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Why You Should Consider Debt Consolidation Loans

What are the Factors to Look at When Comparing Debt Consolidation Lenders?

Knowing the things to consider when finding the right Debt Consolidation Lender is important.

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See Estimated Loan Amounts for $10,000?

We compiled estimates for a period of 36 months (3 years).

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What are the Options when it Comes to Debt Consolidation?

You have several options when it comes Debt Consolidation. You just have to pick the right one for your situation.

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Do you Want to Learn How to Consolidate Debt?

We listed down the steps you need to take in order for you to start Debt Consolidation.

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Debt Consolidation with Personal Loans

Often in the course of life individuals accumulate debt with various different organizations. This can include things like student loans, credit cards, business loans, mortgages, and many other examples. One of the best ways to simplify this complex web of bills is with a debt consolidation loan. A debt consolidation loan is when you are given a loan to pay off other debts. The result is that your bills are consolidated into one place so you don’t have to worry about tracking multiple different payments. You pay a fixed period to your lender for a period of two to five years on average. Most consolidation loans are offered at a fixed interest rate, which gives borrowers the stability and predictability they might lack in their current financial arrangements.

You might be a good candidate for a debt consolidation loan if:

  • You can repay your consolidation loan without accruing additional debt.
  • You have the right credit to obtain a loan at a better interest rate than your current debt.
  • You are having a hard time keeping up with multiple different payment schedules.

However, as with all financial products, there are a few things you should pay attention to:

  • Make sure you are aware of the fee the consolidation lender will charge
  • Understand what support you have access to, for example: will the lender pay your creditors directly?
  • If there is an advantage to having a co-signer on your loan.
Debt Consolidation Loan

Estimated Loan Terms for $10,000 payable in 36 months

COMPANY

Estimated APR

5-13.5%

Monthly Payment

$319

Minimum FICO

670

More Information
  • No minimum gross income required
  • No credit history required
  • Maximum debt-to-income ratio: Low to None
  • No Origination fee
  • No late fee
  • Ideal for those with great credit profiles
  • Does not cater to college or business loans

Official Website

COMPANY

Estimated APR

6-13%

Monthly Payment

$321

Minimum FICO

660

More Information
  • No minimum gross income required
  • No credit history required
  • Maximum debt-to-income ratio: Low to None
  • No Origination fee
  • Late fees: 4%/$5 (lower amount)
  • Ideal for those with minimal credit history but high income
  • No personal-check processing fees

Official Website

COMPANY

Estimated APR

7-13.5%

Monthly Payment

$325

Minimum FICO

640

More Information
  • 0.99% – 5.99% Origination fee
  • $15 late fee
  • Ideal for those with good scores and many years of credit history
  • Quick funding and processing, typically within a day
  • No personal-check processing fees

Official Website

COMPANY

Estimated APR

11.99%

Monthly Payment

$332

Minimum FICO

660

More Information
  • $25,000 minimum household income
  • Caters to all US states
  • No origination fee
  • $39 late fee
  • Multiple payment options

Official Website

COMPANY

Estimated APR

13.1%

Monthly Payment

$337

Minimum FICO

620

More Information
  • No minimum gross income required
  • No credit history required
  • Maximum debt-to-income ratio: Low to None
  • Late fees: 5% of payment/$15
  • 1% to 6% Origination fee
  • Ideal for those with minimal credit history
  • No personal-check processing fees

Official Website

COMPANY

Estimated APR

13.7%

Monthly Payment

$340

Minimum FICO

600

More Information
  • Late fees: 5% of unpaid amount/$15
  • 1% to 6% Origination fee
  • Ideal for those with good credit scores
  • $15 unsuccessful payment fee
  • $7 personal-check processing fee

Official Website

COMPANY

Estimated APR

14%

Monthly Payment

$342

Minimum FICO

640

More Information
  • No minimum gross income required
  • No credit history required
  • Maximum debt-to-income ratio: 50%
  • 1% to 5% Origination fee
  • Late fees: $15 or 5% of amount (whichever is higher)
  • Ideal for those with good credit score
  • No personal-check processing fees

Official Website

COMPANY

Estimated APR

17%

Monthly Payment

$357

Minimum FICO

660

More Information
  • No minimum gross income required
  • 3 years credit history required
  • Maximum debt-to-income ratio: 50% or less
  • 2% to 5% Origination fee
  • No late fees
  • Exclusively for credit card debt
  • No personal-check processing fees

Official Website

COMPANY

Estimated APR

16-25%

Monthly Payment

$374

Minimum FICO

640

More Information
  • $24,000 minimum household income required
  • 1% to 6% Origination fee
  • $5 Check payment fee
  • $15 Late fee
  • $15 Unsuccessful payment fee

