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      December 1, 2020

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Consolidation Programs

  1. Credit.org
  2. CuraDebt
  3. SoFi
  4. UpStart
  5. LendingTree
  6. Credible
  7. Avant

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Best Debt Consolidation Programs

Debt consolidation can make a lot of sense for people with a high level of debt or paying a lot of bills. In these tough economic times many Americans are faced with significant credit card debt and are looking for help reducing their monthly payments. Debt consolidation is a method often used in this situation and helps consumers simplify their budget.

After consolidating their debt, many people report a reduced sense of stress. This is especially true when debt consolidation allows the consumer to better meet their obligations and get back on their feet financially. It's important to remember that after debt consolidation, consumers should closely monitor their finances and avoid taking on any new debt.

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Best Reviews

2020

Debt Consolidation Reviews

5 stars
National Debt Relief

NATIONAL DEBT RELIEF Visit Site

Cost:

National Debt Relief provides free assistance to review your financial situation and offers debt consolidation and other options to assist.

New Customers: 1-888-979-9776

TopConsumerReviews.com Best-In-Class Blue Ribbon Award National Debt Relief offers debt consolidation along with other customized financial solutions for customers with $7,500 or more in unsecured debt. They are successful as a result of their proactive efforts to identify the best options for each individual customer's financial needs. They have helped over 100,000 customers get back on their feet since opening their doors in 2009.

Debt consolidation shoppers can expect a professional experience when doing business with National Debt Relief. This starts with an informative and customer-friendly website that helps you understand the financial solutions available at National Debt Relief before speaking with a consultant.

The process is easy to get started with National Debt Relief. You simply complete an online form or call their dedicated debt help line at 1-888-979-9776 for assistance. You'll discuss your financial situation with one of their certified debt counselors, who will walk you through a free debt analysis to determine if debt consolidation or another route with help you best reach your financial goals faster. The staff at National Debt Relief are both knowledgeable and friendly, and we appreciate the level of professionalism and care they provide.

If the consultants recommend that debt settlement or debt negotiation are better routes than debt consolidation, you'll know you have other options to consider. The amount of savings available varies by the solution identified, as well as a number of factors that the debt consultant explains before you two make a final decision.

National Debt Relief has earned an impressive "A+" rating with the Better Business Bureau. This clearly indicates their dedication to the customer. They also offer a 100% satisfaction guarantee, which means if you're not happy with their service, you can cancel at any time without penalties or fees.

If you're looking to consolidate your creditor payments, you'll find that National Debt Relief is a reliable option. They employ friendly and knowledgeable staff to help you reduce your monthly payments and simplify your life. National Debt Relief (1-888-979-9776) earns our highest rating and is a great place to start.

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4.5 stars
Credit.org

CREDIT.ORG Visit Site

Cost:

Most of the services offered are free.

Some of the coaching services have a nominal fee depending on your circumstances.

Credit.org has a stellar reputation spanning more than 45 years in operation. Also known as Springboard Nonprofit Consumer Credit Management, this service offers non-profit financial coaching for a wide range of credit and debt concerns, including housing (foreclosure, reverse mortgage, pre-purchase), bankruptcy, student loans, debt consolidation, and debt relief. The BBB rates Credit.org as an "A+" accredited business across all of the services provided. Additionally, Credit.org is accredited by the National Foundation for Credit Counseling (NFCC).

One of the most compelling reasons for considering Credit.org is that many of their services are free of charge. For example, here's what you get when you choose to use their Debt and Credit Coaching:

  • Complete Financial Review
  • Free Credit Education
  • Debt Resolution Options and Suggestions, including Debt Consolidation
  • Resources and Referrals
  • Personalized Financial Action Plan
  • Ongoing Support

Yes, you understood that correctly: you'll pay absolutely nothing to use Credit.org's phone coaching for these services. Because this service is funded by donations and government grants, you are able to access a wealth of support at no cost to you.

Now, that's not to say that everything is free when you use Credit.org for debt relief. For example, if you're looking for a more traditional debt management plan - to help you pay off your debt faster, reduce your interest rates, create a realistic budget, consolidate your debt, and/or stop collection calls - you may pay a small enrollment fee along with monthly service costs.

