Formato solicitud para consolidar deudas
Timothy R
By: timothy-ronaldson
Read in 19 minutes

15 Best Debt Consolidation Loans of 2022

The best debt consolidation loans can help you get out of debt faster and—more importantly—potentially save you a lot of money as you’re paying down your debt.

But, before you can even consider these loans, you should understand what these loans are, how they work and how you can use them. 

We’ll provide all the information below so you can choose the best debt consolidation alternative.

Apply For A Loan!

 

How Does Debt Consolidation Work?

Debt consolidation is the process of combining multiple debts into one debt. Most people will consider this alternative to simplify their monthly payments and save money while doing so. 

Instead of paying multiple monthly payments to these accounts at varied and usually high-interest rates, you can consolidate these accounts and wrap them into just one. 

This allows you to make only one monthly payment for all of your debts. 

What’s more, you might be able to qualify for a lower interest rate on the new loan (compared to all the separate previous accounts), which could reduce the total repayment amount.

What Is A Debt Consolidation Loan?

A debt consolidation loan is a financial product that will allow you to borrow a lump sum to pay off your other outstanding debt. 

Some debt consolidation loans will require you to pay those other accounts off directly through the loan, while others will give you the freedom to do this on your own afterward. Some lenders may even pay the debts themselves.

What type of debt can you repay with these loans?
Payday loans, credit card debt, or even other business or personal loans.

The best debt consolidation loans will offer you fixed interests so that you have cost certainty throughout the life of the loan. This is different from, say, credit cards, which typically have variable interest rates. 

Through the debt consolidation loan, you’ll be wrapping all of your outstanding debt into one account, making it simpler to understand and manage it. 

For instance, if you have five credit cards, you’d roll them all into your debt consolidation loan. Then, instead of making five monthly payments, you’d make just one.

Again, because of the lower, fixed interest rate, you’ll likely save money during the repayment process and pay off your debt faster.

#DidYouKnow
Debt consolidation typically works best for people who have multiple high-interest debts. 

Best Debt Consolidation Loans

There are a lot of companies out there (banks, credit unions, online lenders…) offering these financial products, which can make it difficult to discern the loan for consolidating debt that best suits your needs.

Here are some of the top options for the best debt consolidation loans.

Personal Loans

Camino Financial Solopreneur Loan

The Solopreneur loan works like a personal loan and has minimal requirements. You can even apply with SSN or ITIN.

Amount: Loans between $1,500 and $7,500.

Credit score needed: We accept people with no previous credit history. 

Interest rate: The annual interest rate is between 25% and 40%

Repayment period: The loan terms offered are 12 to 36 months. 

Type of loan: Unsecured personal loans.

Funding time: Just 2 days.

Other information: We offer fixed monthly payments that allow you to budget and easily consolidate your debt.

Get Approved Today

 

Sofi

Amount: They offer personal loan amounts between $5,000 and $100,000

Credit score needed: The minimum credit score you need to qualify is 680.

Interest rate: Their APRs are between 5.74% and 20.28%.

Repayment period: The loan has a repayment period between 2 and 7 years.

Type of loan: Unsecured loan.

Funding time: You can receive your loan funds in just a few days.

Marcus by Goldman Sachs

Amount: Between $3,500 and $40,000.

Credit score needed: The minimum credit score is 660.

Interest rate: The APR offered varies between 6.99% and 19.99%.

Repayment period: The repayment period is between 3 and 6 years.

Type of loan: Unsecured.

Funding time: You’ll receive your loan proceeds in just a few days.

Upgrade: best debt consolidation loans for fair credit

Amount: between $1,000 and $50,000.

Credit score needed: The minimum credit score you need to qualify is 560, but the average borrower has a score of 678.

Interest rate: APR of 5.94% to 35.47%, depending on your application

Repayment period: between two and seven years.

Type of loan: Unsecured.

Other information: You don’t need to have a minimum income, though the average borrower has one of $78,000. This loan also has an origination fee of between 2.9% and 8%.

Discover Personal Loans

Amount: personal loans between $2,500 and $35,000

Credit score needed: you need to have an excellent credit score of at least 720

Interest rate: The APR they offer is between 5.99% and 24.99%

Repayment period: you’ll have between three and seven years to repay it.

Type of loan: Unsecured personal loans.

Other information: There is also a minimum household income of $40,000 for this personal loan.

#CaminoTip
You could also approach credit unions in your area to see if they offer personal loans for debt consolidation.

