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Rising Incomes Outpace Increasing Housing Costs in Every Major American City

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Most U.S. workers’ real wages have been stagnant over the past four decades, according to analysis from the Pew Research Center. With the prices of crucial expenses such as housing and healthcare increasing over these decades as well, consumers’ purchasing power today is about the same as in the 1970s. These circumstances have contributed to the belief that overall, Americans’ incomes aren’t keeping up with the rising costs of living.We set out to analyze U.S. Census Bureau data for America’s 100 largest metros to compare incomes to housing costs. Our findings show that this trend might be reversing — at least for residents of America’s biggest cities.

Compared to three years ago, the typical household in these cities has more money left over after paying for housing. In other words, even though housing costs have risen over the last three years, the dollar amount of wages have grown faster and exceeded the dollar pricing increases for both renting and owning a home.

In fact, famously-expensive metros saw the biggest jumps in the gap between income and housing costs. This trend also holds in places where rents take a greater share of household income.

Key findings

  • The median household in each of the 100 largest metros takes home more cash after paying for housing than they did three years ago.
  • Households in San Francisco saw the biggest gain in gross income after housing costs, up $10,642 more per year compared to three years previous. For renters, the amount is $9,982, and for homeowners with a mortgage the amount is $12,178.
  • Annual savings at the other end of the list are still substantial. The median household in Albuquerque, N.M. has an extra $1,750 a year — $1,438 for renters and $2,194 for homeowners with a mortgage.
  • Rent costs are increasing at a faster rate than costs for households who own their own homes and still have a mortgage in every metro. Even so, wage growth has outstripped those increases.
  • The 2017 homeownership costs in most metros exceeds the 30% marker that is traditionally used as a guideline for affordable housing costs. This suggests that homeownership is still not affordable for most households in those metros.
  • In a few places, the percentage of a household’s income spent on rent has increased — such as in Denver; Colorado Spring, Colo.; and San Jose, Calif. Even so, these households still take home more dollars after paying rent than they did three years ago.
  • The effect is especially pronounced in famously expensive cities; the first seven metros on our list, from San Francisco to Boston, are notorious for high rent costs.
  • Median housing costs have actually dropped in a handful of cities, such as Atlanta (down by $24 per year), Birmingham, Ala. ($24), Chicago ($24), Cleveland ($84), Detroit ($144), Jacksonville, Fla. ($36) and Las Vegas ($216).
  • Rents have risen at a faster rate than homeownership costs, but median costs for the latter are still higher across the board. As a result, homeowners today have more funds leftover after paying their mortgages and property expenses, even though they are spending a greater percentage of their incomes on housing.
  • Median rents in every metro lie comfortably below the 30% mark of median gross income, but homeownership costs exceed the 30% rule in most places.

Our study compared local incomes to housing costs in the top 100 metros. We then ranked them based on how much local wages have increased compared to housing costs, dollar for dollar, with the highest increase starting at 1 (in green on the map above) and going to the lowest at 100 (in red).

Hover over the map to see the ranking of each city and how much incomes after housing costs have increased in the past three years.

10 cities where incomes are rising faster than housing costs

When income rises faster than housing costs, our study found, this puts thousands more dollars per year into people’s pockets.

With these extra funds, households might find they have more funds available to cover other living expenses, from groceries to utilities to healthcare. This money can ease the demands placed on households by consumer debt such as credit cards, auto loans or personal loans. It could even grant them more room in their budgets to save, get out of debt or invest.

Here, we highlight the 10 cities in which the gap between median incomes and housing costs is growing the fastest.

1. San Francisco

San Francisco has become notorious in the past decade for its soaring housing costs, but it appears that local incomes are finally catching up. This city had the highest increase in local incomes left over after housing costs — for both renters and homeowners.

Overall, San Franciscans have $10,642 more in gross income after paying for housing than they did three years ago. That translates to a gain of $9,982 for renters, and $12,178 for homeowners.

Despite these high dollar amount increases, the percentage of the median gross income required to cover the median rent has remained mostly unchanged, falling just 0.2%. By contrast, San Francisco had the steepest decline in the percentage of a local median income required to cover homeownership costs — down 12.3% from three years ago.

2. San Jose, California

Neighboring San Francisco is San Jose, the next city where residents saw the largest increases in incomes overall, rising $12,849 in the past three years. This increase helped typical workers pocket $9,909 more in gross annual income after paying housing costs, compared to three years previous.

Rent costs rose faster than home owning costs over those years, too. Renters’ after-housing income rose $9,117 in the past three years, compared to $11,913 more for homeowners.

Despite having one of the largest increases dollar-for-dollar, however, San Jose’s numbers are less impressive when comparing housing costs directly to income. The percentage of the city’s median gross income required to cover median housing costs fell by just 0.8% in the past three years — the smallest decrease of any city we surveyed.