What are those fees? They're very affordable, but will vary according to a number of factors. After our investigation, we can tell you to anticipate an enrollment cost of around $35 and monthly fees up to $20. Your exact costs will depend on the state where you live, your personal situation, and whether you qualify for a reduction or waiver of your fees due to hardship. Credit.org can provide you specifics about your eligibility requirements for those reductions/waivers.

We really appreciate that Credit.org has so much to offer at no charge. For many people, some knowledgeable, friendly financial coaching may be all they need for debt relief - to identify the best steps to take next, and the ideal resources to get them there. Plus, Credit.org's fantastic reputation over nearly 5 decades is a huge advantage in an industry where it seems like some new financial or debt service is always popping up.

For their wide range of services, including debt consolidation, debt management, and free coaching for consumers, Credit.org earns very high marks. They are definitely worth your consideration.

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4.5 stars
CuraDebt

CURADEBT Visit Site

Cost:

CuraDebt counselors provide a free review of your outstanding debt to determine the best route. Based on their analysis, they will refer you to either a commission-based or fixed-fee program.

CuraDebt has been in the financial solution business since 1996. They work with customers that have $10,000 or more of unsecured debt. Outside of debt consolidation, they also offer creditor negotiations, debt management, settlement, credit counseling and arbitration services to both individuals and small businesses.

CuraDebt treats each potential customer as an individual. At no cost to the consumer, they will confidentially review your current financial situation, as well as your short-term and long-term goals to make a recommendation. CuraDebt has access to the top A+ rated professionals and companies in the industry and will connect you with the right staff that can best help you reach your goals. The staff at CuraDebt are well trained professionals that are knowledgeable about available debt solutions, and can review the best options with you.

The process of getting started with CuraDebt includes a quick online form that requires your phone number and email address. During your initial call with CuraDebt, you'll be assigned a friendly,experienced financial counselor to walk you through your financial options. This person will not only closely review your personal financial situation, but they will also work with you to create a comprehensive solution to meet your needs and stay in contact with you while you progress through your debt resolution plan. This is a strong selling point at CuraDebt because no one wants to retell their story to staff members each time they have a question or concern.

CuraDebt professionally guides you through the effort to improve your financial situation and reach your goals. We liked that they not only offer debt consolidation but a whole host of debt relief solutions based on your individual needs. If you have $10,000 or more of unsecured debt, CuraDebt is worth your consideration.

Note: CuraDebt services are not available to residents in the following states: CT, GA, KS, ND, SC, VT, WA, WV, PA, PR, OR.

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4 stars
SoFi

SOFI Visit Site

Cost:

Varies

SoFi, short for "Social Finance", bills itself as a modern personal finance company, and its clean, crisp, easy-to-use website definitely matches that description. And they're clearly making an impact in the lending industry. SoFi currently has a variety of products, including personal loans, mortgage loans and refinancing, student loan refinancing, and more.

SoFi's application process is straightforward: enter your personal information, such as your name and address, current employer and annual wages/salary, and post-secondary education information, and if SoFi is able to confirm your information you'll be able to see the loan and terms for which you qualify. If they are not able to confirm your data, you will be asked to enter your Social Security Number.

There is an easy-to-miss link at the bottom of the site called "Eligibility Criteria". We encourage potential borrowers to look through the information there, as several states are excluded from their personal loan program, and there are other state-specific details to be aware of. Also, it states that personal loan recipients must be US citizens or permanent resident aliens, be of the age of majority in their state of residence, and must be currently employed.

We love that SoFi publishes its personal loan rates and that there are no prepayment penalties or origination fees: "what you see is what you get". Their loan rates are consistently very competitive with other loan companies.

Loan terms from 2 to 7 years were available for both fixed and variable interest rate loans, in amounts ranging from $5,000 to $100,000.

SoFi also has several unique perks that we like, from referral bonuses for new members referred by current borrowers (both parties get a cash benefit), to unemployment protection that suspends payments required from borrowers - for up to 12 months over the course of the repayment term - who lose their job through no fault of their own. SoFi even provides help through its Career Strategy department to assist borrowers in their search for a new job!

