Debt Consolidation Loans up to $100,000
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Choosing the Best Debt Consolidation Loans
To create the best list of partners for you, we’ve taken the following factors into account:
Before anything else, you first need to need to know if you qualify for the loan. Most lenders have a minimum FICO score – this represents their risk appetite. Even if you find what you believe to be the best company to get a loan from, you will have to look for other options if you do not meet their requirements. Therefore, if you have a relatively low FICO score, be realistic and expect higher APRs. On the other end, if you have an excellent FICO score, your options will be a lot broader.
Annual percentage rates (APR) and monthly payments
If you are looking at estimated APR and monthly payments, you should already have narrowed down the list of potential lenders on where you qualify. Of course, you want to get the best deal out there. However, understand that this is limited by certain factors, largely by your FICO score. What you will have now is a range of your potential interest rates you can accrue based on the information you gathered. Assuming you have the same loan term, the higher the interest rate is, the higher your monthly payments will be.
Aside from interest, lending institutions earn money through various fees. There are different types of fees that a lender can impose on clients, but the most common one is a prepayment fee. The best deal will not come with fees unless they are very minimal. Know the fees associated with your loan. Otherwise you might be surprised when your bill comes.
Accessibility and Convenience
If your credit rating is impeccable and you have found the perfect loan, you may find their payment process is indirect and very democratic. Is this still a viable option? You should always consider the accessibility and convenience of your lender. There are other concerns in your life besides settling your debt. If your chosen loan becomes a burden instead of making your life easier, you are better off with another creditor.
Lastly, assuming that you are no expert when it comes to how these things are handled, there must be qualified and competent customer representatives to bridge the knowledge gap for you. Even if you feel you are comfortable with a lender, you still must be certain that your concerns are addressed accurately in a timely manner. Especially when it comes to fees, there must be clear communication between the two parties. Without that, you might unknowingly hold wrong expectations and get very frustrated later on.
The decision must not be on your financial concerns alone. In the end, the loan is just as good as where you source it. Your choice must be a balance of all these factors, with some factors weighing more heavily than the others depending on your priorities.
Debt Consolidation with Personal Loans
Many individuals accumulate debt with various organizations. This can include things like student loans, credit cards, business loans, mortgages, and many other lending products.
One of the best ways to simplify this complex web of bills is with a debt consolidation loan. This is when you are given a loan to pay off other debts. The result is you get bill consolidation into one place so you don’t have to worry about tracking multiple different payments.
You pay a fixed payment to your lender for a period of two to five years on average. Most loans are offered at a fixed interest rate, which gives borrowers the stability and predictability they might lack in their current financial arrangements.
Are you a good candidate?
You might be a good candidate for a loan if:
- You can repay your 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 lender will charge
- Understand what support you have access to, for example: will the lender pay your creditors directly?
- Check if there is an advantage to having a co-signer on your loan.
Best Debt Consolidation Companies: What to Look For
If you’re looking to consolidate your debt, it’s essential that you work with the right lender. You want to be sure that the lender you choose is one of the best in the industry. The internet has brought about plenty of different companies that can help you get the financing you need, but there are also plenty of people looking to take advantage of people in rough circumstances.
You don’t want to end up working with a fraudulent company, so make sure to stay vigilant when you begin your search for a company. In this section, we’ll go over a few ways to make sure that you find the right company for your situation.
Check Interest Rates
This might go without saying, but you should always compare the interest rates of the lenders that you’re thinking of working with. If you don’t want to end up paying more money than your current credit card or loan provides you, make sure there is a substantial difference in the interest rates. A credit card consolidation loan should save you money to make sense as a solution.
There are plenty of debt consolidation loan calculator options online that can help you with this – we explore this further on this page.
While many people focus on the interest rates associated with loans, there are other things to keep in mind as well. If you want to make sure that you get the best deal, you also need to think of fees. Many loan companies try to hide the true cost of their loans by adding in fees at the end of the process. Always make sure that you check the terms of the loans to make sure that there aren’t any hidden fees.
While most loans do have small origination fees, you should never be paying a significant amount of the loan in fees.
Check Consumer Watchdog Sites
The main thing that you should also be looking at is consumer watchdog sites, especially when it comes to things like veteran debt relief. No matter how good you think a lender may be, it’s always important to make sure that you have a look at their customer service record. A lender might have great rates and fees, but they’re not worth working with if they have a long history of disappointing their customers. Also, checking these watchdog sites can help you tell if a company is acting fraudulently.
With the number of scams online these days, it’s more important than ever to use consumer watchdog sites to filter your lenders. These sites allow past customers to post praise and complaints, as well as do their own research on specific companies. Consumer Affairs and Better Business Bureau are both great places to start.
Other Things to Look For
While the above sections cover the primary things that you should look for when trying to decide on the best lender to work with, there are other factors that you should take into consideration prior to deciding on the lender you want to work with.
