Skip to main content

Best debt consolidation companies 2021: A single loan to cover multiple debt repayments

Best debt consolidation companies 2021
(Image credit: Pixabay)

The best debt consolidation companies will be where to turn if you’re struggling with mounting debt – they’ll take your current credit commitments and combine them into a single loan, streamlining things to get your finances under control. Not only that, but these loans will ideally come with a lower interest rate than your previous arrangements, which can reduce your repayments and overall debt burden in the process. 

The rates and terms offered will always be more favorable if you’ve got a decent credit rating, with lenders viewing you as lower risk and able to offer better terms accordingly. Yet with debt consolidation loans for bad credit always available, those with a more potted history needn’t miss out – the rates may be higher, but there’ll still be options that can make your debt more manageable. That said, working on your credit score in advance would never go amiss, either by fixing it on your own or seeking the best credit repair services, thereby giving you the best possible chance of securing low-rate loans. 

Yet whether you’re seeking debt consolidation loans for bad credit or want access to options with the best possible terms, you’ll need to know where to look, which is where we can help. The following list showcases the very best debt consolidation companies that can cater to a range of requirements, from the company known for dealing with high amounts of debt to the one with the best service rating, as well as highlighting the very best company overall.

Any one of the options listed could offer a viable solution to your debt problems, but if you find it isn’t enough, it may be time to seek alternatives. Debt settlement could be your next step – find out more about debt settlement vs. debt consolidation – or consider debt counseling if you think you could benefit from additional support. 

1. National Debt Relief: Best Debt Consolidation Company overall

National Debt Relief: Best debt consolidation company overall

(Image credit: National Debt Relief)

National Debt Relief

Straightforward and reliable service for those with smaller debts


Application : Online initially, then a callback | Minimum credit score: 680 | Loan amount: $2,000 - $35,000 | Loan term : 24 - 60 months

Reasons to Buy

Outstanding customer ratings
No initial impact on credit score
Dedicated US support team

Reasons to Avoid

$35,000 loan limit

National Debt Relief has been offering debt relief since 2008, establishing itself as both our favored debt consolidation and debt settlement company in that time. The debt consolidation service is simple and straightforward, and ideally suited to those with smaller debts that they want to clear for good. However, making National Debt Relief really stand out is the avalanche of overwhelmingly positive customer ratings that it consistently receives from those who have used the service and seen their debt problems alleviated as a result.  

Loan amounts can range from $2,000 to $35,000, payments can be made over a term of between 24 and 60 months, and the pre-qualification process for your debt consolidation loan won’t affect your credit score either. On the downside, the loan terms specific to you won't be found on the website - you'll need to speak to someone to get started and see how National Debt Relief can help you. But with the debt consolidation loans and service on offer from National Debt Relief both outstanding, you're unlikely to regret picking up the phone. 

2. Discover: Best Debt Consolidation Company for service

Discover: Best debt consolidation company for service

(Image credit: Discover Bank)

Discover Debt Consolidation

A lender that appears to be on your side


Application: Online, phone or mail | Minimum credit score: 680 | Loan amount: $2,500 - $35,000 | Loan term: 36 - 84 months

Reasons to Buy

Easy to apply
Wide range of features
Excellent service

Reasons to Avoid

Low maximum loan amount 

Discover provides an easy to use and well-considered debt consolidation solution, but it is an outstanding commitment to customer support that sees it rank as the best debt consolidation company for service overall. 

The application process is straightforward, your account can be managed online and over the phone, charges are kept to a minimum, and you can check on the rate that Discover will offer you without affecting your credit score. As already mentioned, the supporting resources are excellent too, and in the 30-day money-back guarantee, you have the option to cancel your loan if you find a cheaper rate elsewhere. There's also an option to have Discover manage the payments that must be made to your creditors, which should lower stress levels.  

If you have larger debts, the maximum loan amount of $35,000 might not suffice, while a decent credit score is required to secure a low rate. However, if what you want is a straightforward debt consolidation service, and a lender who appears to have your interests at heart, Discover should definitely be one of your first picks. 

3. Marcus by Goldman Sachs: Best Debt Consolidation Company for those with good credit

Marcus by Goldman Sachs: Best debt consolidation company for those with good credit

(Image credit: Goldman Sachs)

Marcus by Goldman Sachs

A great choice if your credit score is up to scratch


Application: Online and over the phone | Minimum credit score: 660 for best rates | Loan amount: $3,500 - $40,000 | Loan term: 36 - 72 months

Reasons to Buy

Low rates for most creditworthy
Online application and approval
Can send payments direct to creditors

Reasons to Avoid

Rates likely to be high for those with bad credit

Marcus by Goldman Sachs should be one of the first debt consolidation companies on the list of those possessing a decent credit score. However, Marcus has so much more to offer too, including an eligibility checker, a smooth application process, and the absence of any fees. 