If you're in the market for a personal loan, you'll definitely want to take a look at what SoFi has to offer. We give them a strong recommendation because of their low interest rates, transparency, and lack of loan fees.

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4 stars
UpStart

UPSTART Visit Site

Cost:

Varies

Upstart is a peer-to-peer lending platform founded by former Googlers. At first glance, the site is neat and includes finance-related images such as pie charts and percentage signs to emphasize their purpose, which is to help people achieve their financial goals. The fonts are large, allowing easy reading, very helpful since financial information can be overwhelming. The site allows one to process information while pacing the reader through use of space and letter size.

Professional in look, the site however does not hope to impress in graphics or photos of people enjoying newfound financial freedom. Instead, the site uses facts and figures to communicate a serious, all-business tone. The only downside to this setup is that if a customer is not familiar with loans or borrowing lingo, they might be lost until they scroll to the bottom of the Home page to click on "Contact Us".

For customers who aren't sure where to begin, Upstart has a "Get Started" icon which asks them what they want to do. Upstart offers help with loan consolidation, paying off credit cards, paying medical bills, buying a car or other big purchases. Such a wide range of services is comforting to those seeking financial advice. The site also provides education to help you prepare for future financial decisions.

With respect to personal loans, Upstart is efficient. You can apply online and find out your rate within a few minutes. You're asked simple questions about your income and education history. Upstart then presents you with loan terms and options for payment. Once a customer agrees to the terms of the loan, funds are issued - sometimes, by the next business day. If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

Upstart's reputation is very solid - you'll quickly see links to articles on prominent sites like Fox, Bloomberg, and other news agencies, along with testimonials from satisfied clients. Their underwriting model uses machine learning and artificial intelligence techniques to underwrite borrowers based on many variables, including but not limited to credit score, income, education, and employment. Such details helped us gain more confidence in the success of this company's services.

We found the blog articles very helpful. With topics ranging from selecting health insurance to saving money on groceries, a person seeking financial security could benefit from the wisdom these articles offer. Unfortunately, this tool is found at the bottom of the Home page. The website would function more effectively if they included this option at the top of the page along with "Contact" and "Team" information because it is on these pages where we found answers to our initial questions.

While Upstart's website is good, it could use some enhancements to make it more user friendly. Still, Upstart earns high marks for their quick processing of loan applications and many helpful financial features.

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4 stars
LendingTree

LENDING TREE Visit Site

Cost:

Varies by lender

LendingTree is one of the most recognized names in the personal loan market. They quickly connect borrowers with a wide variety of lenders that can meet their debt consolidation needs with loans ranging from $1,000 to $50,000.

As a connection service rather than a direct debt consolidation lender, the loan products LendingTree has to offer and their terms and conditions naturally vary with each individual lender. One advantage of using LendingTree is the ability to survey multiple lenders' consolidation offers without having to disclose one's identifying information to those lenders. You only have to make yourself know when you've made the decision to apply for the loan that best fits your debt consolidation needs. Borrowers can also use offers obtained on LendingTree to negotiate directly with lenders; LendingTree provides customers with lenders' direct contact information for that very purpose.

If you choose to research debt loans using LendingTree, be aware that you will need to provide your credit score, which is used by lenders to determine if they would like to compete for your business. Even if you have a low credit score, you may still receive loan offers, because LendingTree works with such a large variety of lenders.

One thing to note is that LendingTree's main website takes you to the page for entering your information to get started in the consolidation quote process. There is very little other information on that page. We were able to determine that entering your personal information will not impact your credit report or your credit score, although we would have liked to see that fact clearly spelled out on LendingTree's landing page.

With a solid A+ rating from the Better Business Bureau, reliable history, and its ability to connect debt consolidation borrowers with a wide range of potential lenders, we give LendingTree good marks.

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4 stars
Credible

CREDIBLE Visit Site

Cost:

From $1,000 to $100,000

Getting a debt consolidation loan can be a hassle, but it doesn't have to be. Credible simplifies the process by giving you access to more than a dozen lenders with a single application. Since 2012, this service has connected consumers with the loans they need, with fully-vetted partners that meet the highest criteria for transparency and fairness. In fact, almost all of the lenders in Credible's network are included in our reviews.