Credit Card Debt Loans

Camino Financial Microloans: the best unsecured debt consolidation loans

If you have business credit card debt, our microloans are your best option.

Amount: We offer between $5,000 and $75,000

Credit score needed: You can apply even if you have no previous credit history.

Interest rate: Fixed annual interest rate between 25.5% and 40%.

Repayment period: The repayment terms are between 24 and 36 months.

Type of loan: Unsecured.

Funding time: You can get your loan funds in just 2 days.

Other information: You can consolidate credit card debt with one of our loans, and after 8 timely payments, you can access even more capital with better terms.

Consolidate your debt

#DidYouKnow
Pros and Cons of Microloans for Small Businesses

Payoff

Amount: The loan amount offered is between $5000 and $40,000.

Credit score needed: You’ll need at least a 600 credit score to qualify.

Interest rate: APR between 5.99% and 24.99%. 

Repayment period: You’ll have 2 to 5 years to pay them back.

Type of loan: Unsecured.

Other information: To get their personal loans for debt consolidation, you’ll need at least $1,000 in free cash flow, a credit history of at least three years, and at least two open accounts on your credit report.

Lightstream

Amount: Between $5,000 and $100,000.

Credit score needed: You’ll need a minimum credit score of 660 for these loans.

Interest rate: The APR ranges between 4.49% and 20.49%.

Repayment period: You’ll have 2 to 7 years to pay them back.

Type of loan: Unsecured.

Other information: The loan requires a strong payment history and enough income to pay existing debts and the new loan. 

#DidYouKnow
If you have credit card debt, you can use balance transfer credit cards instead of personal loans.

Balance Transfer Credit Cards

You might also be able to qualify for a credit card balance transfer. These cards typically have an introductory period of 0% interest. 

This could be great for debt consolidation, but only if you pay the balance off within that period. If you don’t, the issuer will charge you very high interest.

Wells Fargo Reflect Card

Credit score needed: You’ll need good credit to qualify for this card. 

Interest rate: 0% APR for all balance transfers that lasts for 21 months after opening your account. Then, the variable APR ranges between 12.99% and 24.99%.

Balance transfer fee: There is a balance transfer fee of 3% of the amount you’re transferring.

Type of credit card: Unsecured.

Other information: This credit card has no annual fee.

U.S. Bank Visa Platinum Card

Credit score needed: To qualify, you must have good to excellent credit. 

Interest rate: This credit card offers a 0% intro APR for balance transfers that lasts 20 billing cycles. If you don’t pay off the balance before the introductory period, the variable APR you’ll pay ranges from 14.74% to 24.74%.

Balance transfer fee: 3% of the balance.

Type of credit card: Unsecured.

Business Loans

Camino Financial Small Business Loans: the best loan for debt consolidation

Our small business loans have minimal requirements and a completely paperless application.

Amount: Between $5,000 and $400,000

Credit score needed: No previous credit history required.

Interest rate: The annual interest rate ranges from 21.07% to 47.78%.

Repayment period:  You’ll have 24 to 60 months to repay the loan.

Type of loan: Unsecured.

Funding time: You can get your loan proceeds as fast as 2 days.

Other information: You’ll need a minimum annual income of at least $30,000 with at least 9 months in business. We offer flexible repayment options, so our credit score isn’t affected. Also, we don’t have a prepayment penalty if you want to pay off your loan early.

Get Approved For A Loan Today

 

Funding Circle

Amount: The maximum amount is $500,000

Credit score needed: You’ll need a minimum credit score of 660 to qualify for this loan.

Interest rate: The APR ranges from 12.18% to 36%.

Repayment period: You’ll have up to 7 years to pay it back.

Type of loan: Unsecured.

Other information: There isn’t a minimum annual revenue requirement, but you have to be in business for at least two years. 

Credibility Capital

Amount: Up to $500,000. 

Credit score needed: The minimum required credit score is 650.

Interest rate: The APR ranges from 6.99% to 24.99%. 

Type of loan: Unsecured.

Other information: You’ll have to be in business for at least two years and have minimum annual revenue of $200,000. 

SBA 7(a) Loans: the best debt consolidation loans for good credit

Amount: The amount of the loan must be at least 10% less than the existing loans you’re consolidating, and

Credit score needed: You’ll need to have good or excellent credit to qualify for these loans. 

Interest rate: interest rates that range from 5.5% to 9.25%.

Repayment period: The term length is between 10 and 25 years

Type of loan: Unsecured.

