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In unpredictable times like these, flexibility is key, especially when it comes to borrowing money for the things we need most. In a pinch, personal loans<\/a> can be used to cover any number of things, whether it’s wedding expenses, surprise medical bills, major home repairs or funeral costs.<\/p>\n Debt consolidation<\/a> can be an especially strategic way to use them, too, since the process allows borrowers to better organize their debts and typically involves a lender sending funds to creditors on your behalf. Consolidating debt through a personal loan also lets borrowers receive a lower interest rate while they pay back the loan, resulting in significant money being saved over the life of the loan.<\/p>\n A recent study by LendingTree <\/a>indicated that between the third quarter of 2021 and the third quarter of 2022, personal loan inquiries in general had risen by 12.3%, while inquiries for personal loans to use for debt consolidation<\/a> had increased by 29.1% during that period of time.<\/p>\n The report pointed to increasing annual percentage rates, or APRs, coinciding with interest rate hikes by the Federal Reserve<\/a> as the major reason behind the recent spikes.<\/p>\n Below, Select<\/a> details what you can do if you’re interested in taking out a personal loan for the purpose of debt consolidation.<\/p>\n<\/div>\n Subscribe to the Select Newsletter!<\/strong><\/p>\n Our best selections in your inbox. Shopping recommendations that help upgrade your life, delivered weekly.\u00a0Sign up here<\/a>.<\/p>\n<\/div>\n<\/div>\n Before applying for a personal loan, you’ll want to double-check your credit score. While there are several lenders, such as Upstart<\/a> and OneMain Financial<\/a>, that will still consider borrowers with low credit scores<\/a> or an insufficient credit history<\/a>, you might end up having to pay a higher interest rate \u2014\u00a0those with higher credit scores, however, will typically have to pay a lower interest rate.<\/p>\n<\/div>\n Debt consolidation, credit card refinancing, wedding, moving or medical<\/p>\n<\/div>\n<\/li>\n FICO or Vantage score of 600 (but will accept applicants whose credit history is so insufficient they don’t have a credit score)<\/p>\n<\/div>\n<\/li>\n 0% to 8% of the target amount<\/p>\n<\/div>\n<\/li>\n The greater of 5% of monthly past\u00a0due amount or $15<\/p>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/section>\n Debt consolidation, major expenses, emergency costs<\/p>\n<\/div>\n<\/li>\n Flat fee starting at $25 to $onem00 or percentage ranging from 1% to 10% (depends on your state)<\/p>\n<\/div>\n<\/li>\n Up to $30 per late payment or up to 15% (depends on your state)<\/p>\n<\/div>\n<\/li>\n<\/ul>\n Click here<\/a>\u00a0to see if you prequalify for a personal loan offer. Terms apply.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n Next, you’ll want to figure out how much money you actually need to borrow. If you’re consolidating debt, simply add up all your balances to find a total.<\/p>\n While the smallest personal loan amounts<\/a> \u2014\u00a0from a lender such as\u00a0PenFed Credit Union<\/a>, for instance \u2014 tend to begin around $600, minimum amounts closer to the $1,000 mark are often more common. Be careful not to apply for more than you need since you’ll have to pay all the money back eventually.<\/p>\n<\/div>\n Debt consolidation, home improvement, medical expenses, auto financing and more<\/p>\n<\/div>\n<\/li>\n Then, you’ll want to do your homework by researching and comparing the rates, fees and terms<\/a> of different personal loan providers. Some lenders will allow you to check your rate without hurting your credit score before you even apply.<\/p>\n Ideally, you’ll want to go with a lender that offers a low interest rate with no fees (or the fewest fees) and a term length that best fits your budget. LightStream<\/a> and SoFi<\/a> are each known for offering personal loans with no origination fees, late fees or early payoff fees.<\/p>\n<\/div>\n 5.99% to 23.99%* when you sign up for autopay<\/p>\n<\/div>\n<\/li>\n Debt consolidation, home improvement, auto financing, medical expenses, wedding and others<\/p>\n<\/div>\n<\/li>\n 7.99% to 23.43% when you sign up for autopay<\/p>\n<\/div>\n<\/li>\n Debt consolidation\/refinancing, home improvement, relocation assistance or medical expenses<\/p>\n<\/div>\n<\/li>\n When you decide which lender you want to go with, submit your application and wait for approval, which can take anywhere from one to a few days. After that, just wait for the funds to be paid.<\/p>\n With debt consolidation, lenders will typically disburse the money directly to as many as 10 of your chosen creditors \u2014 you’ll just need to provide their information and how much money each one should be sent. That way, you’ll just be on the hook for paying back your personal loan lender.<\/p>\n Get matched with personal loan offers.<\/strong><\/a><\/p>\n<\/div>\n<\/div>\n If you’ve noticed the APR on your debts rising as interest rates have kept creeping up, consolidating your debt can be a smart and strategic way to lower it while also organizing the money you owe into one monthly payment.<\/p>\n Before you apply for a debt consolidation loan, make sure your credit score is as healthy as possible, as this is the key to helping you get approved for the lowest interest rates available.<\/p>\n Catch up on Select’s in-depth coverage of\u00a0<\/strong><\/em>personal finance<\/strong><\/em><\/a>,\u00a0<\/strong><\/em>tech and tools<\/strong><\/em><\/a>,\u00a0<\/strong><\/em>wellness<\/strong><\/em><\/a>\u00a0and more, and follow us on\u00a0<\/strong><\/em>Facebook<\/strong><\/em><\/a>,\u00a0<\/strong><\/em>Instagram<\/strong><\/em><\/a>\u00a0and\u00a0<\/strong><\/em>Twitter<\/strong><\/em><\/a>\u00a0to stay up to date.<\/strong><\/em><\/p>\n<\/div>\n Editorial Note:<\/strong> Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff\u2019s alone, and have not been reviewed, approved or otherwise endorsed by any third party.<\/p>\n<\/div>\nHow to apply for a personal loan<\/h2>\n
Upstart Personal Loans<\/a><\/h3>\n
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OneMain Financial Personal Loans<\/a><\/h3>\n
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PenFed Personal Loans<\/a><\/h3>\n
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LightStream Personal Loans<\/a><\/h3>\n
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SoFi Personal Loans<\/a><\/h3>\n
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Bottom line<\/h2>\n