3. Seattle

In Seattle, the median gross income increased by $8,300 per year in just three years. Local workers’ paychecks increased far faster than their housing costs, which were up $1,164 during the same period — resulting in a net gain of $7,136 overall.

During the three years we looked at, Seattle homeownership costs decreased by 10.3% relative to income while rent costs were up 2.6% compared to incomes. The three-year increase in income after housing costs was $6,272 for renters, and $8,180 for homeowners. In actual dollars, this meant homeowners netted $1,908 more per year from rising incomes than their renting neighbors.

4. Austin, Texas

At No. 4 is Austin, where the amount of a median gross income left over after paying median housing costs increased by $6,737 per year. This number specific to renters is $6,125, and homeowners are taking home $7,025 more after housing costs per year.

This is thanks again to rising local incomes, which shot up $7,817 from 2014 to 2017 while median housing costs increased by just $1,080.

Overall, the percentage of a gross median income required to cover Austin’s median housing costs fell by 4.5% over those three years.

5. Portland, Oregon

Portland is No. 5 among cities where incomes have increased the most compared to housing costs in over the past three years. This net gain in dollars is $6,733, reflecting median incomes that increases $7,825 per year compared to a rise of just $1,092 in annual housing costs.

Homeowners in Portland saw the biggest gains; the percentage of the median income required to cover the costs of owning a home fell by 11.2%. In dollars, homeowners here had an average of $7,693 more of their gross income leftover after covering housing costs than three years previous. For renters, this figure is $6,025.

Notably, Portland ranked No. 7 out of 50 in our rankings of the places where Americans live the most balanced lifestyles.

6. Denver

Next is the Mile High City, Denver, where increases in income outstripped the rise in housing costs to grant locals an average of $6,418 more in annual income, after housing costs. This is based on the $7,678 rise in Denver’s median income in the past three years, which outsrippted the $1,260 rise in housing costs during the same period.

Rising rent costs, however, have countered some of the income gains for Denver residents. For workers earning the local median income, the percentage of their pay that would be devoted to rent costs actually rose by 7.7% over three years — the steepest increase of any city we surveyed. Compare that to a 3.1% fall in costs-to-income for homeowners.

7. Boston

Another high cost-of-living city makes the list with Boston. Fortunately, the median annual income was up $7,344 from 2014 to 2017, helping to make up for some of the city’s high costs. Housing costs rose $1,008 per year during the same period.

In all, a typical Bostonian has $6,336 more in gross income leftover after paying for housing, compared to three years ago. This same figure is $5,952 for renters, specifically, and $7,128 for homeowners.

8. Bridgeport, Connecticut

In the city of Bridgeport, slower-rising housing costs are also contributing to a widening gap between housing costs and incomes. Here, annual housing costs are just $432 higher than they were three years ago — the smallest increase in housing costs among the top 10 cities.

That means that more of the $6,610 increase in incomes from 2014 to 2017 will make its way into Bridgeport resident’s pockets being eaten up by housing costs.

In all, the three-year increase in incomes after accounting for housing costs is $6,178 .This number is actually higher for local homeowners, at $7,018, and lower for renters,$5,266.

9. Nashville, Tennessee

Nashville locals have $5,984 more in gross income after paying housing costs today than they did three years ago. Housing costs rose $576 during that time, while incomes were up $6,560.

While this isn’t the highest dollar amount, it reflects a drop of 6.7 percentage points in the ratio of housing costs to income. In other words, Nashville is the top 10 city where locals who saw the biggest increase in the percentage of their income they get to keep rather than pay toward housing.

10. Salt Lake City

Rounding out the list is Salt Lake City, which ranked in the top cities to live out your golden years. Despite a boom in housing costs in the past 15 years, wages in this Utah city have also increased. From 2014 to 2017, the median household income rose $6,309, exceeding the $456 rise in housing costs for a total gain of $5,853 for Salt Lake City locals.

In all, Salt Lake City residents are still coming out ahead, with more money leftover after paying for housing compared to three years previous.

Understanding the metrics

Comparing data from the American Community Survey for 2017 to 2014, analysts subtracted the change in median household income from the change in median housing costs (annualized) to determine the three-year change in gross income left over after paying for housing.

In addition, we also calculated the change in the percentage of income a median household would spend on median housing costs, and then we repeated the exercise for median rents and median costs for homeowners who have mortgages. In all, this generated the following findings for each city:

  • 3-Year change in gross income left over after housing costs (annual)
  • 3-Year change in gross income left over after rent (annual)
  • 3-Year change in gross income left over after homeownership costs, including mortgage (annual)
  • 3-Year change in the percentage of the median gross income required for median housing costs
  • 3-Year change in the percentage of the median gross income required for median rent
  • 3-Year change in the percentage of the median gross income required for median homeownership costs, including mortgage

Scroll to the end of this piece for a table that includes these full study findings for each city.