To be clear, you can't get a debt consolidaton loan from Credible directly. They are not a lender. Instead, your application (which only takes 5 minutes or less to complete) is used to give you a results list of lenders that meet your needs, with loans ranging from $1,000 to $100,000. During the consolidation loan application process, you'll provide critical details like your employment status and credit score range, educational background, and your Social Security number.

Credible performs a "soft pull" - which will not impact your credit score, as you may already know - and then matches you with lenders who are willing to give you a loan. It's up to you to determine which lender has the personal loan that is the best fit for your situation. Terms vary depending on which one you choose, but in general you can expect interest rates ranging from 5.99% up to 35.99%

One nice perk that Credible offers is a Best Rate Guarantee. If you find better rates with another lender and close on a consolidation loan with that provider, you could be eligible for a $200 payment from Credible. We recommend that you read the terms and conditions (by clicking on the Learn More button in the Best Rate Guarantee pop-out), because there are certain criteria that have to be met (like submitting your request within 7 days of closing on your consolidation loan with someone else).

We were very happy to see that Credible has a strong, positive reputation. They're accredited with the BBB and have earned an "A+" grade with them, and more than 3,000 customers have given this service a flawless 5-star rating. Compliments include praise for Credible's reliability and easy-to-use website.

Credible saves you time with a one-application-fits-all process that sends your loan application to multiple lenders. Remember you'll still want to make sure that the lender you ultimately select is giving you a consolidation loan that you can pay back on time and with interest rates you can afford.

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3.5 stars
Avant

AVANT Visit Site

Cost:

Varies by state and borrower qualifications

Avant is one of the newest providers in the debt consolidation loans marketplace. They opened their doors in 2012 and received their first accreditation with the Better Business Bureau in March 2015. They currently have an A+ rating with the BBB.

Avant provides access to one of the larger ranges of debt consolidation loans available, anywhere from $2,000 to $35,000. Loans through the Avant platform include terms from 2 to 5 years. As an example, a $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.

Although Avant is relatively new to the online lending business, the Avant platform has issued more than $1 Billion in loans with over 450,000 customers. Their Chicago offices hold nearly 500 employees that are dedicated to providing affordable loans to consumers in need, and they bring a professionalism and dedication that is welcome to this industry.

There are no extra charges for prepayment of your consolidation loan, although late fees may apply if a payment is missed. Customer service is available 7 days a week.

Another area where Avant earns high marks is in how quickly they provide access to funds. The Avant platform can often provide funding for your loan as soon as the next business dayá through direct deposit.

Avant's debt consolidation loan application and approval process is very simple:

  • You provide basic information about yourself, such as your full name and address, income details, and social security number
  • After you receive your electronic loan offer, you digitally sign the contract they send
  • If approved, you could receive your money as soon as the very next business dayá

We're encouraged to see this lending platform enter the debt consolidation marketplace and earn such a high BBB rating in such a short period of time. With the quick loan application process and lack of exorbitant fees, Avant easily earns very good marks.

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Continued from above

Finding the right debt consolidation program can be confusing for many individuals. Thankfully a number of reputable financial companies allow consumers to search and apply for debt consolidation online, from the convenience of their home. This increases the chances of finding the right debt consolidation program that meets their needs.

Before applying for a debt consolidation program, you should consider these important points:

  • Method. What options will the company provide you with in their debt consolidation program?
  • Cost. Does the company charge a fee to review your finances and identify financial solutions? What are the details you can anticipate with your debt consolidation program?
  • History. Does the company have a long history of successfully helping clients with their financial needs? Is this a company you can trust with debt consolidation?

TopConsumerReviews.com has reviewed and ranked the best Debt Consolidation programs available today. We hope you find these reviews helpful in finding a debt consolidation program that meets your financial needs!

What Is a Debt Consolidation Loan?

If youíre struggling with credit card payments, medical bills, and other debts, youíve probably wondered if thereís any hope of relief. Many people in your situation turn to debt consolidation loans for their light at the end of the tunnel.