There are some useful stress-relieving and time-saving features on offer as well, such as the free Direct Payment option that means funds will be sent directly to up to 10 credit card companies, so you don't have to. While everything can be managed online, there is the option to call for help if you so wish, and with the FAQs a little hidden away, you might need that additional support. 

If you have debts in excess of $40,000, you'll also need to look elsewhere, but fit in with the criteria that Marcus caters to - and in particular, if you have a better than average credit score - then a good all-round debt consolidation experience should await. 

4. InCharge: Best Debt Consolidation Company for financial education

InCharge: Best debt consolidation company for financial education

(Image credit: InCharge Debt Solutions)


A non-profit that wants to help people get out of debt and stay out of debt


Application: Online or over the phone | Minimum credit score: No minimum requirements | Loan amount: Not specified | Loan term: 3 - 5 years

Reasons to Buy

No minimum credit score
Credit counseling service
Unrivaled resources

Reasons to Avoid

Setup fee and a monthly service charge

InCharge is so much more than your typical debt consolidation company, and what really stands out is the effort that it puts in to make sure those that extricate themselves from debt do not quickly find themselves back in it.  A credit counseling service and a whole host of educational initiatives are on offer at InCharge with the aim of getting people to manage their debt more responsibly.  

The debt consolidation proposition is slightly different from the norm too. By enrolling in the debt consolidation program, you agree to make one monthly payment to InCharge, which is distributed to creditors, but a new loan is not taken out. Instead, the counselors work with credit card companies to try and negotiate lower interest rates. The aim is to get people debt free within three to five years, and the absence of any credit score requirements (because you are not taking out a loan) means it is an option that is open to all as well. 

While InCharge is a non-profit organization, the service attracts a setup fee and a monthly charge, which should be weighed up against the potential interest savings that you might make. However, if the sums add up, and you want a supportive and informative path to better managing your debt, InCharge is the option you should seek.

5. Prosper: Best Debt Consolidation Company for those with bad credit

Prosper: Best debt consolidation company for those with bad credit

(Image credit: Prosper)


A welcome openness alongside a straightforward online approach


Application: Online or over the phone | Minimum credit score: 640 | Loan amount: $2,000 - $40,000 | Loan term: Choice of 36 or 60 months

Reasons to Buy

Quick and easy online process
Transparent criteria and fees 

Reasons to Avoid

Relatively high charges
Limited loan term options 

Prosper was a pioneer in the peer-to-peer sector and is now a solid performer as a debt consolidation company. At the core of Prosper's approach is an accessible online platform and a willingness to be upfront with borrowers over how they can qualify for a debt consolidation loan and what it will cost. 

In that regard, you will likely need a decent credit score to get a good rate, but there is a handy eligibility checker to find out whether you are likely to succeed - and on what terms - that doesn't impact your credit rating. It is admirable that Prosper are open about their fees too, as cheaper loan options are likely to be available elsewhere, particularly if you are prone to missing a payment. 

The peer-to-peer aspect means there could be a longer than average wait for the loan funds to arrive in your account too, but then it is an approach that can provide the opportunity of lower rates as well. That joint applications are allowed will also be a welcome option for some, but it is the transparency that Prosper offers that makes it a debt consolidation company that should not be ignored.  

6. Avant: Best Debt Consolidation Company for overpayments

Avant: Best debt consolidation company for overpayments

(Image credit: Avant)


The ideal choice for low credit scores and repaying early


Application: Online and over the phone | Minimum credit score: 600 | Loan amount: $2,000 - $35,000 | Loan term: 24 - 60 months

Reasons to Buy

Easy application online
Low credit score requirements
Not penalized for repaying early

Reasons to Avoid

Better APRs and fees available elsewhere

Avant ranks among the best debt consolidation companies mainly due to a willingness to listen to those with below par credit scores and the fee-free ability to pay your loan off early. On top this, Avant offers an extremely accessible online platform, the option to check your loan eligibility without affecting your credit score, and the potential for funds to be in your account the day after your loan is approved. 

Perhaps unsurprisingly, given Avant will consider poorer credit scores, the lowest APR on offer of 9.95% is higher than the cheapest options available elsewhere. In addition, there is an administration fee that could be as high as 4.75% to be factored into any calculations too.

That said, if you want a reliable online debt consolidation loan, need your funds fast, and have perhaps had little luck when applying elsewhere, Avant still offers plenty that will please.

