Best Debt Consolidation Loans in October 2026

Debt consolidation is the most popular use for personal loans on the Credible marketplace. People who took out debt consolidation loans paid off $24,069, on average, in September. Data is based on 3,217 closed loans.

Consider a debt consolidation loan if you:

• Can lower your interest rate
• Need to reduce your monthly payment
• Would rather simplify multiple payments into one
• Want to improve your credit by paying down credit card balances

A primary benefit of debt consolidation is saving money through a lower interest rate. But it can also reduce your monthly payment by lowering your rate, extending your repayment term, or both — which could help you avoid late fees and credit damage.

Debt consolidation may not make sense if you: 

• Can’t afford the new loan payment
• Won’t qualify for a lower interest rate
• Aren’t struggling to manage multiple payments
• Are considering bankruptcy

If a new loan doesn’t provide a clear advantage, such as a lower interest rate or lower monthly payment, it’s usually not worth it. And if bankruptcy is on the table, new debt could be considered fraudulent and not dischargeable.

The main goal is to benefit from a lower interest rate and/or a lower monthly payment on the new loan compared to the loans you paid off. But you might also (or instead) consolidate debt to improve your credit score or to simplify your finances (trading several monthly debt payments for one). 

Here’s how:

1. Add up the debts you’ll consolidate: Consider how much money you need to consolidate your debt. This will be a starting estimate prior to adding upfront fees like a balance transfer fee or an origination fee.
2. Know your budget: Assess how much you can comfortably pay toward debt each month. (This figure could determine the type of debt consolidation loan you seek.) 
3. Know which debt consolidation options are available to you: Personal loans and 0% APR balance transfer credit cards are commonly used. A home equity loan or HELOC may be an option as well if you own a home, have enough equity, (typically, at least 15%), and are willing to pledge it as collateral. 
4. Choose the type of debt consolidation loan: If you can’t or don’t want to secure a loan with your home, look to personal loans and balance transfer cards. Now, look at your budget. If you can comfortably afford to pay off the bulk of what you’ll consolidate within the term of a 0% APR introductory offer (often 12 to 24 months) — and can qualify for a 0% APR card — this may be your best bet. If not, look to a personal loan for longer repayment terms and lower monthly payments.  
5. Compare offers and apply: Once you’ve determined the type of loan you’ll use, prequalify with multiple companies. For instance, most personal loan lenders and many credit card companies will provide an estimate of the APR and terms you might qualify for with a soft credit check. Compare quotes to find the best lender/loan option for your needs.
6. Pay off existing debts: Once you’re approved, use the loan funds or your new credit line to pay off the debts you want to consolidate. In many cases, your new debt consolidation lender can do this for you. For instance, credit card and personal loan companies may ask for account numbers for debts you want to pay off on the application. In this case, they can route money to those creditors on your behalf. 
7. Make payments on the new loan: Once the old loans are paid off, begin paying off the new loan.

While personal loans are a common way to consolidate debt, they’re not the only way — and sometimes there are better options. Which is best depends on how much debt you have, the quality of your credit, which types of loans are available to you, and how long you’ll need to comfortably afford repayment. 

• Personal loans offer fixed payments, relatively fast funding, and lower average rates than credit cards. They’re ideal if you have good credit and need a low monthly payment. Plus, they’re typically unsecured, meaning you don’t risk collateral. They may be your only option if you don’t have home equity and can’t qualify for a 0% APR balance transfer card. While rates are lower than average credit card rates, they’re higher than rates on home equity loans (and 0% APR credit cards). Watch out for origination fees.
• 0% APR balance transfer credit cards may seem like a no-brainer — if paid off during the promotional period, you can save significantly in interest. But promo periods top out at 2 years. If you can’t afford to pay off the transferred amount in that timeframe, you’ll be charged interest at the card’s standard rate, which could defeat the purpose of debt consolidation. Most cards also charge a balance transfer fee between 3% and 5%.
• Home equity loans provide lower interest rates (under 10%) and longer terms than other debt consolidation options, but typically require at least 15% equity in your home and take longer to fund. Since your home is used as collateral,  you could lose it if you can’t make payments. Pay attention to closing costs.

The key elements of a debt consolidation loan typically include the following, which differ depending on the loan type:

The amount of debt you want to consolidate, what you can qualify for, and whether you own a home with equity all influence which debt consolidation option is best for you (and which are available to you).

• If you don’t own a home and have a 670 FICO score or higher: With good credit, you’re more likely to qualify for a low rate on a personal loan or a 0% APR balance transfer offer. If you can pay the debt off before the 0% APR expires (typically 12 to 21 months), the balance transfer credit card could save you money. If you need more time or want to reduce your credit utilization, choose a personal loan with a term of 2 years or longer.
• If you want to reduce your credit utilization to improve your credit score: Credit utilization on revolving accounts contributes up to 30% to your overall score, so carrying a high balance on your cards can drive your score down. A quick fix is to leverage an installment loan to pay off credit card debt — like a personal loan or home equity-based loan. Once your cards are paid off (or down), the credit card company will report your new balances to the credit bureaus, which means you could see significant score gains within one month. 
• If you own a home with equity: You typically have the most options in this case, especially if you have good credit. Using your home’s equity could provide the lowest APR and lowest monthly payment, but that’s because you secure the loan with your home as collateral. It can be a smart move for a low rate, but trading unsecured debt (like credit cards) for secured debt can be risky since the lender could go after your home if you can’t make payments. 
• If you don’t own a home and have a low credit score: In this scenario, you may be limited to seeking a personal loan for fair or bad credit. If you have fair credit (a 580 to 670 FICO score), you’ll have more options between lenders; with bad credit (a FICO score below 580), you may need to find a lender that accepts joint applications, offers secured loans, and/or allows cosigners. You also may not be able to get a lower rate than what you’re currently paying on cards, but you could get lower monthly payments (in exchange for a longer repayment period).