The median housing cost estimate is inclusive of every household within a Metropolitan Statistical Areas, which may include a city and surrounding communities. The rent estimate is limited to people who pay rent, and we limited the homeownership costs (which includes costs such as taxes and insurance) to those with a mortgage. We excluded homeowners without a mortgage, as their housing costs are likely to stay close to flat and wouldn’t reflect area changes in housing costs.

In several instances, we found that a higher proportion of median income was required to pay the median rent in 2017 than it was in 2014. Even in these cases, the median households brought home more money after paying rent.

Conventional wisdom says that households should spend no more than 30% of their gross income on housing costs. In every metro we reviewed, the ratio of median income required to pay median rent fall comfortably below this line. Yet rents were more likely to have increased on pace with wages, meaning renters saw smaller gains in after-housing income than homeowners.

The ratio of housing costs to income homeowners, however, exceeds that limit in most metros, implying that homeownership is still not affordable for the typical household. Together, these findings suggest that while homeowners’ housing costs rise more slowly than renters’, they must use a large chunk of income to cover those costs than do renters.

Full rankings

Below is a table with the full findings for all 100 cities in our study. After the column listing the city, the leftmost three columns shows the change, in dollars, of gross income left after paying for housing costs. The rightmost three columns show the change in the percentage of the median income needed to pay for the median housing costs in that city.

Methodology

Researchers compared 2017 and 2014 median household income, as well as 2017 and 2014 median housing costs, median gross rent, and median housing costs for homeowners with a mortgage.  The results were aggregated to the 100 largest municipal statistical areas, and the data is from the American Community Survey 5-Year estimates from the U.S. Census.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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No Credit, or Poor Credit? Here Are Your Loan Options

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Mixed Race Young Female Agonizing Over Financial Calculations in Her Kitchen.

Updated May 01, 2019
Don’t have a credit history established, or have a low credit score? It can be challenging to find lenders that will approve you if you have a thin credit file or poor credit, but it’s not impossible.

You still have options when it comes to personal loans, and these options come from reputable lenders.

What’s even better is that these lenders will only conduct a soft credit inquiry when you apply to find out what rates they can offer you. This means your credit score won’t be negatively affected, so you don’t have to worry about damaging it further.

In this article we’ll review how to find reputable lenders, why you should stay away from two popular options people turn to when they’re in a poor credit situation: payday and title loans. And what you can do to increase your credit score.

Check for approval without a credit hit

It’s worth noting low scores aren’t always indicative of how responsible you are with credit. A low score, or thin file, could just be a result of a short credit history. If you have a clean history (no late payments, low credit utilization, etc.), you’ll have an easier time obtaining a loan over someone who has had delinquencies on their record, but might have a higher score.

If you have bad (or no) credit, you should apply to as many lenders as possible that use a soft pull to ensure you don’t hurt your credit score. We recommend starting with LendingTree, where you can use one short application form to get rates from multiple lenders at one.

Company
APR
Terms
Credit Req.
LendingTree

As low as 3.99%

24 to 60

months

Minimum 500 FICO®

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A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

6.95%-35.89%

36 or 60

months

600

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7.69%-35.99%

36 & 60

months

620

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9.95%-35.99%

24 to 60

months

Varies

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Avant branded credit products are issued by WebBank, member FDIC.

6.95%-35.99%

36 or 60

months

640

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For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

59.00%-199.00%

9 to 24

months

Varies

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LendingTree: Dozens of lenders partner with LendingTree – and many of them may approve people with poor or no credit. You can fill out a simple form and compare multiple offers in minutes. We highly recommend starting your shopping experience here first to have a good chance of getting a loan.

LendingTree
APR

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Credit Req.

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months

Origination Fee

Varies

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A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

Here are 5 personal loan lenders for people who have less than ideal credit (meaning under 700) that will let you check your rate without impacting your credit score:

LendingClub: People with credit scores below 600 may get approved. You can borrow $1,000 – $40,000 and get the money deposited into your account within a few days. Fixed APRs range from 6.95% –35.89% on monthly terms of 36 or 60. LendingClub has an origination fee of 1.00% - 6.00% its loans. LendingClub is not available in Iowa or West Virginia.

APR

6.95%
To
35.89%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

SEE OFFERS Secured

on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.... Read More

Upstart: Borrow between $1,000 and $50,000 for 36 & 60 months with APRs ranging from 7.69% to 35.99%. While the minimum credit score needed to qualify is 620 (Upstart will also consider applicants who don’t have a score), you must have a clean credit history. You could also be eligible for next day funding.

APR

7.69%
To
35.99%

Credit Req.

620

Minimum Credit Score

Terms

36 & 60

months

Origination Fee

0.00% - 8.00%

SEE OFFERS Secured

on LendingTree’s secure website

Upstart is an online lender created by ex-Googlers.... Read More

Avant: You could borrow anywhere from $2,000 to $35,000 through Avant, and you could receive your funds as soon as the next business day. APRs range from 9.95% – 35.99%. Although the minimum credit score Varies, you have a much better chance if your score is above 580. Avant is available in all states except Colorado, Iowa, West Virginia, and Vermont.

