Best Personal Loans For Debt Consolidation

A personal loan can help consolidate all of your debt into one easy payment, and it might just be the best way to get out of debt in the long run. 

The seven best personal loans for debt consolidation on the market today are below, listed in order from highest to lowest interest rate. First, let’s cover some basic information about personal loans before we go over each option in detail. 

For example, you can typically borrow between $2,000 and $40,000 depending on your credit score and income level, and the repayment term is often three or five years depending on your desired monthly payment amount.

1) What are you consolidating?

A personal loan is a great debt consolidation tool if you have high-interest credit card bills, an outstanding car loan, or other loans with variable interest rates. 

If you're consolidating credit card debt, for example, a 0% intro APR could save you tons of money on interest over time. 

A personal loan from a bank or credit union can also be easier to qualify for than some other options. It's best to apply directly through your institution; however, if your local bank won't help you out, online lenders often offer more options and lower fees. 

A good site like NerdWallet can help match you with products and lenders that are best suited to your situation—all for free!

2) Find a lender

Depending on your financial situation, you have a number of options when it comes to applying for a personal loan. 

Some lenders specialize in consolidation loans and offer specific programs to help borrowers with multiple loans at different rates consolidate their debt into one payment at a fixed rate. 

Other lenders let you use consolidation as an added bonus to their other loan offerings; they may not have special programs designed specifically for debt consolidation, but they do make it easy to submit a request through their online platform and may offer lower rates than some specialized lenders. 

And if you’re trying to consolidate credit card debt—which isn’t necessarily recommended—you can apply for what’s called an unsecured personal loan, which allows borrowers to borrow up to $40,000 without collateral.

3) Choose the right balance transfer deal

Balance transfer deals are one of the best ways to consolidate debt, especially if you have a high-interest credit card balance. 

By moving your debt onto a new card with a lower interest rate, you’ll pay less in interest and, ideally, will be able to pay off your debt more quickly. But not all balance transfer cards are created equal. 

Some have low introductory rates that jump up after 12 months while others have no introductory period at all. 

There is also some variation in how long they allow you to make payments before they charge a fee. For example, you may be charged on an unbalanced amount as early as six months or even 12 months into using your card.

4) Read the terms of your balance transfer offer carefully

There are multiple fees associated with a balance transfer, such as an origination fee, a balance transfer fee and an annual fee. 

While they may seem small individually, they can quickly add up. Make sure to check your credit card statements regularly. 

These charges may be buried in with other purchases that you’ve made during that time period. Plus, some issuers will charge additional late fees if your payment is even one day late; if you aren’t careful you could end up paying double or more than what you owe! 

So read any offers carefully before deciding on which credit card to use and watch out for sneaky terms that could potentially cost you thousands of dollars over time. When in doubt: Ask! If something sounds too good to be true it probably is.

5) What is the 0% Balance Transfer APR?

Different credit cards give different amounts of time in which you can enjoy 0% interest. This period is typically anywhere from 6 months to 21 months, but there are some cards out there that offer up to 24 months or even longer. 

But how long does your 0% period last? That depends on a few things: 1) whether you're carrying a balance over from another card and 2) what type of card you have. 

There are cards that offer 0% for only new purchases, while others give 0% on both new purchases and balance transfers (typically with a fee for transfers). If you're not interested in spending your time researching what these terms mean - don't worry about it!

6) How long do I have until my 0% period ends?

The length of time that you have to consolidate your debt is different depending on what type of loans you take out. Federal consolidation loans typically come with a period of 0% interest, but will vary based on how much money you need and how long it will take to pay back. 

For example, a loan for $10,000 could be as low as five years while a loan for $50,000 could be 15 years. Keep in mind that these are general terms and should not be used as an exact guide; contact lenders directly to learn more about their individual programs.

7) What if I can’t pay off my debt before my low rate ends?

If you can’t pay off your debt before your low rate ends, it’s going to be incredibly difficult to justify paying a higher interest rate on future loans. The trick is to try and pay off as much of your debt as possible while rates are still low. 

The more debt you pay off, the easier it will be to avoid making future debt consolidation loans that may be more expensive. 

Keep in mind that if you aren’t able to pay off any of your debts before your low-interest rate ends, it might make sense to reconsider other options for dealing with high-interest debt like credit counseling or bankruptcy.