So, what exactly is a debt consolidation loan? This kind of loan means that you work with a third-party lender, who gives you a loan big enough to let you pay off all of your debts right away. Moving forward, your payments only go to the lender - not to the credit card company, the hospital, and so on. Because all of what you owe is now rolled into a single payment to a single lender, thatís why itís known as ďconsolidatingĒ your debt: putting it all in one place.

How do you know if youíre a good candidate for this form of debt relief? First, consider what kind of debt you have. If itís mostly credit cards, you may be the ideal applicant for a debt consolidation loan. Think about it: how easy is it to rack up charges on your main card, your favorite store card, and the card you let your teenager, partner, or friend use - only to discover, to your horror, that you owe way more money than you can possibly pay off quickly?

Second, take a look at how much you owe. If itís high enough that youíre having a hard time making payments, but low enough that you can still qualify for a personal loan, youíre probably on the right track with considering a debt consolidation loan. There are ways to get debt relief on larger owed amounts, but they usually differ from traditional debt consolidation loans.

Debt consolidation loans offer some pretty significant advantages. One of the biggest is the lower interest rates. Have you looked at your credit cardsí APRs lately? Chances are good that youíre paying anywhere from 16.99% to 24.99% - or higher! If youíre able to qualify for a debt consolidation loan that only charges an interest rate of 7%, youíre automatically saving money.

Another big perk is the convenience. Have you ever missed a payment because you simply forgot when it was due? When you have lots of credit cards, it can be far too easy to rack up late payment fees. With a debt consolidation loan, you make one monthly payment and thatís it.

Finally, getting a debt consolidation loan from the right provider can get you access to tools for managing your spending wisely in the future. How? The best lenders work with you to develop a plan for your finances going forward: how to spend less than you earn, how to avoid unnecessary debt, and even how to manage your money so that you donít wind up with unpaid bills.

While debt consolidation loans arenít right for every consumer, they represent a solid path to financial stability for many people. Especially for those with lots of credit card debt who arenít sure how to avoid getting themselves in trouble again in the future, these loans can help them get out from under the burden of crushing monthly payments and ever-increasing interest rates - all while helping them learn how to be smarter with their finances in the future.

 

When is a Debt Consolidation Loan a Good Idea?

Does this sound familiar? You think youíre doing okay with your bills, and then something unexpected happens - a car repair, a trip to the doctor, a flight home for a funeral - and on the credit card it goes. And, itís the start of the school year, so your department store card gets a workout when the kids need new clothes (and maybe a little something new for you too, why not?). Then thereís all of the everyday expenses like groceries, gas and that visit to your favorite coffee shop.

You open your email and find a notification: missing credit card payment. What?! As it turns out, you forgot about the electronics store card when taking care of your bills. Now youíve got a late fee and interest payments. But, no problem. For all of those other cards, youíll make the minimum payment on time and be just fine...until that week where your paycheck is smaller than you expected, and now you canít even make the minimum amount.

How can you break the cycle? If youíre one of the millions of Americans who carries a high balance on more than one credit card every month, you could be a good candidate for a debt consolidation loan.

How does it work? You get a loan from a third-party provider that pays off every single one of those credit cards - at the same time. From that point forward, you have only one payment to remember: the monthly payment to the provider of your loan. The benefits are obvious: with only one debt to pay, the chances of forgetting it or submitting late are much lower, keeping you in good standing and helping to improve your credit score.

But, there are other reasons why getting a debt consolidation loan is a smart choice. The biggest one is that it saves you money - not just in late fees, but in interest. Your credit cards probably have a very high rate, maybe even over 20%! If you qualify for a debt consolidation loan, you could see interest fees as low as 5%, which gives you an instant savings compared to your credit cards. And, because your loan has a fixed term, you know your payments are finished once youíve repaid everything - unlike credit cards, where you could be making minimum payments indefinitely, all while paying far more than you would have if youíd just made your purchases in cash (or paid off the card in full every month). Of course, this assumes that you donít go back to racking up debt once youíve paid off your balances!