APR

9.95%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Up to 4.75%

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

Avant is an online lender that offers personal loans ranging from $2,000 to $35,000. ... Read More

Prosper: Another peer-to-peer marketplace lender, Prosper’s loans are similar to LendingClub’s. You can borrow $2,000 to $40,000 with APRs ranging from 6.95% to 35.99% on 36 or 60 month terms. There’s an origination fee of 2.41% - 5.00%, and its minimum credit score is 640.

APR

6.95%
To
35.99%

Credit Req.

640

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

2.41% - 5.00%

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

Prosper is a peer-to-peer lending platform that offers a quick and convenient way to get personal loans with fixed and low interest rates. ... Read More


For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

OppLoans: If you have no or bad credit, Opploans is an online lender that could help. If your credit score is below 0 (or if you have no credit score at all), OppLoans will work with you. You can check to see if you are approved without impacting your score. And – unlike payday lenders – OppLoans offers much more affordable borrowing options. They also have great reviews – with a customer service rating of 4.9/5 stars.

APR

59.00%
To
199.00%

Credit Req.

Varies

Minimum Credit Score

Terms

9 to 24

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

There are several other personal loan lenders that will do a soft credit check. You can find them on our personal loan table here. While many of these lenders have minimum credit score requirements, you’ll find they take other factors into account aside from your FICO score.

Additionally, since these lenders only do a soft credit pull, you’re free to shop around for the best rates without fear of damaging your credit score.

Why You need to Stay Away from Payday Loans and Title Loans

Not eligible for personal loans? Don’t turn to payday loans or title loans.

If you’re not familiar with either, you might be wondering what’s so bad about them. After all, they seem convenient – most offer “fast cash,” and if you live in a populated area, you’ll probably find a payday loan or title loan shop nearby.

However, both require you to give something in exchange for funds, and neither require any sort of stringent approval process to ensure borrowers can afford the loans.

Payday Loans

Payday loan companies require you to write a check for the amount you wish to borrow, plus a set fee. The lender holds onto the check until the loan becomes due (typically on the borrower’s next payday, hence the name), and gives the borrower the money they need in the meantime.

The problem? If you can’t pay when the loan balance becomes due, you can choose to extend the term of the loan. When you do, you get hit with more fees. The APR on payday loans is extremely high, so you’ll pay more each time you extend your loan term.

Payday loans are on the smaller side – anywhere from $100 to $1,000. According to PayDayLoanInfo.org, the average term is two weeks, with 400%+ APRs. When you factor in fees, the APR can go up to 780%.

[Stuck in a Payday Loan Trap? Here are the ways out.]

Title Loans

Title loans require you to give your car’s title to the title loan company in exchange for an amount equal to the appraised value of your car. You usually have to own your car outright to be eligible for a title loan, and the term is around 30 days.

Like payday loans, if you can’t pay on time, you may choose to roll the loan over to the next month, incurring more fees. If you can’t pay back the loan at all, you run the risk of the lender repossessing your car.

As you can tell, both of these options are bad ideas if you want to stay clear of getting into a horrible debt cycle. These loans are purposely too expensive for borrowers to afford. If people are looking for quick cash because they don’t have any, it stands to reason they’ll be in the same situation a week or two from the time they borrow.

Non-Profit Credit Counseling to Rebuild Credit Score

You want to make every effort to improve your credit score, even after you’re approved for a loan, because having a good credit score will benefit you in other areas of life. For that reason, you might want to consider teaming up with a non-profit credit counseling service.

These companies can provide you with personalized advice on your specific situation so you can work on rebuilding your credit score. They can also work with your creditors and negotiate on your behalf to possibly lower interest rates or get better terms on your existing debt.

It can be tricky to find a reputable credit counseling agency – even with a non-profit organization. If you’re interested in a credit counseling service, USA.gov lists a few considerations and questions you should ask before committing. You want to make sure the credit counseling agency is actually going to help you get your credit and financial situation under control.

Alternative to Ways to Build Your Credit Score

If you don’t qualify for a personal loan, and don’t want to turn to payday or title loans, there are a few steps you can take to increase your credit score. This post has 6 tips to help get you started. These methods won’t boost your score immediately, but over time, you’ll see an improvement.

The Federal Trade Commission also has 6 alternatives to payday loans on its website, which might apply to your situation. For example, if you’re a member of a credit union, you could inquire about a loan through them as you have an established relationship already.

Also, if you haven’t started budgeting and tracking your spending, you should – doing so can help you spot problem areas with your money.

Read the Fine Print and Shop Around

Regardless of which loan you decide to apply for, always consider the cost. You want to make sure you’re getting the best possible terms, which means getting the lowest APR offered. Typically, cash advances and credit cards are going to have higher APRs than personal loans but lower than payday lenders.

