Best Debt Consolidation Loan Companies
Debt consolidation companies offer solutions to combine multiple debts–such as credit card bills, home loans or other loans–into one easy-to-manage monthly payment. This debt relief solution may be helpful for consumers with many outstanding debts, especially if they have debts with high interest rates. Consumers with bad credit who are looking for debt relief and are hoping for a faster solution may use a debt settlement company as an alternative to getting a loan.
Compare Top Debt Consolidation Companies
Read 1238 Reviews
Best Egg makes it easy to apply online for a personal loan. With their quick and simple process, you can have the money you need in your account in as little as one business day, upon approval and verification.
|toll freenumber (855) 662-6876 Visit Website|
Read 657 Reviews
NetCredit prides itself on providing a "more personal, personal loan" and offers a 100% commitment to customer satisfaction with a process that is simple, transparent and reliable.
Read 416 Reviews
FreedomPlus in an online lender that underwrites consumer loans under the brand Freedom Financial Network, LLC. Its underwriting process gives low-cost loans to borrowers ranging from $10,000 to $40,000.
|toll freenumber (844) 752-5328 Visit Website|
|Liberty Lending Group|
Read 79 Reviews
This company gives consumers the opportunity to choose from several different in an online marketplace. With no hidden fees, no prepayment fees and fast approval, you’ll be able to find a fixed-rate personal loan in no time.
|toll freenumber (855) 535-8306|
Read 513 Reviews
LoanMe provides personal loans in as little as four hours. We strive to make the process quick and easy to yield needed funds for one-time purchases or debt consolidation.
|Credit Direct||Read 77 Reviews|
Credit Direct offers unsecured loans up to $40,000 and an online application. They are licensed in California, Texas, Florida, Pennsylvania, Michigan, North Carolina, Virginia and Arkansas.
|Ovation Credit Services|
Read 323 Reviews
Monthly credit monitoring offered. No-risk refund policy with a first-work fee of $89 and a recurring $59 monthly payment that can be cancelled anytime. Results are often seen in first 90 days.
|CountryWide Debt Consolidation Loans|
Read 16 Reviews
CountryWide Debt Relief has several options for debt relief, including debt settlement, debt consolidation and consumer credit counseling services. They help people facing financial hardships, including people facing bankruptcy.
Read 513 Reviews
|Out of Business|
Cashcall offers consumers personal loans, small business loans and mortgage loans online via a quick and streamlined application process. Cashcall's corporate headquarters are located in Orange, California.
Compare top personal loans for debt consolidation
When looking to take out a debt consolidation loan, there are a few things you want to consider, the fees and rates of the loan chief among them. For a debt consolidation loan to be worth your time and provide real relief, you need to ensure the interest rates are lower than your existing debts or you’ll end up paying more in the long run to pay off your debts. When selecting our top picks for this list, we looked at APR and fees along with credit score requirements, loan maximums, repayment terms and customer satisfaction to provide some worthwhile choices.
Best for large loans
What we like: Loans are available from $7,500 up to $40,000 with an online application and approval process. Funds are available as soon as 48 hours after approval. We like that the company shows straightforward rates on their website with transparent APR, terms and origination fees. There is no pre-payment required.
What to consider: With a quick and easy online approval process, you want to make sure you’re also making a wise financial decision. We recommend seeking credit counseling before applying for a debt consolidation loan to ensure it’s the right move for your financial situation.
Who’s it best for: Those who need to take out a larger loan, up to $40,000.
Best for good credit
What we like: Countrywide Debt Relief offers debt consolidation loans with repayment terms between 12 and 48 months. Their application and approval process is online and easy to follow with a quick turnaround time. We recommend checking out their “proven results” page to see case studies and understand their process and results.
What to consider: Countrywide Debt Relief offers two debt consolidation options: a debt consolidation loan and a debt consolidation program. The debt consolidation loan requires a good credit score and ability to make consistent payments. If you don’t qualify for a loan, you may qualify for their debt consolidation program, which is open to those of all credit scores and those whose debts currently outweigh their assets.
Who’s it best for: Those with good credit. If your credit is less than stellar, other debt management options are available through Countrywide Debt Relief.
Best for small loans
What we like: Best Egg offers personal loans for debt consolidation as low as $2,000. This is helpful for those who have a smaller amount of debt to consolidate and don’t want to be stuck with a larger minimum loan. However, you can also opt for larger loans up to $35,000. Approval with Best Egg only takes a few minutes, and loans typically take one business day to fund–which is a faster turnaround time than most personal loan companies.
What to consider: To qualify for the loan, you will probably need fair, good or excellent credit. If you have less than optimal credit, you might find it difficult to qualify for a personal loan with Best Egg. Best Egg also only offers two different loan terms: three years or five years. These are standard loan lengths, but most personal loan companies offer more options to choose from.
Who’s it best for: Those looking for smaller loans to help consolidate their debt.
What is a debt consolidation loan?
Debt consolidation is a form of debt refinancing designed to simplify the debt repayment process. In some situations, it can reduce the total amount paid (by reducing interest rates), and generally gives borrowers more time to repay the amount owed by providing a longer repayment term. A lot of people use a debt consolidation loan to pay off credit cards.
Debt consolidation can be done via a balance transfer credit card, through a credit counseling agency or by taking out a home equity loan or personal loan for debt consolidation. A personal loan typically has a lower interest rate than credit cards. The repayment terms can be stretched out to about 30 to 60 months, so you can take advantage of lower monthly payments for an extended period of time. Borrow only the amount you need so you don’t fall into an even worse position.
