The average amount of debt of high credit score borrowers is consolidating

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Personal loans offer people a flexible way to borrow money to pay for various expenses or to consolidate multiple debt balances. Debt consolidation works best when you can turn your multiple debt payments from multiple lenders into one monthly payment with a lower interest rate. This helps you get better organized and get out of debt a little faster.

A recent LendingTree study collected data on how borrowers with high credit scores and low credit scores tend to use their personal loan money, based on personal loan data between April 2021 and March 2022.

The study found that the majority of high-scoring borrowers – 39.7%, to be exact – took out a personal loan to consolidate their debts. The average amount they borrowed was $19,991.

These high-scoring borrowers may actually enjoy better interest rates because creditworthiness is a big factor in the interest rate you receive for debts. A lower interest rate means you can save more money on payments.

Many financial experts actually recommend paying down debt to prepare for a recession, because freeing up your lines of credit can give you more flexibility in the event of job loss or a pay cut.

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The best personal lenders for debt consolidation

Marcus from Goldman Sachs offers some of the best personal loans for debt consolidation because this lender makes the process as easy as possible. Once you have requested the amount of money you will need, you can ask this lender to send direct payments to up to 10 of your creditors. You will only need to provide the creditors name, payment information and the amount of money you wish to send and Marcus will handle this transfer process for you.

Plus, if you’ve made 12 consecutive monthly payments on time, you can earn a one-month period when you don’t have to make a payment and your balance won’t accrue additional interest.

Marcus by Goldman Sachs Personal Loans

  • Annual Percentage Rate (APR)

    6.99% to 19.99% APR when you sign up for autopay

  • Purpose of the loan

    Debt consolidation, home improvement, wedding, moving and moving or vacation

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

LightStream is another solid option for debt consolidation, especially considering that this lender gives you up to 144 months to pay off your loan. This can make it extremely flexible for those who would prefer a much smaller monthly payment in their budget. You can also apply for up to $100,000 from this lender.

Borrowers who sign up for autopay (to have their monthly payments automatically deducted from their bank account each month) can also enjoy a 0.5% APY rebate.

LightStream Personal Loans

  • Annual Percentage Rate (APR)

    3.49% to 19.99%* when you sign up for autopay

  • Purpose of the loan

    Debt consolidation, renovation, car financing, medical expenses, marriage and more

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

And even if you don’t have a good or excellent credit rating, there are some personal loan options available to you. Upstart generally accepts applicants with a FICO® or VantageScore of 600 or higher, however, this lender also considers those with poor credit history. Just keep in mind, though, that if you apply for a loan with a lower credit score, you’ll be subject to interest rates above the lender’s APY range.

Beginner personal loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, credit card refinancing, marriage, moving or medical

  • Loan amounts

  • Terms

  • Credit needed

    FICO or Vantage score of 600 (but will accept applicants whose credit history is so poor that they have no credit score)

  • Assembly costs

    0% to 8% of target amount

  • Prepayment penalty

  • Late charge

    Greater of 5% of monthly amount past due or $15

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.