First of all, aside from fees, you might also want to look at penalties. Almost all lenders have penalties for missing or late payments, so it’s important to make sure the fees from your lender aren’t extortionate. Next, you’ll want to see the type of repayment options available through the lender. It’s typically much easier to work with a lender that provides electronic repayments, as you can set up automatic payments that ensure you don’t miss a deadline.
You should also make sure to research the credit score you need to work with the lender. The best lender for you will be within the range of your credit score. You don’t want to end up applying for multiple loans and damaging your score, so make sure that you look at what the lender typically requires. You can find this information on online credit forums.
Lastly, check if there are any additional benefits – a common one you might find is a hardship option. If you think you might run into problems in the future, it’s nice to know that you work with a lender that has hardship options that can help alleviate the stress. This is something you should always consider if you’ve had problems meeting your financial obligations in the past.
Consolidation Options: Loans vs. Credit Cards
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 and make paying off credit card debt seem easier.
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. Use a credit card payoff calculator to determine the best option.
There are some distinct advantages to personal loans when compared to credit cards for 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 debt consolidation loan rates are usually much lower for personal debt consolidation loans than they are for credit cards. In fact, because loans are issued through the banks, there are limits on how high of an interest rate they can have. For example, federal credit unions are typically limited to 18% per annum.
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 this type of 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 lenders.
Using Debt Consolidation Loans to Escape Payday Loans
While many people use debt consolidation loans to pay off high-interest credit card bills, you can also use these for other forms of debt. Payday loans are another form of debt that many people use loans for.
Payday loans are a growing problem in the United States – people use them as a form of finance when they have nowhere else to turn. The problem with payday loans is that they often have interest rates and fees that make the loans unaffordable over the long-term. If you’ve managed to grow a large amount of debt through payday loans, you might want to consider a consolidation loan.
Consolidation loans can offer you a much lower interest rate, which will allow you to ensure that you don’t have to worry about your debt increasing in the future. Many payday loans have interest rates of over 100%! This makes them one of the most unaffordable methods of finance in the world.
You can use the funds you receive from your consolidation loan to pay off the entirety of your payday loans – it’s one of the quickest ways to move forward from a payday loan debt situation.
Important Things to Consider When Comparing 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.
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. This being said, you are putting your co-signer’s credit score at risk, so make sure you can meet your requirements.
Alternatives and Their Downsides
If you’ve been looking at consolidating your debt, but you think there are some other great options available to you, you might be wondering what the best choice is. While there are plenty of ways you can reduce the amount of interest you’re currently paying, many of them come with downsides that are hard to foresee. Regardless, you might find that one of these options is more suited to you.
Below we will look at some of the most popular methods on the market.
Budgeting, Credit Counseling, and Approaching Debt Differently
Often people have a hard time escaping debt because they have bad habits and don’t fully understand how their credit card debt works. If this is the case for you, it might be worth looking to credit counseling if you need additional help. It’s often a great option if you want to be able to get back control of your current financial situation. There are plenty of free resources and services online, as well as in-person.
This is a good option if you think you can handle your debt in the future, but consolidating debt is often the best option if you really need to lower the current interest rates you’re paying. While credit counseling is good, it doesn’t decrease the burden of the cost of your debt.
If you don’t think there is any way you can pay back the debt you owe, even if you are able to obtain a loan, you might want to consider a debt settlement program. Some lenders will enter into debt settlement agreements when they know that you won’t be able to pay the money back. It’s a great way to ensure that you get rid of your debt, even if you can’t pay the full amount.
While there are plenty of lenders that typically won’t accept debt settlements, you can speak with your lender directly about your situation. The downside of this method is that it will impact your credit – if you have a good credit score, this will severely drop your current rating. For this reason, debt settlement should be avoided if you think there is any way that you can pay off your current debt. That being said many people have success fixing their credit on their own or even hiring credit repair companies to do it for them.
Secured Vs. Unsecured Loans
If you’re looking at loans to consolidate debt, you might find that many lenders offer a few different options. For example, you can often choose secured loans and unsecured loans. These are both forms of personal loans, but they vary drastically – the one you choose will depend on the type of loan you’re looking for.
In this section, we’ll give a quick overview of each type – it will give you a better idea of which one you might be interested in.
Unsecured loans are the most popular form of personal loan consolidation. They’re loans that are not secured against any asset. If you have a good credit score, you can obtain an unsecured personal loan to pay down your debts. You won’t have to worry about proving your assets or savings if you want this type of loan.
While many people choose unsecured personal loans, there are also plenty of people who get debt consolidation loans for bad credit. Secured loans are great if you don’t have a good credit score – they allow you to secure the loan against an asset or your savings. It means if you don’t pay the loan back, the bank can use your collateral to get their money back.
Secured loans also reduce the interest rates associated with the loan, as there is much less risk for the bank.
A Few Reminders
Before deciding to take out a debt consolidation loan, make sure it makes sense. This type of 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 finances under control.
As you can see, there are a number of advantages to using personal consolidation loans, however, make sure that you are using them as a way to get your financial future back on track. Also – make sure you understand the different terms and conditions so that you can get the right loan for your needs.