: Up to 60 months
• Minimum Credit Score: Not disclosed

While you’ll need to be a member of the credit union to get a debt consolidation loan, you’ll just need to open a savings account and deposit $5 to become a member. PenFed offers online and in-person applications, has fast funding, and has a low APR range, which makes it an attractive option.  

Pros

• Offers joint loans with a co-applicant (if you need one to qualify)
• No loan origination fees
• Competitive APRs
• Quick funding

Cons

• You’ll need to be a member
• Doesn’t specify minimum credit score requirements
• The maximum loan term is five years

3. Best Egg

• APR: 8.99%-35.99%
• Loan Amount: $2,000 to $50,000
• Term: 36 months to 60 months
• Minimum Credit Score: 640

Best Egg is on our list of the best consolidators because it offers secured loans at lower rates in addition to unsecured loans. Borrowers can use their vehicles or the valuable fixtures in their homes as collateral to qualify.

Best Egg will also pay funds to your lenders directly, which makes the entire consolidation process easier.

Pros

• Direct payment to creditors
• Secured loans with lower APRs
• Quick funding

Cons

• Origination fee of 8.99%
• Not available in all states
• Good credit score required to qualify

4. Navy Federal Credit Union

• APR: 8.99%-18.00%
• Loan Amount: $250 to $50,000
• Term: Up to 60 months
• Minimum Credit Score: Not disclosed

Navy Federal Credit Union (NFCU) offers personal loans with competitive APRs and flexible qualification requirements. However, you’ll need to be an active-duty member of the armed forces, a retired military member or retired civilian employee of the Department of Defense, a veteran of any branch of the U.S. Military, an active Department of Defense (DOD) personnel member, or an immediate family member to qualify for membership.

If you’re already a member, you can take advantage of rate discounts, same-day funding, and flexible loan amounts for debt consolidation.

Pros

• No origination fees
• Rate discounts for setting up direct deposit and/or autopay
• Same-day funding in most cases
• Competitive APRs

Cons

• Requires credit union membership
• Credit score requirements are not specified
• No autopay discount

5. LendingClub

• APR: 8.98%-35.99%
• Loan Amount: $1,000 to $40,000
• Term: 24 months to 60 months
• Minimum Credit Score: 600

LendingClub has a relatively low minimum credit score requirement of 600 and allows you to add a co-borrower to your loan application if you prefer or need one to qualify for better lending terms. On the other hand, there are no discounts for autopay, and you’ll pay a high origination fee of up to 8%.

LendingClub may be a good option for those who have FICO scores good enough to qualify for the lender’s lower annual percentage rates, since the maximum APR is 35.99%, which likely won’t leave you with much savings after consolidation.

Pros

• Direct payment to lenders
• Lower credit score requirements
• Offers joint loans

Cons

• High origination fees
• High maximum interest rates
• No rate discounts

Pros and Cons of Working With a Debt Consolidation Company

Enrolling in a debt consolidation program can help you make repayment easier and save money, but it's important to weigh the pros and cons to decide if it’s the right option for you.

Pros

• A single monthly payment, instead of multiple payments, to make each month
• Ability to save money if you qualify for a lower rate
• Assured final payoff date on a fixed-term consolidation loan may allow you to become debt-free sooner
• On-time payments may help you improve your credit score each month
• Your monthly payment may be lower than all your current debt payments combined

Cons

• You’ll need good credit to qualify for lower rates
• You may pay more in total interest if you choose a longer repayment term
• You may not be able to save much if you have lower credit scores and can only qualify for a lender’s higher rates

Types of Debt Consolidation Companies

There are two different types of debt consolidation companies to choose from: online lenders and nonprofit credit counseling agencies. Keep in mind that there are no free government debt consolidation programs. Here’s how they differ.

Non-Profit Debt Consolidation Companies

Credit counseling agencies offer debt management plans (DMPs) that help consolidate all your debts without having to take out a new loan. If you have a recent history of bad credit, this may be a good option. You’ll need to talk to a certified credit counselor during the free consultation to see if this is the right option for you.

Once you enroll in a DMP, you’ll make a single payment each month to the credit counseling agency, which will be distributed to your lenders on your behalf–this is one of the benefits of a DMP. You’ll need to pay a one-time setup fee and a monthly fee to enroll in a DMP. Keep in mind that a DMP may be a good debt solution for credit card debt but can’t be used for outstanding medical bills or secured loans like auto loans.

Online Debt Consolidation Companies

Another way to consolidate your debt is by borrowing a new unsecured fixed-rate personal loan with a fixed repayment term and using the funds to pay off your debts. You’ll have a single loan with a fixed interest rate and predetermined loan payoff date, which makes repayment easier and more predictable.

You’ll be able to borrow a loan from online lenders, credit unions, and banks that offer a seamless online application process. You’ll likely need to have a solid credit profile with a “good” to “very good” credit score (typically 680+) to qualify for an interest rate that’s significantly lower than the average rate you’re currently paying on your debts.  

How To Choose a Debt Consolidation Company

Keep the following tips in mind when comparing your options to find the best debt consolidation company:

• Check the company’s reviews on sites like Trustpilot, Google, and Better Business Bureau (BBB) to see what past clients have to say about their services.
• A good company will be transparent about its upfront fees, APRs, and lending terms.
• Check to see what customer support options the company offers, i.e., online chat, phone numbers, and email.
• Check the lender’s eligibility requirements to see if you’ll qualify. You may be able to prequalify for a personal loan with most lenders.
• If you’re picking a credit counseling agency for a consolidation, make sure they’re accredited by the American Fair Credit Council (AFCC).

Are Debt Consolidation Companies Worth It?

If you have a lot of high-interest unsecured debt like credit card debt, payday loans, or personal loans, a debt consolidation company may be able to help. Keep in mind that this is only a good option if you’re able to qualify for a lower rate compared to what you’re currently paying.

If you have good credit, there are other options available to consolidate your debt, such as through a line of credit, home equity loan, secured loan, or a balance transfer credit card. If you don’t have strong credit because you’ve recently missed a payment or two, you may want to enroll in a debt settlement program or a DMP. In some cases, bankruptcy may make more sense as a last resort.

Debt consolidation may not be a good idea if you can’t qualify for a lower rate, you have several late payments or debts that are in collections on your credit report, or your new monthly payment seems totally unaffordable. You may want to contact a debt settlement company to explore other debt-relief options that may work for you based on your financial situation.