When shopping for debt consolidation loans, follow these steps:

1. Prequalify with multiple lenders (and credit card companies if comparing loan options) to get a sense of the APR you might qualify for and monthly payments. (See if you prequalify for a personal loan by selecting “Find My Rate” or “Check Rates” on this page.)
2. Consider upfront fees. Origination fees are typically paid upfront (out of the loan proceeds) and may reduce the amount you or your creditors receive. In this case, you’ll need to borrow more than the amount you owe to compensate. Seek out lenders without origination fees, if possible. 
3. Estimate monthly payments with a personal loan calculator for different repayment periods based on APRs you've prequalified for. You can use a basic calculator to estimate monthly payments for a 0% APR credit card — just divide the amount you’re transferring (plus the balance transfer fee) by the 0% APR term to get the monthly payment.
4. Find lenders that offer the loan amount you need and the repayment term you want.
5. Prioritize lenders that pay your creditors directly. Some personal loan lenders will discount your interest rate for choosing the direct-pay option.

Learn More: How to Choose the Best Debt Consolidation Loan Lender

While a debt consolidation loan may help you simplify debt or pay it off faster, it’s not the only or always the best option.

Debt avalanche or debt snowball methods

If you can’t get a lower rate, or don’t want to sacrifice credit score points to a hard credit pull (required for most new loan applications), it can make sense to keep your current debt and get strategic about paying it down.

The debt avalanche is the quickest way to go — make larger payments on debt with the highest interest rate, while paying the minimum on lower-rate balances. By paying down your highest-interest rate debt first, you can minimize interest costs, accelerating your debt payoff and saving money. But if you’re motivated by quick wins, choose the debt with the smallest balance to pay off first — this is the debt snowball method. The psychological impact of paying off one credit card or loan can be huge and keep you motivated to tackle the next debt in line. 

Debt management plan

A debt management plan, or DMP, through a certified credit counseling agency can help you create a debt paydown plan in cooperation with your creditors. The credit counselor may also be able to negotiate to forgive fees or lower interest rates on your behalf.

Instead of paying your creditors directly, you pay the credit counseling agency instead, which then sends payments to your creditors. You’re typically required to close the accounts you’re paying off as well, and are not allowed to open new credit accounts.

Fees consist of an enrollment fee and monthly maintenance fees — both modest in comparison to most other debt consolidation alternatives.

Debt settlement (not recommended)

Debt settlement companies offer to negotiate with your creditors to reduce how much you owe. However, you’re often required to stop making even minimum payments as a negotiation tactic, and the process can take years. In turn, this can devastate your credit.

Even if you already have bad credit, settled debts stay on your credit report for up to seven years. Plus, there’s no guarantee that creditors will approve a settlement, and they could sue or seek to garnish your wages for repayment. Payment is usually made to the debt settlement company based on a percentage of the settled amount and only if the company succeeds in settling one or more of your debts. 

Bankruptcy

Bankruptcy is typically a last-resort option, but it can also be a strategic move if you’re working to preserve your retirement or savings accounts and don’t foresee being able to pay down debt with new income. That said, it has serious credit consequences and will stay on your credit report for up to seven to 10 years depending on the type of bankruptcy you file. If you can pay off debt via debt consolidation or a debt management plan, either is probably a much better option. Consult with a bankruptcy attorney to better understand the risks, benefits, and costs of filing. 

Debt consolidation loans have clear benefits whether you have multiple accounts you want to consolidate or just need a lower monthly payment. (You can also use a debt consolidation loan to pay off one loan only). But they have some drawbacks you should also consider.

Credible evaluated 32 lenders across 1,184 data points to choose the best lender overall plus top picks for different borrowers and use cases. Across lenders, we collected data on customer experience and service options, minimum and maximum fixed interest rates, minimum and maximum loan amounts, funding times, loan terms, fees, discounts, third-party reviews, and more.

We assigned a score to each attribute based on how that feature compared with the same feature for every other lender in the set. Scores were weighted according to their relative importance — for instance, maximum origination fee scores received a high weight since loan cost is among the most important factors in determining loan value. Individual attribute scores were then added to determine each lender's overall star rating. 

Attributes were grouped into categories; each category contributed to lender scores as follows: 

• Borrower cost (22.5%): Origination fee ranges and minimum and maximum APRs measure upfront and overall costs and lender accessibility across credit score groups.
• Flexibility (22.5%): Maximum loan terms, number of loan purposes, minimum and maximum loan amounts, and availability of joint and secured loans measure the range of options for loan size, repayment terms, and loan types.
• Eligibility and availability (22.5%): Minimum income requirements, funding speed, minimum credit score requirements, and state availability measure how easily and how quickly borrowers can access personal loans.
• Reputation (15%): Trustpilot, Better Business Bureau, and J.D. Power ratings measure customer satisfaction.
• Discounts, customer service, and account management (12.5%): Discounts for autopay and direct pay, plus availability of mobile apps and live customer support chat, measure borrower perks and ease of loan management.
• Partner lender data (5%): Data from loans closed by our partners, including average rates, loan amounts, funding time, and eligibility criteria, measure real-world performance and borrower outcomes.

Non-partner lenders were evaluated based on the same criteria but not assigned star ratings. Learn more about how Credible rates lenders by exploring our full personal loans lender rating methodology.

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of these relationships, we have access to the most current interest rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, approval rates overall and by lender, and more. Lender-specific data is based on 12 months of loans closed by that lender on the Credible marketplace. Lenders may also provide product and eligibility insights that we share in reviews. The data we use is primary source data and does not include any personally identifiable information about borrowers.