Other information: The Small Business Administration offers 7(a) loans that you could use to consolidate debt. The SBA will verify eligibility and guarantee part of the loan that you’ll get through a private lender. You have to submit in writing why you need the loan.

OnDeck Capital

Amount: This private lender offers short-term loans of as much as $250,000.

Credit score needed: at least 600

Interest rate: Their APRs start very high, though, at 35.1%, and you’ll either pay daily or weekly.

Repayment period: The total term length is between 3 and 18 months.

Type of loan: Unsecured.

Other information: You have to have an annual revenue of at least $100,000 for your business. This short-term loan could be suitable for debt consolidation if you’re desperate for cash.

How Do I Choose The Best Debt Consolidation Lender?

With so many options, it can be tough to choose the best debt consolidation loans. Follow these tips to find the lender that fits your needs.

Make sure to check out all the details of the loans and the lenders that are offering them.

Weigh all the lenders available to you, including their customer reviews, the company’s reputation, and their options for customer support. These are all crucial aspects of your loan that won’t appear on the actual terms.

Finally, look at the details of the specific loans they’re offering. They should offer straightforward terms, with interest rates that are agreeable to you and options for repayment that make it easy.

Make sure to compare APRs, fees, and features.

The best debt consolidation loans will ultimately save you money and not take advantage of your situation. 

#CaminoTip
Before applying, make sure you meet the loan’s requirements.

Whenever possible, see if you can prequalify for various loans. This will help you compare true apples to apples with lenders. 

Once you review the specific loan terms for all lenders, you’ll be able to decide what’s the best option.

Through this process, you should search for all fees that apply to your loan. For example, some lenders may charge a surcharge for monthly payments, an origination fee, or an early payoff fee. These would all increase the total cost of the loan.

Finally, see what restrictions the lender may have on the loan, including what you could use the money for.

How To Qualify For A Debt Consolidation Loan

One of the most important aspects of qualifying for a debt consolidation loan is building and maintaining a good credit score. So, make sure to pay all of your bills on time, and don’t take out too much debt if you can avoid it. 

Even the best debt consolidation loans for bad credit will often charge much higher interest rates and offer less favorable terms.best debt consolidation loans for bad credit

If your credit score isn’t high enough, you could also consider getting a co-signer if the lender allows you to do that. Of course, that person would need to sign onto the loan as well, but you’d get more favorable terms.

It’s also vital that you research different debt consolidation loans.

Not every loan is a fit for every person, so make sure to shop around and find the best rates and the best lenders for you.

Camino Financial has minimal requirements

How To Prepare For A Debt Consolidation Loan

Getting a debt consolidation loan can be the best solution for your problems, but it takes some work to make sure that it’s beneficial in the long term.

First, plan ahead by creating a budget that helps you avoid racking up large amounts of debt in the future. This will help you stay on track.

Part of this budgeting is to curb the amount you are spending and set aside money for savings if you can.

Also, make sure that you’re committing to keeping your debt low for the long term. You don’t want to find yourself back in this same situation in the future.

Pros And Cons Of Debt Consolidation

There are some advantages and disadvantages of debt consolidation.

Advantages

  • The main advantage is the ability to simplify the repayment process. Going from multiple outstanding accounts to one makes it easier to understand and manage your debt.
  • You can also save a lot of money through debt consolidation, making it easier to repay your debt

Disadvantages

  • One of the biggest cons is the threat of you taking on more debt. You have to stay disciplined to make sure that you actually close those older accounts when you pay them off with a debt consolidation loan. 
  • If, for example, you don’t close a credit card that you paid off with the consolidation loan, it can be tempting just to rack up new debt on that credit card. This could result in a much worse financial situation than you were already in before the loan.
  • Sometimes, these loans can have long repayment periods with high-interest rates. If this is the case, it wouldn’t be worth it to take a debt consolidation loan. 

Why Consolidate Your Debt

There are many reasons why you might want to consolidate your debt. 

Pay Off Debt Sooner

Combining your debt down into one loan could make it easier to pay off all your debt quicker.

This is especially true if you’re consolidating revolving debt (such as credit cards) into a loan with a fixed term that has a definitive end date.

Lower Interest Rates

A debt consolidation loan could also offer you significant savings in terms of interest.

If you have multiple outstanding loans with high-interest rates that you combine into one with lower interests, you could save a significant amount of money in interest payments alone.

