Best Debt Consolidation Loans

When consolidation can help

Debt consolidation combines multiple debts into one new loan. The CFPB notes that a consolidation loan may offer a lower interest rate and simplify payments, but it can also cost more overall if the term is longer or if fees are significant.

As context, Federal Reserve data for May 2026 showed an average 11.86% rate on 24-month personal loans at commercial banks, versus 22.15% on credit-card accounts that were assessed interest. Those are broad averages, not quotes, but they illustrate why a well-priced fixed loan can sometimes reduce interest cost.

The four tests before you consolidate

Run the numbers before moving debt. A lower APR is useful only if fees and term do not erase the savings.

• New APR is materially lower than the weighted rate on the debts being replaced.
• Origination fees do not wipe out the expected savings.
• The payoff term is not extended so far that total interest rises.
• Your budget can support the new fixed payment without returning to card balances.

Avoid debt-relief lookalikes

The CFPB warns that some promotions described as consolidation may actually be debt-settlement services. A true consolidation loan is new credit used to repay existing debts; debt settlement is a different service with different risks.