Remember to always read the fine print. Loans of any type have plenty of fees associated with them that you should avoid. Shop around for the best deals and work on improving your credit score so better options become available to you.

*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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Best Debt Consolidation Loans by Credit Score in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

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Updated – May 1, 2019

Dealing with multiple loan payments can be a hassle. Even worse is having to pay high interest rates on one or more of your loans. A debt consolidation loan can be a great way to fix those problems by refinancing all your loans into one with a new rate and term.

Debt consolidation provides three benefits:

  1. Make payments simple: If you owe a lot of lenders and are having a tough time keeping track of all the payments, then consolidating will make your life easier. You’ll only owe one lender and have to keep track of one due date. There’s less of a chance of anything falling through the tracks.
  2. Lower your interest rate: This is where you have to run the numbers to see if debt consolidation makes sense for you. What’s the average interest rate you’re paying on your debt? If it’s quite high (which is likely if you have a lot of consumer debt), you may benefit from consolidating under better terms. Just remember to only use a personal loan if the interest rate is lower than the one you are already paying.
  3. Improve your credit score: If your credit cards are currently maxed out, your credit score will suffer. When you pay off your credit card debt with a personal loan, you will often receive a boost to your credit score, so long as you don’t start using your cards again.

But not all lenders will work with just anyone. Generally, you need to have a good credit score to qualify for the best interest rates on debt consolidation loans. Even then, some lenders offer better terms than others.

We searched through MagnifyMoney’s debt consolidation loan marketplace to identify the best lenders for you depending on whether you have excellent (700 and above), good (640-699), average (600-639) or poor (below 600) credit. To compare lenders evenly across the board, we assumed that you’re looking for a $10,000 loan and that you have a college degree. For each credit category, we picked the top two lenders who had the lowest APRs.

Here are the results from our analysis. If you’re in the market for a debt consolidation loan, it’s a good idea to customize your debt consolidation loan search so that you can find the best loan to help you get out of debt faster.

Company
APR
Terms
Credit Req.
LendingTree

As low as 3.99%

24 to 60

months

Minimum 500 FICO®

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Advertiser Disclosure.

Disclaimer

A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

3.99%-16.99%

24 to 144

months

660

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.

5.99%-29.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details.

7.16%-29.99%

36 or 60

months

640

SEE OFFERS Secured

on LendingTree’s secure website

Up to 29.99%

36 or 60

months

700

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

*The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99% - 5.99%. Any origination fee on a 5-year loan will be at least 4.99% and is deducted from loan proceeds. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may resulting an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. "Best Egg" is a trademark of Marlette Funding LLC. All uses of "Best Egg" on this site mean and shall refer to "the Best Egg personal loan" and/or "Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan," as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000.

Borrowers should refer to their loan agreement for specific terms and conditions. A loan example: a 5–year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3–year $5,000 loan with 5.99% APR has 36 scheduled monthly payments of $150.57. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank's policies.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

16.05%-35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. The lowest APR shown represents the 10% of loans with the most favorable APR. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes. Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.

Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Florida: $8,000. Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. Texas: $8,000. West Virginia: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
Peerform

5.99%-29.99%

36 or 60

months

600

SEE OFFERS Secured

on Peerform’s secure website

9.95%-35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

Tower Federal Credit Union

8.74%-11.74%

12 to 72

months

580

SEE OFFERS Secured

on Tower Federal Credit Union’s secure website

Personal Loans for Debt Consolidation

Start Shopping Here – LendingTree

At LendingTree, you can make dozens of personal loan companies compete for your business with a single online form. When you fill out the form, LendingTree will do a soft pull – which means your score will not be negatively impacted. Dozens of lenders will compete and you may be matched with lenders who want your business. You may be able to compare and save in just a few minutes. We recommend starting here. You can always apply directly to other lenders – but many of the lenders we recommend already participate in the LendingTree personal loan online tool.

LendingTree
APR

As low as 3.99%

Credit Req.

Minimum 500 FICO®

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Advertiser Disclosure

LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.


A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

Best debt consolidation loans for excellent credit

LightStream

APR

3.99%
To
16.99%

Credit Req.

660

Minimum Credit Score

Terms

24 to 144

months

Origination Fee

No origination fee

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

LightStream is the online lending division of SunTrust Bank.... Read More


Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.

What we like

If you’ve managed your credit well and have the credit score to prove it, LightStream can be a great option to consolidate your debt. It has some of the lowest interest rates out there — as low as 3.99% APR (that’s with a 0.50% auto-pay discount).

Going along with those low interest rates are low fees. LightStream doesn’t charge any fees at all, including origination fees or prepayment fees. The company offers loan terms from 24 to 144 months. While it’s generally best to pay off your debt as quickly as possible, sometimes having a longer-term loan makes sense, and many other lenders don’t offer loans for as long as 12 years.

The final thing we like about LightStream is that it’s quick to fund your loan. If you are approved for a loan on a business day before 2:30 p.m. Eastern time and provide the company with your bank account details, you can have your loan funded on the same day you are approved.