Finally, many of todayís top providers of debt consolidation loans genuinely want to see you succeed financially. So, as part of the process of getting your loan and over the course of your repayments, they work with you to develop strategies to avoid getting yourself into excessive debt again. Some of the tools available might include budget apps and spreadsheets, lessons on credit scores and how to improve them, and how to use cash as a way of living within your income.

So, in short, a debt consolidation loan is a good idea if you:

  • Have a considerable amount of credit card debt
  • Struggle to make your payments
  • Have credit that is good enough to be eligible for a low-interest loan
  • Are ready to change your spending habits so that you donít wind up in debt again
  • Have enough income to make the payments on your consolidation loan

If this applies to you, consolidating your debt with a loan could represent a path to financial security and freedom from worry over your bills from month to month.

 

What Can I Do With The Extra Money From a Consolidation Loan?

So, youíve heard about debt consolidation loans and youíre thinking they sound like a great way to get back on your financial feet. You could be right! But, before you start fantasizing about using your loan for a trip to Tahiti or for one of the most cutting-edge TVs on the market, letís talk about how to use that money.

First, itís important to understand that the purpose of a consolidation loan is to eliminate your debt - or at least change it into something that is more beneficial to you. You get a loan like this when you have multiple debts to pay every month - a couple of credit cards, a car payment, and so on - and you want a way to not only simplify but also save money. You take out a loan that can pay off your balance in full, preferably at an interest rate thatís significantly lower than what you have on those other debts. Given that many credit cards charge interest rates anywhere from 18.99% to over 24%, itís not hard to see how a single payment at a rate of 7% could take much less from your wallet!

In other words, while you could use your consolidation loan money to go on that extravagant vacation or even over the hill and through the woods on a visit to Grandmaís, you wonít be helping yourself financially. Instead, you should use the loan to pay off your debts, starting with the payments that have the highest interest rates and working your way through what you owe until youíve got it all paid in full.

Second, recognize that debt consolidation will only work for you long-term if you stop getting into debt in the future! When you take out a debt consolidation loan, youíre actually adding to your debt with the purpose of making it more affordable and manageable: paying off credit cards in full, reducing or paying off your medical bills, and so forth, so that hopefully the only debt payment you have from month-to-month is that consolidation loan. However, if you keep racking up charges on your credit cards, youíre jumping right back into what got you in trouble in the first place!

It can be extremely tempting to think of your consolidation loan as ďextraĒ money, but you should avoid using it for any other reason than to pay down your debts. So, before you start dreaming of all of the ways youíd like to spend it, sit down and make a list of all of the debts youíd love to never have to pay again. Maybe itís your favorite credit card with the high limit (and the high interest rates to match). Or perhaps youíd be really glad to pay off your car and get the title released by the bank. Picture yourself getting a statement that has a zero balance, and how great youíll feel knowing that youíll never get that bill (or a late payment warning!) ever again.

With that list in hand, youíll know exactly how to use the money from your debt consolidation loan. And, better yet, youíll know that youíre on the road to financial stability, especially since youíll work hard to avoid getting into debt in the future.

 

3 Questions to Ask When Considering a Consolidation Loan

Many Americans find themselves drowning in debt. The average household carries over $8000 in credit card debt alone, and most people face financial struggles when trying to make car payments, pay medical bills, and everyday expenses. Plus, itís easy to get in over your head very quickly when you have more than one credit card - and when you have a hard time saying ďnoĒ when you see something at the store that you really want!

Debt consolidation loans are growing in popularity as a way of getting relief from the weight of multiple payments and high interest rates. These loans give you the money you need to pay off all of your debts at once: your credit cards, doctor bills, even car payments and more.

Sounds great, right? That depends on several things. If youíre considering a consolidation loan, here are three questions you should ask.
 

  1. Will it save me money?
    The whole point of a debt consolidation loan is to be better off financially than when you started. You need to do a careful evaluation of your current situation. How much debt do you have? What are the interest rates youíre paying for your various credit cards, auto loans, and any other debts you have? You wonít know if a consolidation loan is a good choice if you donít know what youíre already paying.
    You also need to look at the term length of your current debts. Yes, it sounds like an automatic savings if you go from credit cards charging over 18% in interest to a consolidation loan that only charges 8%. But, your loan could have a term of five years - and if you can pay off your credit card in 6 months, are you actually saving anything? Do the math. It matters!
     