Official Website

COMPANY

Estimated APR

21.1%

Monthly Payment

$377

Minimum FICO

640

More Information
  • No minimum gross income required
  • Maximum debt-to-income ratio: 45%
  • 1.38% – 5% Origination fee
  • $15 Late fee
  • Loan consultants can easily be reached at (844) 583-9112
  • $15 Personal-check processing fee

Official Website

COMPANY

Estimated APR

22.6%

Monthly Payment

$385

Minimum FICO

600

More Information
  • $20,000 minimum gross income required
  • No credit history required
  • Maximum debt-to-income ratio: Less than 45%
  • 5% Origination fee
  • $30 Late fee
  • Suitable to those with bad credit
  • No personal-check processing fees

Official Website

COMPANY

Estimated APR

22.6%

Monthly Payment

$393

Minimum FICO

580

More Information
  • 0.95 – 3.75% Origination fee
  • Different late fees depending on State
  • $15 unsuccessful payment fee
  • No personal-check processing fees
  • No prepayment fee

Official Website

COMPANY

Estimated APR

22.6%

Monthly Payment

$421

Minimum FICO

600

More Information
  • Varying Origination fees depending on State
  • Varying Late fees depending on State
  • Suitable for borrowers with average credit score

Official Website

COMPANY

Estimated APR

25-36%

Monthly Payment

$427

Minimum FICO

None

More Information
  • No minimum gross income required
  • No credit history required
  • Varying Origination fee depending on State
  • Caters to borrowers with poor credit
  • In-person processing is needed to complete the application

Official Website

COMPANY

Estimated APR

27-36%

Monthly Payment

$433

Minimum FICO

580

More Information
  • Maximum debt-to-income ratio: 41% to 45%
  • $35,000 minimum gross income required
  • 3 years credit history required
  • No Origination fee
  • Caters to borrowers with average to good credit
  • Late fee varies depending on State
  • Only available in the following states: AL, CA, GA, IL, MO, OR, SC, UT

Official Website

Consolidation Options: Loans vs. Credit Cards

Debt Consolidation

With the right credit you can get a card that has an introductory 0% interest period. Transferring your current balances to this new card can save you money.

Something to consider, though, is that the introductory rate will eventually expire. If you haven’t paid off the balance by that point you could be in for a surprise when the bill comes due. The interest rate on credit cards is almost always higher than the interest rate on a personal loan, so if something comes up and you can’t pay off the balance on time you’ll face a large expense.

There are some distinct advantages to personal loans when compared to credit cards for debt consolidation.

The first advantages have to do with the structure of a personal loan. The fixed payments provide predictability on when you will be done paying your loan, and the interest rates are usually much lower for personal debt consolidation loans than they are for credit cards. In fact, because loans are issued through the bank, there are limits on how high of an interest rate they can have. For example, federal credit unions are typically limited to 18%.

Another advantage is the way that the debt is treated on your credit report. Credit cards appear as something called revolving debt, which has a greater impact on your score than installment debt, which is how a loan is categorized. This has to do with the fact that credit cards have a credit limit, and using too much of your credit limit can negatively impact your score. These factors don’t apply to installment credit.

There are a number of ways that you can get personal debt consolidation loan, but one of the most common is to use online services to compare different lenders. Each lender has different policies and procedures, so it is important to understand how to compare different personal debt consolidation loan lenders.

Important Things to Consider When Comparing Debt Consolidation Lenders

Direct Debt Payment

Some lenders offer a service to directly pay your debts out of your loan, this allows you to save time and money by handing the paperwork off to someone else. As a result your debts will get paid in a timely manner, which saves you money on interest.

Fees

It is important to realize that the lenders will have to make money to provide you with their services. This is where fees come into play. Make sure you understand all the different types of fees each lender charges, as well as the way you will have to pay them back.

Look for Ways to Save

One common way to get a lower interest rate on a loan is to add a co-signer who will also be responsible for the loan should you not be able to make payments. This makes your loan less of a risk, so your interest rate won’t be as high.

Learning How to Consolidate Debt

Before deciding to take out a debt consolidation loan, make sure it makes sense. A debt consolidation loan doesn’t save you money if the loan’s interest rate is higher than the one you are paying on your current debt.

Additionally, if you don’t deal with the circumstances that lead you to accrue debt in the first place, then you will not benefit from a consolidation loan. It is important to not add any more debt after you have taken out your consolidation loan, or you will be in a worse position than you were before.

Finally, have a plan to deal with small emergencies before you start paying off your debt. A rainy day fund can help you avoid using your credit cards when an unexpected expense comes up, making it more likely you’ll get your debt under control.

As you can see, there are a number of advantages to using personal debt consolidation loans, however, make sure that you are using them as a way to get your financial future on track, and understand the different terms and conditions so that you can get the best loan for your needs.

Debt Consolidation