What could be better

If you’re trying to take advantage of the 0.50% auto-pay discount, you’ll need to set this up before your loan is funded. You won’t qualify for this interest rate discount if you do it after the fact.

Additionally, the company makes it a bit difficult if you’re trying to pay your loan off early. If you want any extra payments to go toward the principal (and not interest), you’ll have to schedule your extra payment to occur on the same day as your normal monthly payment. There’s no other way to specify that you want extra payments to go toward your principal balance.

Credit history required

LightStream doesn’t say what kind of credit history you need to qualify for a loan. But the company does describe those with excellent credit (and thus the best odds for approval at the lowest rates) as people with five or more years of credit history.

Fees and fine print

LightStream is a great option for folks who qualify for these loans because the company does not charge any fees at all. This means no origination fees or prepayment penalties. If you miss a payment, it’s not totally free because the company could report that to the credit bureaus, which could harm your credit score.

FreedomPlus

APR

5.99%
To
29.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

0.00% - 5.00%

SEE OFFERS Secured

on LendingTree’s secure website

With a personalized application process that includes a phone interview, FreedomPlus gives people with below average credit a shot at getting approved for a personal loan.... Read More

What we like

FreedomPlus also offers some of the lowest personal loan rates in our marketplace. Those rates are running as low as 5.99% APR.

Another thing we like about FreedomPlus is that it offers multiple different interest rate discounts. The lender doesn’t specify the amounts, but you can get discounts for three things:

  • If you have a co-applicant for your loan
  • If you use at least half of your loan to pay off high-interest credit card debt (FreedomPlus will pay it for you)
  • If you have at least $40,000 in retirement savings

These discounts may (or may not) make your interest rate better than what you could get with other lenders. But at least the company is rewarding customers for good financial behavior, such as paying off high-interest debt and saving for retirement.

What could be better

Unfortunately, FreedomPlus doesn’t operate in all states. Even in some of the states in which it does operate, there are state-specific minimums: $6,500 in Massachusetts, $5,500 in Ohio, $10,500 in Arizona and $3,500 in Georgia.

We also don’t like that FreedomPlus has a narrower range of terms than LightStream. You can only choose from a term length between 24 and 60 months.

Further, FreedomPlus doesn’t provide a lot of information on its website. Rather, the company directs you to contact it for more details. That could be inconvenient if you’re shopping lenders. It also puts you in a high-pressure sales situation since you must speak with someone to get the relevant details unless you’re comfortable blindly applying for a loan.

Credit history required

FreedomPlus generally requires you to have about three years worth of credit history to stand a good chance of being approved for a loan.

Fees and fine print

The company has a variable origination fee — between 0.00% - 5.00% — depending on your loan’s APR. If you make a late payment, you’ll pay either a flat $15 fee, or 5% of your payment amount, depending on whichever is greater. If the company processes a personal check, that’s another $15. If your monthly payment is returned, it’s yet another $15 fee.

Best debt consolidation loans for good credit

RocketLoans

APR

7.16%
To
29.99%

Credit Req.

640

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

SEE OFFERS Secured

on LendingTree’s secure website

Rocketloans is a digital finance business that is part of the Quicken Loans family. ... Read More

What we like

Even if you don’t have stellar credit, the interest rate that RocketLoans charges isn’t bad (assuming you are offered a low-end rate). RocketLoans is charging between 7.16% and 29.99% APR. The high end is the same rate you may find on a high-interest credit card. If you fall into that interest rate band, it may be worth reassessing this lender.

RocketLoans is also fast at funding your loan. If everything matches up correctly among you, RocketLoans and the bank, you may be able to receive the money the same day.

What could be better

RocketLoans isn’t available in every state. If you live in Nevada, Iowa or West Virginia, you can’t use the company to consolidate your debt.

The company only offers two different term lengths — 36 or 60 months. You can pay it off sooner, of course, and there’s no penalty for doing so. But this means you’ll only get a maximum of two different options for a given loan amount, which may not fit your budget.

Credit history required

The company does not say what sort of credit history is required to get a debt consolidation loan.

Fees and fine print

RocketLoans charges three different fees:

  • Late payment fee: $15
  • Origination fee: 1.00% - 6.00% of the loan amount
  • Returned check fee: $15

Best Egg

APR

Up to 29.99%

Credit Req.

700

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

0.99% - 5.99%

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

People looking for a process that is fast and straightforward can’t go wrong when applying through Best Egg for a personal loan. ... Read More


*The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99% - 5.99%. Any origination fee on a 5-year loan will be at least 4.99% and is deducted from loan proceeds. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may resulting an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. "Best Egg" is a trademark of Marlette Funding LLC. All uses of "Best Egg" on this site mean and shall refer to "the Best Egg personal loan" and/or "Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan," as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000.