7. LightStream: Best Debt Consolidation Company for flexible terms

LightStream: Best debt consolidation company for flexible terms

(Image credit: LightStream)


Offering high loans over long terms, flexibility is key


Application : Online only | Minimum credit score: "Good" score | Loan amount: $5,000 - $100,000 | Loan term: 24 - 84 months

Reasons to Buy

High loans, long terms
Potential for same day funding

Reasons to Avoid

Need a decent credit score
No soft pull inquiry

LightStream will be a great choice if you're happy online and want the maximum amount of flexibility in respect of your debt consolidation loan options. In welcoming those with debts of up to $100,000, and offering payment terms of up to seven years, the needs of all borrowers should be met.

As everything must be completed online, it is good to know that the application process is quick and easy - for those not so comfortable on screen, be aware that there is no phone to ring. The relatively high credit score requirements for a LightStream loan might also be exclude some, while the absence of a soft pull credit inquiry before you apply is unusual for an online lender too. 

However, there are no fees, the chance of receiving your funds on the same day that you apply, and there is a rate guarantee too, where LightStream promises to beat a rate offered by a rival under the same terms by 0.1%. Add in the widest possible loan terms that you can get, and LightStream offers an excellent debt consolidation option.  

8. Wells Fargo: Best Debt Consolidation Company for high amounts of debt

Wells Fargo: Best debt consolidation company for high amounts of debt

(Image credit: Wells Fargo)

Wells Fargo

The top choice for high debts and the human touch


Application: New customers in-branch; existing online or phone | Minimum credit score: 620 | Loan amount: $3,000 - $100,000 | Loan term: 12 - 84 months

Reasons to Buy

Large loans available
In-branch support
Discounts for current customers

Reasons to Avoid

No pre-approval option

Wells Fargo is the well-known bank that should have a debt consolidation solution for most. Few lenders can match the $100,000 loans that it offers, while payment terms can stretch over as long as seven years. There is also an option for joint applications, rate discounts for those who are already customers of the bank, and no fees. 

While new customers will need to take a trip to a Wells Fargo branch to get started, the chance of a face-to-face consultation and advice is sure to appeal to many who prefer a more personal experience when it comes to their finances than is usually available through online-only lenders. That said, Wells Fargo still has an impressive online offering up its sleeve too, allowing customers to manage their accounts without leaving home and providing a wide range of guidance and support via articles, videos and calculators. There's an option that will see Wells Fargo pay your creditors direct too. 

The need to actually apply for a loan in order to find out whether you will actually qualify for one could put some people off, but all-in-all, Wells Fargo offers a compelling debt consolidation solution from one of the most experienced banking names.

9. Lending Club: Best Debt Consolidation Company for online applications

Lending Club: Best debt consolidation company for online applications

(Image credit: LendingClub)


A peer-to-peer lender that can consolidate your debt online


Application: Online and over the phone | Minimum credit score: Relatively strict | Loan amount: $1,000 - $40,000 | Loan term: Choice of 36 or 60 months |

Reasons to Buy

Easy to use online platform
Great customer service

Reasons to Avoid

Low maximum loan amount
Choice of only two terms

LendingClub is a peer-to-peer lender that wants to deliver creative credit solutions, and with its debt consolidation approach, it tends to deliver. 

A commitment to make the process of applying for a debt consolidation loan as straightforward and stress-free as possible is certainly met. It is possible to complete everything swiftly online, or you can phone if you prefer a friendly voice. Managing your account from there on in is simple too, while there is heaps of information available across the website, both in terms of the loan itself and wider guidance on debt and finance. 

Relatively stringent lending criteria might mean some people struggle to secure a loan with LendingClub, although this is countered by the ability to make joint applications, an option that could improve your chances or lead to a better rate. If you have larger debts or want a number of loan terms from which to choose, LendingClub might disappoint, while there is an origination fee to take into account, and a longer than usual turnaround time for funds too.  

That said, if you possess a decent credit score, and want a slick online debt consolidation solution, LendingClub could still appeal. 

10. Payoff: Best Debt Consolidation Company for credit card debt

Payoff: Best debt consolidation company for credit card debt

(Image credit: Payoff)


Welcome transparency and warm words of encouragement


Application: Online and over the phone | Minimum credit score: 640 | Loan amount: $5,000 - $35,000 | Loan term: 24 - 60 months

Reasons to Buy

Upfront over fees and eligibility 
Exceptional support services

Reasons to Avoid

Only available for credit card debt
High origination fee 

Payoff is the debt consolidation company that seems to have your best interests at heart. Focusing purely on credit card debt, Payoff wants to help people get their finances back on track, and then make sure they don't veer off the road again. Psychologists and scientists are both on Payoff's payroll as part of the effort to promote healthier financial habits among its customers. 

