Debt Consolidation Loans: Best Companies and Strategies 2025
Debt consolidation can simplify your finances and potentially lower your interest rates. Learn how to combine multiple debts into one manageable payment.
Best Debt Consolidation Loans 2025
| Lender | APR Range | Loan Amount | Term |
|---|---|---|---|
| SoFi | 8.99% - 25.81% | $5K - $100K | 2-7 years |
| Marcus by Goldman Sachs | 7.99% - 24.99% | $3.5K - $40K | 3-6 years |
| Discover | 7.99% - 24.99% | $2.5K - $40K | 3-7 years |
| Payoff | 7.99% - 29.99% | $5K - $40K | 2-5 years |
How Debt Consolidation Works
- Take out new loan to pay off multiple debts
- Single monthly payment instead of many
- Ideally lower interest rate
- Fixed payoff date
Benefits of Debt Consolidation
- Simplified payments
- Lower interest rate potential
- Fixed repayment schedule
- May improve credit score
- Pay off debt faster
Risks to Consider
- May pay more over time if term is longer
- Requires discipline to not rack up new debt
- Upfront fees and costs
- Collateral risk for secured loans
Debt Consolidation Alternatives
- Balance Transfer Cards: 0% APR for 12-21 months
- Debt Management Plan: Credit counseling agency
- Home Equity Loan: Lower rates but home at risk
- 401(k) Loan: Pay yourself interest but risky
When Debt Consolidation Makes Sense
- You have multiple high-interest debts
- You can qualify for lower rate
- You are committed to not taking new debt
- You have stable income