Borrowers should refer to their loan agreement for specific terms and conditions. A loan example: a 5–year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3–year $5,000 loan with 5.99% APR has 36 scheduled monthly payments of $150.57. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank's policies.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

What we like

BestEgg has similar interest rates to RocketLoans, ranging from up to 5.99% to 29.99% APR. You can also take out loan amounts as small as $2,000 to consolidate your debt, which is a lot less than the minimum requirement for other lenders. Also, there are no prepayment penalties for paying off the loan early.

Heads-up, though: The minimum loan amount does vary by state, so it may be different depending on where you live. Georgia residents can’t take out loans of less than $3,000, Massachusetts residents must borrow at least $6,000, and New Mexico and Ohio residents must borrow at least $5,000.

What could be better

If you live in Iowa, Vermont or West Virginia, you’re out of luck when it comes to getting a BestEgg loan. That’s because the company doesn’t operate in those states.

You can take out a loan of up to $35,000 to consolidate your debt through BestEgg. That may sound like a good thing at first, but consider this: The company only offers you the choice of a three- or five-year term. If you take out a large amount of money, you’ll also need an equally high income to make those whopping payments. Instead, if you’re facing a large amount of debt, it’s worthwhile to also consider a lender that offers more options.

We also don’t like that BestEgg charges a $7 monthly payment fee unless you’re signed up for automatic payments. Signing up for auto-pay simplifies things for both you and the lender, but you shouldn’t be penalized if you’re not able to do that for some reason.

Credit history required

Unfortunately, BestEgg does not disclose this information.

Fees and fine print

Here’s a quick summary of the fees that BestEgg charges:

  • Origination fee: 0.99% - 5.99%
  • Late payment fee: $15
  • Returned payment fee: $15
  • Payment processing fee for people not enrolled in auto-pay: $7

Best debt consolidation loans for average credit

OneMain Financial

APR

16.05%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

If you have a credit score below 600, OneMain Financial is one of the few lenders that you can use to get a personal loan.... Read More


Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. The lowest APR shown represents the 10% of loans with the most favorable APR. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes. Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.

Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Florida: $8,000. Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. Texas: $8,000. West Virginia: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.

What we like

If you like working with bankers in person, this might be a better option for you since you’ll be required to visit a OneMain Financial branch to get your money. This means that if you are approved by noon and can make it to a branch, you could get your money that day.

What could be better

On the flip side, visiting a local branch to complete the loan application process could be inconvenient if you live in a suburban or rural area and there aren’t any locations close to you. These loans are also very expensive.

We also don’t like that the company’s loan policies vary across the country depending on your state of residence. This makes it difficult to easily compare lenders without contacting OneMain Financial to get the most accurate information for your situation.

Credit history required

Your credit history is important to OneMain Financial. But the company itself doesn’t have any listed requirements. Rather, your credit history is taken into account along with your debt-to-income ratio and your ability to make the loan payments on time.

Fees and fine print

There are no prepayment penalties with a OneMain Financial loan. The cost of origination or late fees varies depending on the state in which you live. You’ll need to contact OneMain Financial to get this information.

Peerform

Peerform
APR

5.99%
To
29.99%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 5.00%

APPLY NOW Secured

on Peerform’s secure website

Even with a credit score of 600, you still might be able to secure a loan through Peerform. ... Read More

What we like

These loans come with low rates, starting at 5.99% APR. Peerform is also open with its pricing scheme, listing in detail the APR and origination fees that come along with each credit grade, which you can see here.

What could be better

Peerform is a peer-to-peer lender, which means that the company relies on regular everyday investors to fund your loan. You could view this as a good thing since it’s not some mega-corporation that’s getting rich off funding personal loans, but it also means that it could take a while (up to two weeks) for your loan to be fully funded by investors. It’s even possible that your loan listing could end without enough investors to fund your loan, which means you may be offered less money than what you sought — or you may not even receive a loan at all.

These loans are also a bit on the fee-heavy side. For example, the company is trying to push you toward digital payments, because it will charge you a $15 fee per payment if you choose to send in a check.

Credit history required

Like many lenders, Peerform does not detail exactly what type of credit history is required to get a loan. Rather, the company takes into account other factors — such as whether your credit score is above 600 — when deciding whether to create a listing for your loan.

Fees and fine print

Here is a summary of fees that Peerform charges on its personal loans:

  • Origination fee: 1.00% - 5.00%
  • Unsuccessful payment fee: $15
  • Late payment fee: $15 or 5% of the amount due, whichever is more
  • Check payment fee: $15 per check payment

Best debt consolidation loans for bad credit

Avant

APR

9.95%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Up to 4.75%

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

Avant is an online lender that offers personal loans ranging from $2,000 to $35,000. ... Read More

What we like

Avant does offer smaller loans than many other lenders. You can take out a loan starting at $2,000, ranging up to $35,000, depending on the state in which you live. That’s helpful if you’re trying to work your way out of just a few thousand dollars of debt.