  2. Will I qualify?
    Unless youíre putting something down as collateral (i.e. a secured loan), any lender will look at your credit history to determine if youíre eligible for a consolidation loan and if so, at what interest rate and terms. Thatís where the paradox happens: you need good credit to get a consolidation loan, but chances are high that if you have a solid credit history, you donít need consolidation!
    You donít risk anything by working with a lender to see if you pre-qualify, but prepare yourself for higher interest rates or collateral requirements if your credit score isnít fairly decent.
     
  3. Do I have an effective plan for staying out of debt?
    As mentioned earlier, the reason for getting a consolidation loan is to reduce and/or eliminate debt. Frankly, the reason youíre in debt probably has something to do with your spending habits - unexpected expenses like car repairs and medical bills notwithstanding. If you consolidate your debt by taking on a loan but continue to put more on your credit cards than you can pay in full every month, youíve just added to your debt problem - because youíve still got credit card payments, and now you have loan repayments on top of that.
    Fortunately, there are reputable providers of debt consolidation loans who work with you to create a plan for your financial future - and thatís included as part of their lending process. Whether you need help setting up a budget, analyzing your income, or deciding if you need credit cards at all, youíll find many of those resources at your fingertips if you choose your debt consolidation lender carefully.

Debt consolidation loans have been successfully used by many people to pay off high interest rate debt, simplify monthly bills, and to get on more secure financial footing. Is it right for you? Take the time to answer those three questions for yourself before deciding if itís an option thatís going to help you both now and down the road.

 

Can I Get a Consolidation Loan If I Have Bad Credit?

For people with piles of credit card debt, medical expenses, car payments and other expenses, it can be frustrating and scary figuring out how to pay the bills every month. Debt consolidation loans are often held out as a solution that can fix everything by lowering interest rates and simplifying a lot of debt into a single monthly payment.

The good news is that, for the most part, thatís all accurate. These loans make it possible for many individuals to get back on track financially and pay off several different debts all at once. But, thereís a downside: not everyone qualifies for a debt consolidation loan. If you have less-than-stellar credit, you could find yourself up against the same issues youíd have with any other loan: you get turned down because youíre viewed as being at risk of not paying it back.

It probably feels like a paradox: you need a debt consolidation loan to pay off your debt and build up a better credit history, but you wonít be eligible unless you already have a better-than-average credit score. Is all hope lost if you have bad credit and you want a consolidation loan?

Fortunately, you may still be able to take advantage of debt consolidation, even if your score could use some work. Be aware that itís not going to be as easy for you, but there are options. Here are several things to look for, to find a lender that is willing to work with your particular situation.

First, look for a lender that will consider more than just your credit score when determining your eligibility for a debt consolidation loan. While itís true that most traditional lenders focus heavily on your credit history, some of the newer partners on the market also factor in your income, education, and job history to qualify you for a loan.

Next, determine if youíre willing to offer up collateral to secure your consolidation loan. Some lenders will lend you the money if you ďsecureĒ it with your car, home or other significant asset. Of course, this is a much riskier strategy - because if you default on your consolidation loan, you have a lot more to lose!

Finally, analyze your current debt situation and figure out how much youíre paying in interest. Some lenders have no problem with issuing consolidation loans to people with bad credit - but they charge really high interest fees in exchange for taking on the risk. Still, depending on the rates youíre already paying, you could still save money if the consolidation loan has interest rates that are lower. But, you absolutely need to do the math to determine what rate would make sense, so that you donít wind up actually spending more on interest with your debt consolidation.

In summary, it is possible to get a debt consolidation loan if you have bad credit. However, youíll probably have to work a little harder to find a lender that will take into account your full financial picture, and to ensure that any loan you accept will genuinely save you money in the long run. Itíll take some effort, but it could be well worth it if it helps you simplify your debt situation, reduce your interest rates, and develop a plan for staying out of debt in the future.

 

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