As to the actual consolidation of debt itself, the application process is straightforward and there's a soft inquiry 'Check my rate' option to ascertain your eligibility before you apply proper. Unsurprisingly, there is support readily at hand both online and over the phone should it be required. 

The origination fee, which could be as high as 5%, might deter some, and higher loan amounts and swifter turnaround times are probably available elsewhere, but Payoff is transparent in everything that it does. For some people, they might also be willing to pay slightly over the odds or wait a little longer for their funds simply to try and gain from the extra support that Payoff has to offer. Welcome calls and regular check-ins are all part of a debt consolidation service that takes a proactive approach to helping its customers. 

Debt consolidation loans: What are the risks?

While most debt consolidation companies offer unsecured loans, which don't require any collateral in order to apply, some also offer secured loans, against which you will need to promise something to the lender - usually your home - as security. This is incredibly risky because if you cannot meet your payments, your home is on the line. Furthermore, if you have bad credit, debt consolidation loans may come with high interest rates.

In addition to putting your home at risk, it is possible that a debt consolidation loan will end up prolonging someone's debt. While having one low rate and one payment is an attractive option, it has to be done right and payments need to be kept up to date to avoid slipping into a similar, or even worse, financial situation in the future.

Best debt consolidation companies: What to look for

When choosing from the best debt consolidation companies, it is important to find a lender that’s reliable and compliant with FTC regulations. Avoid going with a company that fails to disclose all the legally required information before encouraging you to enroll.

Accreditations are another key indicator of whether a company adheres to ethical standards. The accreditations listed below are through private agencies, not the government. However, these entities are recognized as authorities in the industry and have missions to promote ethical debt management practices.

The American Fair Credit Council (AFCC), formerly known as the TASC, advocates for consumers. To be AFCC accredited, a company must be fully compliant with FTC regulations and undergo an annual renewal process.

The International Association of Professional Debt Arbitrators (IAPDA) offers certifications and exercises for debt specialists. The employees at companies that are IAPDA certified have been professionally trained in debt management best practices and upholding ethical standards.

The United States Organizations for Bankruptcy Alternatives (USOBA) has rigorous standards that go beyond FTC regulations, and debt consolidation companies must adhere to them to be certified.

Lastly, look closely at the supplemental resources a company offers. While any company can provide negotiation or consolidation services, the best ones provide solutions for managing your finances and staying out of debt. Any company that appears to be looking for repeat customers should be avoided.

Debt consolidation and transparency

How forthcoming a lender is with information should be a huge factor when choosing a debt consolidation company. Before you sign anything, make sure you understand the company’s history. Due to the New Rule, there are things a company legally must disclose before you enroll in its program. These include educated estimates of the potential length of your program, the cost of your program, your rights as a consumer, and the fact that you are still responsible for your debts and may receive collection calls.

Companies legally cannot charge upfront fees for services and must provide an upfront estimate of how long your program will take. Also, they should never put pressure on you to disclose personal information, such as your bank information, before you enroll in their program.

Finally, debt consolidation companies cannot promise to stop collection calls. Collection agencies are within their legal rights to contact you. While your debt consolidation company may attempt to reduce the number of calls you receive, they might not stop, especially if you stop making your payments to your creditors as part of the program.

What is credit counseling & how can it help?

Depending on the amount or type of debt you have, you might be referred to a credit counselor. Most of the debt consolidation companies we reviewed refer you to a credit counseling firm if you have around $7,500 or less in unsecured debt, such as credit cards and personal loans.

Credit counseling usually entails two things. The first is a call with a certified counselor. During this call, you go over your expenses, income and savings, and they help you create a budget. They can also point you to resources for getting credit reports. Credit counselors can also recommend ways to manage your debt – for example through bankruptcy, debt settlement or debt management plans managed by the credit counseling agency.

If credit counseling sounds like something that could help you, check out the National Foundation for Credit Counseling’s list of accredited organizations.

Can you consolidate medical debt?

With medical costs rising, more and more Americans are incurring debt to pay their bills. The average household spends more than $4,600 a year on medical care. According to the CFPB, one in five credit reports has a late medical bill that has been sent to collections. Like all debt, medical debt can be consolidated in a variety of ways.

One way to consolidate or eliminate your medical debt is to negotiate with your creditor. Medical bills often contain errors, so when you get one, review it to make sure it's accurate. If something is wrong, contact your insurance company and the provider’s billing department to get it corrected. You can also apply for financial hardship, especially at a hospital, which can help reduce the amount you pay.