You can also get your money relatively quickly if you are approved for a debt consolidation loan with Avant. If you finish the application process and are approved for a loan before 4:30 p.m. Central time on a weekday, you could have your money the next day.

What could be better

Avant’s rates, fees, loan amounts and loan terms are dependent upon the state in which you live, so you’ll need to check for yourself on its website. But for Illinois (where Avant is headquartered), we noticed that these loans do come with higher fees than normal. They also come with high interest rates, starting at 9.95% APR.

This isn’t unusual since Avant is willing to work with people with less-than-stellar credit scores. It does make it inconvenient for you because you’ll need to assess whether it’s cheaper to consolidate your debt with a personal loan rather than paying it off as is.

Once you add on the upfront administrative fee to the high interest rate, you may find that this loan isn’t a deal at all in the long run compared to what you’re currently paying. The only way to know is to do the math.

Credit history required

Again, Avant doesn’t disclose how long your credit history needs to be to get a loan with the company.

Fees and fine print

In Illinois, where Avant is based, you can expect to pay the following fees if you take out a debt consolidation loan:

  • Administrative fee: Up to 4.75% of the loan amount
  • Late fee: $25
  • Returned payment fee: $15

Tower Federal Credit Union

Tower Federal Credit Union
APR

8.74%
To
11.74%

Credit Req.

580

Minimum Credit Score

Terms

12 to 72

months

Origination Fee

No origination fee

APPLY NOW Secured

on Tower Federal Credit Union’s secure website

Tower Federal Credit Union offers both personal lines of credit and more common signature loans that feature a fixed term. ... Read More

What we like

We like that there is a wide range of options for term lengths at Tower Federal Credit Union. You can choose from six different term lengths, ranging from one to six years. Having a wide range of options is good for you as a consumer because this effectively offers you up to six different monthly payment amounts that you can choose from to fit into your budget.

Rates for these loans are also relatively low. For example, if you opt for a one-year loan, rates start at 8.74% APR. Be warned: The longer your term length, the higher the minimum APR. If you instead opt for a six-year loan, rates instead start at 11.74% APR. At some point, you may need to reassess whether the interest rate you’re receiving is really lower than your current debts’ interest rate.

What could be better

Since this is a credit union, you’ll have a different working relationship. It’s not as simple as applying with any old online lender, getting the money, paying it back and having everything be all right.

First, you’ll need to join Tower Federal Credit Union. There are pretty strict membership requirements, but you can always join by making a minimum $35 donation to the TowerCares Foundation. You’ll need to deposit at least $15 in a savings account to establish your membership. Then, after you’ve applied and established your membership, you can apply for this loan.

You’ll also need to maintain your bank account if you’re older than 22. If more than a year passes without any activity in the account and if your balance is less than $100, you’ll pay a $3 quarterly inactivity fee. So, you can see, going with a credit union may boost your odds of approval if you have a low credit score, but it’s certainly not without a great deal of work compared to a regular online lender.

Another downside of getting a personal loan with Tower Federal Credit Union is that there’s no way to know how much money you can take out without applying for the loan first. That’s because the credit union will offer you a range of borrowing limits based on your credit score and ability to pay, which it determines after you apply for a loan. This could be inconvenient if you go through all the hassle of applying for a loan only to find out the loan amount won’t work for you.

Credit history required

Tower Federal Credit Union will look at your credit when deciding whether to approve you for a loan. But it doesn’t detail what sort of credit history is required to be approved for a loan. Besides your credit history, it’ll also look at your ability to repay the loan.

Fees and fine print

If you make a late payment, you’ll pay a $20 fee. That’s just a touch higher than with other lenders. Additionally, you can make your monthly payment over the phone, but if you do so, there’ll be another $9 processing fee.
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3 reasons to use a personal loan to pay off debt

 

How to choose the right debt consolidation loan

To help ensure you select the best debt consolidation loan for your financial situation, consider these four tips:

  1. Do the math: See what a debt consolidation loan will cost you in the long run compared to your current debts. A debt consolidation loan may give you a lower payment or a lower interest rate, but if you choose a long-term loan, you may end up paying more in interest charges by the time your term ends. LendingTree, MagnifyMoney’s parent company, has a debt consolidation calculator so that you can run the numbers.
  2. Consider which types of debt you want to consolidate: Generally speaking, student loan debt is consolidated separately from your other types of debt, such as credit card debt, medical debt and auto loan debt.
  3. Consider whether other types of loans are right for you: Home equity lines of credit, home equity loans, personal lines of credit and 0% introductory APR credit cards are also reasonable options for debt consolidation.
  4. Check whether you’re applying for a secured or an unsecured loan: If it’s a secured loan (backed by an asset such as your car) and you fail to make your payments, the lender can repossess the item. Unsecured loans, on the other hand, aren’t backed by this kind of collateral, but often come with higher interest rates. Make sure you consider the trade-offs before you apply for the loan.

This article contains links to LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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