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How to Apply for a Loan to Consolidate Debt in 5 Easy Steps

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How to Get a Consolidation Loan for Debt in just 5 steps
The steps to get a debt consolidation loan include reviewing your credit score before comparing different options, then applying for the loan.


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The last update was on January 10, 2023

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Steps



Steps





A will consolidate several high-interest debts into one payment. It will also help you pay off debt faster.
Here's how to get a debt consolidation loan in five steps.
1. Verify your credit score

Begin by examining the credit scores of your. Borrowers with good to excellent credit scores (690 to 890 credit score) are more likely to be approved and receive a lower interest rate for the consolidation loan.
The ideal consolidation loan should have a lower than the total interest rate on the other debts. A lower rate reduces the overall amount of debt you have and can assist you in getting rid of debt faster.
If you have a bad credit score (300 to 629 credit score) and need some time to get it, you may be eligible for a loan with a lower rate loan. Here's how:
Make sure you catch up on late payments. In the event of a late payment, credit agencies will report it at thirty days after the due date. This can drop your credit score by 100 points or more. If you're within the 30 day window for a debt payment, you have time to submit it.
Check for credit report errors. Incorrect information that appear on your credit reports, like payments that are applied to incorrect debts or accounts incorrectly labeled as closed, can hurt your credit score. Check your credit reports for free at AnnualCreditReport.com and dispute any mistakes you find.
Repay small debts. The amount of debt owed is 30 percent of the credit score. If you can, pay down any credit cards with high interest prior to deciding to merge. This can help you lower your interest , which can help you obtain a lower rate for your consolidation loan.

>> COMPARE:
2. Write down your outstanding debts and your payments.

Write down the debts you want to consolidate -- credit cards and store credit cards, payday loans and other high-interest loans. Then add up the amount due. The debt consolidation loan amount to cover the entire amount due on these loans.
Add the amount you make each month to your debts. Also, review your financial plan for spending adjustments required to keep up the repayments. The new loan will likely be lower in cost and a monthly installment that fits within your budget. Make a commitment to a repayment plan with your budget in mind.
Check if it is logical to combine.
3. Compare loan options

Look for a loan that is suitable for your needs. Credit unions, online lenders and banks all offer personal loans to help consolidate debt.
We cater to borrowers of various credit levels. Many online lenders allow you to pre-qualify, so you can assess your own rates and terms without affecting your credit score.
These are not-for-profit institutions that could offer lower rates for borrowers with fair or bad credit. It is necessary to join in order to get the loan, and some credit unions may require a when you apply, which can temporarily hurt you credit scores.
They are best suited to applicants with excellent or good credit. Customers with an existing banking relationship may have an easier process of qualifying and could receive advantages such as discounts on rates or access to higher loan amounts.

Search for lenders who provide direct payment to creditors, which eases the consolidation process. Once the loan is completed the lender transfers the loan profits to the creditors without additional cost.
You should also consider other benefits that lenders offer, like a rate discount for setting up autopay, access to your credit score or financial education that is free.
>> MORE:
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LendingClub
5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account the factors we believe to be beneficial to consumers, such as impact to credit score, rates and fees as well as the customer's experience and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula is based on factors we consider to be a good choice for consumers, such as the impact on credit scores rate and fees, customer service and ethical lending practices.


APR 8.3-36.0%


Loan amount $1,000 - $40,000





on LendingClub





on Happy Money



Happy Money
4.5 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score rates and fees, customer experience and ethical lending practices.



4.5 NerdWallet's ratings are compiled by our editorial staff. The scoring formula considers factors we consider to be a good choice for consumers, such as the impact on credit score rate and fees, customer experience and responsible lending practices.


APR 7.99-29.99%


The loan amount is $5,000 to $40,000





on Happy Money





on PenFed Credit Union



PenFed Credit Union
5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula is based on factors we consider to be consumer-friendly, including impact to credit score, fees and rates, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration aspects we consider to be beneficial to consumers, including impact on credit score, rates and fees as well as the customer's experience and ethical lending practices.