Common ways of consolidating consumer debt also apply to medical debt. You can get a 0% balance transfer card, a personal loan or a home equity loan. All of these depend in part on you having good credit, which may not be the case if you’ve missed any payments on your medical debt. However, if you’re still making payments and have good credit but want some flexibility and relief, these may be good options.

Working with a debt settlement company is another option. You’ll stop making payments on your bill and instead put the money into a fund the settlement company will use to negotiate with your creditors. This option can damage your credit since you don’t make payments while the negotiations proceed.

Are balance transfer cards a good option?

If you’ve got multiple credit cards, personal loans or student loans and worry about struggling with the payments, consolidating the balances onto a single card may be a good option to help you better manage those payments.

With a balance transfer card, you’ll move your existing balances onto just one card. This doesn’t pay them off, it just moves them to one card with one interest rate. Typically these cards offer introductory APRs of 0% for several months; this is a good way to get a leg up on your payments and avoid getting hit with additional interest.

When looking for a good balance transfer card, keep your eyes out for a few things. First, there may be a fee to transfer your balance. This can be between 3% and 5% of your existing balance. So if you transfer $10,000, you’ll pay between $300 and $500. This is less than the fee you’d pay with a debt settlement company, who typically charge between 15% and 25% on debt they settle. Some balance transfer cards don’t have transfer fees, so keep an eye out for those.

Another thing to keep in mind is that some cards will only let you transfer a certain percentage of that card’s credit limit. You’ll also need to factor fees into that amount. So if you have a balance transfer card with a limit of  $10,000, but you are only allowed to transfer 75% of the limit, you’ll only be able to transfer $7,500. And that could leave you with a remaining balance on one of your other accounts.

Typically, you’ll need a high credit score to be eligible for a balance transfer card. Applying for one will result in a hard inquiry, which will affect your score. Generally, if you’ve fallen behind on your current payments, you may need to look for other avenues for debt reduction, since you’ll likely not be eligible for a balance transfer card.

Student loan consolidation

Student loans are one of the most common types of debt in the U.S., with the average student owing around $37,000, and typical monthly payments around $330. Though the federal government is the biggest lender, private lenders account for around 20 percent of the total student loan volume. If student loan debt becomes hard to manage, refinancing and consolidation are two ways to make payments more manageable.

How you consolidate your debt depends on if you have federal loans, private loans or a combination of both. If you only have federal loans, you can apply for consolidation through the Department of Education. Consolidating your federal student loans is similar to consolidating other loans. You won’t get a lower rate, though you can convert variable rate loans to a fixed rate. The primary benefit of consolidating your federal loans is they are combined into a single package and you have just one monthly payment. You can also get a new term, often up to 30 years. The rate for your consolidated loan is the average of your loans’ current rates, rounded to the nearest eighth of a percent.

If you have private loans or a combination of private and federal loans, you can apply to consolidate them through another lender. There are stricter application requirements. For example, you need to have a source of income and good credit – if not, you may need to find a co-signer. When you consolidate your loans through a private lender, you can typically get a lower rate and longer term.

However, private consolidation has some drawbacks. Because it has more requirements, especially regarding your credit, it can be difficult to get approved. And if you are approved, you may not get the best rate. Terms are also shorter, typically 20 years as opposed to 30 years for a federal consolidation. In addition, you waive some fringe benefits – for example, forbearance in case you lose your job.

Can you use your home’s equity to consolidate debt?

If you’ve owned your home for a while and have built up substantial equity, you may be able to tap into that equity as a way to consolidate the medical and credit card debt you’re struggling with. Getting a home equity loan has some advantages over other methods of debt consolidation.

With a home equity loan, you tap into the equity you’ve built up over the years of paying off your mortgage. Home equity loans typically have much lower rates than debt consolidation loans or balance transfer credit cards. And even if you don’t qualify for the best rates, by combining multiple interest-charging accounts into one loan, you’ll still save money.

Another advantage of a home equity loan is lenders typically have less strenuous credit requirements for approval. With a debt consolidation loan, you need a score of around 720 to get a good rate, and a score lower than 680 makes approval unlikely. You can get a home equity loan with a score of around 620, and your credit score contributes less to the decision than for other loans. Lenders also look at your debt-to-income ratio and other aspects of your financial history.

However, there are some disadvantages of getting a home equity loan and using it for debt consolidation. For example, the process for getting one can be time consuming – you need to get an appraisal and go through an underwriting process similar to the one for your first mortgage. This can take upward of a month in some cases. Typically, a debt consolidation or personal loan has a shorter approval process.

With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors.