December 20, 2017
How to reduce debt payments when your credit is OK (between 580-699)

If your credit score is between 600-699, you have great options available to transfer your debt from loans and credit cards and save money. You will use a two-step process to not only save money but also to begin re-building your credit score to a higher level.
- Figure out how much you spend each month – At the end of the month, how much do you typically have left over to pay debt? If we could cut your debt payments in half, how many months would it take you to get the debt to zero? You don’t need to be super detailed here, but write it down on paper. If you need help, download our Debt Elimination Guide.
- Consolidate your loans to a cheaper rate – Whether you are paying student loans, a mortgage, credit cards, etc., these can often be transferred to a new provider at a lower rate. We’ve spent hours researching the best options for individuals with credit scores in the OK range, and you can see our top lenders below.
What is loan consolidation?
Loan consolidation means taking your current debt and transferring it to a new lender at a lower rate. For instance, if you currently have $10,000 in credit card debt or personal loans today at a 22% APR rate, your payments would be about $200 per month. If you transfer this debt to a new lender who will offer you an 11% interest rate, you’ll be paying $96 per month. That’s an immediate savings of $1,248 each year.
Loan consolidation works across multiple types of debt to help simplify your life. If you have a couple of different credit cards with balances plus a personal loan, consolidating with a new lender means you write just one check to one company each month. You not only save money – you also save time.
Loan consolidation with a personal loan
A personal loan balance transfer will be best for people with a credit score in the 680-699 range. Generally, there is an origination fee on a personal loan which is about 3%, so you need to make sure that the money you save is more than this 3%.
When should you not consolidate with a personal loan? You may want to wait if you:
- Have a credit score of 680-699 – If you are at the very upper end of what we would call an “ok” score, it’s worth applying for a balance transfer credit card. There are a few who will lend to credit scores as low as 680.
- Are considering applying for a mortgage in the next 12 months – Any debt consolidation eventually requires a hard credit pull and temporarily lower your score 10-15 points. It comes back, but if you are just about to apply for a mortgage, this can matter. However, if it will be 6 months or more until your mortgage, the personal loan can actually improve your score because as you pay it down, it improves your credit utilization ratio which then improves your credit score.
For people with OK credit scores, our top ranked personal loan companies are below. All conduct soft credit checks in order to show you your rate – so applying will not impact your credit score.
Best personal loans for credit scores 580-699

Avant
Avant is very good option for borrowers with 640-680 FICO scores looking for a loan of $2,000- $35,000*
- No prepayment fees
- 46 states & DC (not in CO, IA, WV, VT)
- Origination fee of 4.75%
- Funds deposited as soon as the next business day‡
* If approved, the actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors.
‡ Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday.
LendingPoint
LendingPoint is ideal for borrowers in the 600-690 range, but the company focuses on the overall creditworthiness of the borrower and not just credit score alone.
- Can often qualify those rejected elsewhere
- Operates in 30 states (see list)
- Transparent fees with no pre-payment penalty
Since many loan providers only operate in certain states, you can use the BrightRates personal loan match to see which lender is the best fit for your needs. And remember, consolidating your loans is just the first step. When you save money each month, try to use this new “extra” money to pay down your debt faster and move towards becoming debt-free.
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