APR 7.74-17.99%


Amount of loan $600-$50,000





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on Upgrade



Upgrade
5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula is based on the factors we believe to be consumer-friendly, including impact to credit score, fees and rates, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula is based on the factors we believe to be consumer-friendly, including impact on credit score, rates and fees customers' experience, and ethical lending practices.


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Loan amount $1,000 - $50,000





On Upgrading





on Upstart



Upstart
4.5 NerdWallet's ratings are compiled by our editorial staff. The scoring formula takes into account aspects we believe are beneficial to the consumer, including impact on credit score, fees and rates customers' experience, and ethical lending practices.



4.5 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account aspects we believe are friendly to consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.


APR 6.5-35.99 percent


The amount of the loan is $1,000.





on Upstart





on LightStream



LightStream
5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration the factors we believe to be friendly to consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring formula takes into account the factors we believe to be beneficial to the consumer, including impact on credit score, rates and fees customers' experience, and ethical lending practices.


APR Rates quoted are with AutoPay. 6.99-23.99%


Amount of loan: $5,000 - $100,000





on LightStream











on LightStream



LightStream
5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration aspects we consider to be consumer-friendly, including impact to credit score, rates and fees as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including impact to credit score, fees and rates as well as the customer's experience and ethical lending practices.


APR Rates quoted are with AutoPay. 6.99-23.99%


Amount of loan: $5,000 - $100,000





on LightStream





on Axos



Axos
4.0 NerdWallet's ratings are determined through our team of editors. The scoring formula takes into account factors we consider to be a good choice for consumers, such as impact to credit score rate and fees, customer experience and responsible lending practices.



4.0 NerdWallet's rating is determined by the editorial staff. The scoring formula is based on aspects we consider to be a good choice for consumers, such as the impact on credit score, fees and rates, customer experience and ethical lending practices.


APR 7.99-14.99%


The loan amount is $5,000 to $50,000.





on Axos





on the Upgrade



Upgrade
5.0 NerdWallet's rating is determined by our editorial team. The scoring formula is based on the factors we believe to be consumer-friendly, including impact to credit score, fees and rates as well as the customer's experience and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial team. The scoring algorithm takes into consideration the factors we believe to be consumer-friendly, including impact to credit score, rates and fees, customer experience and ethical lending practices.


APR 8.49-35.97%


The amount of the loan is $1,000.





On Upgrading





on SoFi



SoFi
5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula takes into account aspects we believe are consumer-friendly, including impact to credit score, rates and fees as well as the customer's experience and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including impact to credit score, rates and fees customers' experience, and ethical lending practices.


APR 7.99-23.43%


Loan amount $5,000 - $100,000





on SoFi





on Best Egg



Best Egg!
4.5 NerdWallet's ratings were determined by our editorial staff. The scoring formula considers factors we consider to be beneficial to the consumer, including the impact on credit score, fees and rates, customer experience and responsible lending practices.



4.5 NerdWallet's ratings are compiled by our editorial staff. The scoring algorithm takes into consideration aspects we believe are friendly to consumers, such as the impact on credit score, rates and fees as well as the customer's experience and ethical lending practices.


APR 8.99-35.99%


Loan amount $2,000 - $50,000





on Best Egg





On Achieving



Attain
5.0 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be beneficial to consumers, including impact on credit score, rates and fees customers' experience, and ethical lending practices.



5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account aspects we believe are beneficial to the consumer, including impact on credit score, rates and fees, customer experience and responsible lending practices.


APR 7.99-29.99%


The loan amount is $5,000 to $50,000.





On Achieving











on OneMain Financial



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4.0 NerdWallet's rating is determined by our editorial team. The scoring formula takes into account factors we consider to be consumer-friendly, including the impact on credit score, fees and rates, customer experience and ethical lending practices.



4.0 NerdWallet's rating is determined through our team of editors. The scoring algorithm takes into consideration the factors we believe to be consumer-friendly, including impact to credit score, rates and fees, the customer experience and ethical lending practices.


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Loan amount $1,500 - $20,000





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Upstart
4.5 NerdWallet's ratings are determined by our editorial staff. The scoring formula considers factors we consider to be friendly to consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



4.5 NerdWallet's ratings were determined by our editorial staff. The scoring algorithm takes into consideration aspects we consider to be a good choice for consumers, such as impact to credit score rate and fees, customer experience and ethical lending practices.


APR 6.5-35.99 Percent


Loan amount $1,000 - $50,000





on Upstart





on the Best Egg



Best Egg
4.5 NerdWallet's ratings are compiled by our editorial team. The scoring formula considers factors we consider to be consumer-friendly, including the impact on credit scores rate and fees, customer experience and ethical lending practices.



4.5 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account the factors we believe to be beneficial to consumers, including the impact on credit score rates and fees, customer experience and ethical lending practices.


APR 8.99-35.99%


Amount of loan $2,000 - $50,000





on the Best Egg





on Discover



Discover
5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula is based on aspects we consider to be consumer-friendly, including impact on credit score, fees and rates customers' experience, and responsible lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring algorithm takes into consideration the factors we believe to be beneficial to the consumer, including impact on credit score, fees and rates customers' experience, and ethical lending practices.


APR 6.99-24.99%


Loan amount $2,500 - $35,000





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on Achieving



Achieve
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula takes into account the factors we believe to be consumer-friendly, including impact to credit score, rates and fees customers' experience, and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account aspects we believe are friendly to consumers, such as the impact on credit score, fees and rates, customer experience and ethical lending practices.


APR 7.99-29.99%


Loan amount $5,000 - $50,000





On Achieving





on SoFi



SoFi
5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula takes into account aspects we believe are consumer-friendly, including impact to credit score, fees and rates, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula is based on aspects we consider to be beneficial to consumers, including impact to credit score, rates and fees customers' experience, and ethical lending practices.


APR 7.99-23.43%


Loan amount $5,000 - $100,000





on SoFi











on Universal Credit



Universal Credit
4.5 NerdWallet's ratings were determined by our editorial staff. The scoring algorithm takes into consideration the factors we believe to be consumer-friendly, including impact to credit score, fees and rates customers' experience, and ethical lending practices.



4.5 NerdWallet's ratings are determined by our editorial team. The scoring formula considers the factors we believe to be consumer-friendly, including the impact on credit scores rate and fees, customer service and ethical lending practices.


APR 11.69-35.93%


The amount of the loan is $1,000.





on Universal Credit





on Discover



Discover
5.0 NerdWallet's ratings are compiled by our editorial team. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including impact to credit score, fees and rates, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account factors we consider to be a good choice for consumers, such as the impact on credit scores, rates and fees, customer service and responsible lending practices.


APR 6.99-24.99%


Loan amount $2,500 - $35,000





on Discover





on Upstart



Upstart
4.5 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration aspects we believe are friendly to consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



4.5 NerdWallet's ratings were determined by our editorial team. The scoring formula takes into account factors we consider to be friendly to consumers, such as the impact on credit score, rates and fees customers' experience, and responsible lending practices.


APR 6.5-35.99 Percent


The amount of the loan is $1,000.





on Upstart





On Achieving



Attain
5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula is based on aspects we consider to be beneficial to consumers, including the impact on credit score, fees and rates, customer experience and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial team. The scoring formula takes into account factors we consider to be a good choice for consumers, such as impact to credit score rate and fees customers' experience, and responsible lending practices.


APR 7.99-29.99%


Amount of loan: $5,000 - $50,000





on Achieve





on SoFi



SoFi
5.0 NerdWallet's rating is determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be a good choice for consumers, such as impact to credit score, rates and fees, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial staff. The scoring formula is based on factors we consider to be beneficial to the consumer, such as impact on credit score, fees and rates, customer experience and ethical lending practices.


APR 7.99-23.43%


Amount of loan: $5,000 - $100,000





on SoFi





on the Best Egg



Best Egg
4.5 NerdWallet's ratings were determined by our editorial staff. The scoring algorithm takes into consideration the factors we believe to be a good choice for consumers, such as the impact on credit score, rates and fees as well as the customer's experience and responsible lending practices.



4.5 NerdWallet's ratings are compiled by our editorial team. The scoring formula considers the factors we believe to be friendly to consumers, such as the impact on credit score, rates and fees customers' experience, and responsible lending practices.


APR 8.99-35.99%


Amount of loan $2,000 - $50,000





on Best Egg











on LightStream



LightStream
5.0 NerdWallet's ratings are determined by our editorial staff. The scoring formula is based on aspects we believe are consumer-friendly, including impact to credit score, fees and rates, customer experience and ethical lending practices.



5.0 NerdWallet's rating is determined by our editorial staff. The scoring algorithm takes into consideration aspects we believe are consumer-friendly, including impact to credit score, fees and rates as well as the customer's experience and responsible lending practices.


APR Rates quoted are with AutoPay. 6.99-23.99%


Loan amount $5,000 - $100,000





on LightStream





on SoFi



SoFi
5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account aspects we believe are beneficial to the consumer, including the impact on credit score, fees and rates, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account aspects we consider to be a good choice for consumers, such as impact to credit score, rates and fees, customer experience and ethical lending practices.


APR 7.99-23.43%


Amount of loan: $5,000 - $100,000





on SoFi





on Universal Credit



Universal Credit
4.5 NerdWallet's ratings were determined by our editorial team. The scoring formula considers the factors we believe to be a good choice for consumers, such as the impact on credit score, fees and rates customers' experience, and ethical lending practices.



4.5 NerdWallet's ratings are compiled by our editorial team. The scoring formula takes into account the factors we believe to be friendly to consumers, such as the impact on credit score, fees and rates, customer experience and responsible lending practices.


APR 11.69-35.93%


Amount of loan: $1,000 - $50,000





on Universal Credit





on LendingClub



LendingClub
5.0 NerdWallet's ratings are compiled by our editorial team. The scoring formula is based on factors we consider to be consumer-friendly, including impact on credit score, fees and rates, customer experience and responsible lending practices.



5.0 NerdWallet's ratings are determined by our editorial team. The scoring algorithm takes into consideration the factors we believe to be consumer-friendly, including the impact on credit scores rate and fees, customer service and responsible lending practices.


APR 8.3-36.0%


The amount of the loan is $1,000.





on LendingClub





on Upstart



Upstart
4.5 NerdWallet's ratings are determined by our editorial staff. The scoring formula considers the factors we believe to be beneficial to consumers, including impact on credit score, fees and rates as well as the customer's experience and ethical lending practices.



4.5 NerdWallet's ratings are determined by our editorial staff. The scoring algorithm takes into consideration factors we consider to be consumer-friendly, including impact to credit score, rates and fees customers' experience, and ethical lending practices.


APR 6.5-35.99%


The amount of the loan is $1,000.





on Upstart


















Do you want to consolidate debt? See if you pre-qualify for an consolidation loan.
Answer a few simple questions to receive a personalized report of our loan partners.


Loan amount
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4. You can apply for a loan

When you're ready to collect documents like evidence of identity, proof of address and income verification.
Spend the time to study your loan document's fine print. Find any that could affect the amount of the loan and verify that the lender reports on-time repayments to all three main credit bureaus. This could help build your credit.
If you aren't meeting the lender's requirements, consider including a credit score of good credit in your request. This could help you qualify for a loan that you wouldn't qualify for by yourself.
>> COMPARE:
5. The loan and make payments

Once you've located and were approved for the loan you want, there's one important step left.
If the lender offers direct payment, they will split your loan proceeds to your creditors, and pay off the old loans. Check your accounts for the absence of a balance or contact every creditor to make sure the accounts are paid off.
If the lender fails to pay you, the debt will be repaid by transferring the funds into your account at the bank. Take action immediately to avoid paying additional interest on your old debts and reduce the temptation to use the loan money on other things.
Then, within 30 days after receiving the debt consolidation loan then pay your first installment.
>> MORE:


Authors' Bios Steve Nicastro is a former NerdWallet expert on personal loans and small-business loans. His work has been featured in The New York Times and MarketWatch.


Jackie Veling covers personal loans for NerdWallet.







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