Fewer Payments

When you consolidate your debt, you’re simplifying your finances. In addition, it’s much easier to handle your overall finances when you have one payment versus multiple monthly payments to make.

It’s easier to plan and budget if you have fewer things to worry about.

This could also help you make additional payments to your loan, which could pay it off sooner.

Stable Payments

Loans with variable interest rates come with variable payments from month to month. So if the interests change, your payment could go up (or down) from one month to the next.

A debt consolidation loan would offer you stable and consistent payments.

Improve Your Credit Score

You can improve your credit score by paying off loans.

#CaminoTip
Ask your lender if they report your payments to the credit bureaus.

Alternatives To Debt Consolidation Loans

If you want to consolidate your debt, there are other options you can take. 

401(k) Loan

If you have built up some retirement savings, you might be able to take a loan.

The nice part about these loans is that whatever interest you pay on them, you’re actually paying to yourself—since the money will go back into your retirement account. 

The downside, of course, is that you’ll be taking money out of your retirement account and not allowing it to grow.

Home Equity Loan

This would allow you to get a loan with a fixed repayment period at a relatively low-interest rate—which could be great for debt consolidation. 

The downside here is that you’ll be tapping into your home’s equity and would be risking your home if you can’t repay the loan.

Credit Counseling

Credit counseling companies help you develop a DMP (debt management plan), which can provide you with a blueprint for how you can pay off and then better manage your debt. 

Some may even help you lower your interest rates by negotiating with your creditors on your behalf. 

These services usually come with a fee.

#DidYouKnow
Most credit couseling companies are non-profit organizations.

Debt Relief Services

With this alternative, a company will reach out to your creditor to attempt to get you lower monthly payments or settle the amount you owe for a smaller amount. 

These debt settlement companies will charge a fee for their services, but it could be an option if you don’t qualify for a debt consolidation loan.

Get Out Of Debt With The Best Loans For Consolidating Debt

If you find yourself having financial trouble, the best debt consolidation loans could benefit you. They simplify your repayment process and allow you to save money with lower, fixed interest rates.

There are times when you might need a small business loan to help you in your financial situation. 

When that time comes, Camino Financial is here for you.

We have some of the best loan products that you can use for debt consolidation. 

Using our financial products for this purpose can help you get out of debt faster and—more importantly—potentially save you a lot of money as you’re paying down your debt.

We work hard every day to live up to our motto of “No Business Left Behind.” We do this through our great loan products and by offering educational resources to all of our customers. 

Request a quote for an installment loan today so you can start saving money and pay down your debt.

Apply now!

 

FAQs

What is debt consolidation?

Debt consolidation is the process of taking outstanding balances from multiple accounts and combining them into one account. This could save you money with lower interest rates and simplify the repayment process.

What are the average debt consolidation loan rates?

Debt consolidation loans can start as low as 11% but go as high as 40%.

In most cases, if you have a decent credit score, your interest rate could be between 15% and 20%.

How do high-interest rates affect my debt?

The higher your interest rate, the more money a loan will cost you.

For example, a 20% interest rate on $1,000 in debt equals $200. A 5% interest rate on that same $1,000 in debt equates to $50. That’s a big difference when repaying loans.

What are the risks of a debt consolidation loan?

The main risk of a debt consolidation loan is not closing the previous accounts you paid off with the proceeds. If you don’t close those accounts, it can be easy to just add to your debt rather than paying it off.

How much can I save with debt consolidation?

Depending on how much outstanding debt you have, you could save hundreds or even thousands of dollars with debt consolidation. Of course, how much you save will depend on your interest rate and the total amount you’re borrowing.

How does debt consolidation affect my monthly payments?

Instead of making multiple payments to multiple accounts, you’ll be making just one payment to your debt consolidation loan. Not only that, but this combined single payment could be less than the multiple accounts combined.

How do you qualify for a debt consolidation loan?

Like all other loans, you’ll need to apply with a lender that offers a debt consolidation loan.

The better your financial situation, the more likely you are to qualify, and the better loan terms you’ll qualify for.

Will a debt consolidation loan hurt my credit score?

The best debt consolidation loans will help you build a credit score in the long run. That’s because you’ll be paying off multiple debt accounts and, eventually, paying off this debt consolidation loan, too.

Is a debt consolidation loan a good idea?

A debt consolidation loan can be a good idea, especially if you have multiple outstanding debt accounts. It’s especially beneficial if those other accounts have high variable interest rates.

 

Check if you
qualify for a loan

LEARN MORE