What are the best debt consolidation loan rates? This question is about Average Personal Loan Interest Rates

What are the best debt consolidation loan rates?

This question is about Average Personal Loan Interest Rates

Adam McCann, Financial Writer

@adam_mcan • 04/05/21 This answer was first published on 12/09/19 and it was last updated on 04/05/21.For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Debt consolidation loan rates usually range from 6% to 36%, depending on the lender. The best debt consolidation loan rate is 5.95%, from LightStream (a division of SunTrust Bank), with its personal loan offer. Only the most qualified applicants will receive a rate that low, but even LightStream’s maximum APR is relatively low, at 17.29%.

Most lenders don’t offer loans specifically for debt consolidation. Rather, they offer general personal loans that can be used for any purpose, including consolidating debts. The average rate is around 10%, according to the Federal Reserve Bank of St. Louis. So if you can get a lower rate than that, you’re on the right track.

Let’s take a look at some popular personal loans that can be used for debt consolidation, along with their rates.

Debt Consolidation Loan Rates by Lender

LightStream: 5.95% - 17.29%
Payoff: 5.99% - 24.99%
Best Egg: 5.99% - 29.99%
Achieve Personal Loans: 5.99% - 29.99%
LendingClub: 6.95% - 35.89%
Prosper: 6.95% - 35.99%
Avant: 9.95% - 35.99%
LendingPoint: 9.99% - 35.99%
American Express: 6.90% - 19.98%
Discover: 6.99% - 24.99%
Wells Fargo: 5.24% - 22.99%
Marcus by Goldman Sachs: 6.99% - 28.99%

There’s a way that you can estimate your debt consolidation loan rates before applying. If you use WalletHub’s free personal loan pre-qualification tool, you’ll see your odds of being approved with various lenders, along with what rates you might qualify for.

Is debt consolidation a good idea?

Debt consolidation is a good idea for borrowers with high-interest debts owed to multiple lenders. Whether or not debt consolidation is wise depends largely on if you can get a new loan or credit card that will save you money compared to the current cost of your debts. The simplicity of a single payment can be helpful, too.

How Much You Can Save With Debt Consolidation

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Why is debt consolidation a bad idea?

Debt consolidation is a bad idea if it does not save you any money. This happens when the interest rate on your new loan or line of credit ends up being higher than that of your existing debts, which mostly defeats the purpose of consolidation. In that case, the only benefit would be having all your debts in one place. Debt consolidation may be a bad idea in other situations too, like if you work...

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What is the best way to consolidate debt?

The best way to consolidate debt is to take out a new loan or credit card that has a lower APR than all of the original debts and then use it to pay off the original debts. This turns multiple monthly payments into one and reduces the cost of the total amount owed, allowing the borrower to get debt-free sooner. The best debt consolidation options will not charge any fees to complete this move, either.

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