When using a personal loan to consolidate debt you’re still paying everything that you owe, but you’re simplifying your payments and protecting your credit. One new loan will pay off your other debts, and then you’ll be left with a single payment every month. Debt consolidation loans are available in various amounts through banks, credit unions, private lenders and other financial institutions. The amount you pay and the availability of loans will depend on factors including the total amount of debt owed and your credit.
Can you get a debt consolidation loan with bad credit?
You can still get a debt consolidation loan with poor credit, but it will be harder. Also, your interest rate will be higher, and higher interest rates could mean you aren't saving much money, which could defeat the purpose of consolidating your debt. When you're choosing a loan provider, consider the full amount of interest you'll pay over the life of the loan. Opting for a shorter term would increase your monthly payments but will also reduce the amount of interest and fees you'll pay over time.
If you have already consulted your local credit union and tried other financial options like a lender or loan finder service and are having trouble securing a debt consolidation loan, consider seeking help from a counseling agency. Credit counseling agencies offer counseling programs that can help people with bad credit who are having trouble finding a loan.
How do debt consolidation loans work?
Debt consolidation uses a personal loan to consolidate multiple debts into a single loan. Debt consolidation loans work for a lot of consumers struggling with debt. Debt consolidation is a debt relief program that allows you to take out one new loan to pay off some or all your outstanding debts. It streamlines paying multiple debts with one single payment at a reduced interest rate and lowers monthly payments. It might cover home equity loans, personal loans, student loans or credit card debt. The program typically allows three to five years to eliminate debt through repayment.
Do debt consolidation loans hurt your credit score?
When taking out any new line of credit, your credit score may suffer in the short-term. However, taking out a personal loan for debt consolidation should not have a long-term negative effect on your credit, provided you make your payments consistently and don’t default on the loan.
Credit scores are impacted by your credit utilization ratio (the amount of credit you owe compared to how much credit is available to you). Closing credit card accounts can reduce your available credit and thereby raise your credit utilization ratio. A higher credit utilization ratio can hurt your credit score. For that reason, you might want to leave your credit accounts open, after they are paid off. Just remember not to take on additional debt.
How do I qualify for a debt consolidation loan?
Specific debt consolidation requirements may vary by lender, however qualifications are likely to include the following:
- Proof of income
- Credit history
- Unsecured debt exceeding $5,000
While there is no official credit score minimum to qualify for a debt consolidation loan, debt consolidation lenders usually set a minimum credit score of 580 to 640 (or “fair” to “good”).
How to get a debt consolidation loan
Getting a loan for debt consolidation requires careful preparation. Consider the following process to help you get the best debt consolidation loan for your specific situation:
- Analyze your debt portfolio
Take an inventory of each loan and credit card balance you have and prepare a budget and payment plan. Your budget will help you calculate how much of a monthly payment you can afford. Your payment plan will remind you to set aside the needed funds for your payments.
- Know the type of loan you need
Your credit counselor or debt consolidation lender will help you identify the type of loan that you qualify for and have the best chances of paying off. If you've weighed your debt relief options and decided to take out a loan, you'll need to choose between a secured loan or an unsecured loan. Secured loans have collateral and tend to have lower interest rates, while unsecured loans have no collateral and higher interest rates. Your credit score, income and debt-to-income ratio will factor into your decision between a secured vs. unsecured loan:
- Secured debt consolidation loans are loans that are secured by an asset or property, such as a home, building or other real estate property. Some banks also accept your personal savings as collateral. Other lenders may consider chattel mortgages on movable property, such as cars, trucks, vans or mobile homes, to secure the loans they grant. Secured personal loans can be easier to get than unsecured personal loans, but they’re riskier. Only apply for one if you feel confident you will be able to make consistent monthly payments. Otherwise, you risk losing the asset.
- Unsecured debt consolidation loans are loans that aren’t backed by an asset or personal property as collateral. Personal loans, credit card debt, medical bills, payday loans and student loans fall into this category. Approval and interest rates are mainly based on your credit score, income and debt-to-income ratio. You generally need to have a good credit score to be approved for an unsecured personal loan for debt consolidation, though interest rates of unsecured loans are typically higher than those of secured personal loans.
- Find the right lender
Shop around and compare rates and terms. Know what lenders consider before approving a debt consolidation loan. Lenders are in a business of their own, and they want to protect their interests to be able to continue serving consumers who need their help. They will require:
- Proof of income to ensure that you have the financial means to pay the loan
- Credit score and credit report to check your credit and payment history
- Adequate collateral if you need a larger loan
Debt consolidation loan rates
Interest for both unsecured and secured loans can carry fixed or variable rates. If you’re worried about rising interest rates on your long-term loans, you will want a fixed rate. Variable interest rates depend on a benchmark set by banks periodically. This means interest rates on loans may rise or fall. Variable-rate loans have lower APRs than fixed-rate loans. Consumers are also protected from extreme rate fluctuation by a cap that limits how much your rate can rise over a specific period and the life of the loan.
Interest rates vary by lender and are based on several factors such as credit score, the loan amount and the term. Your credit score generally holds the heaviest weight. Debt consolidation loan rates can range from 4.5 percent for excellent credit to 36 percent for poor credit. Many lenders require a minimum credit score of 580 to receive a debt consolidation loan.
Estimated debt consolidation loan rates
|Credit score||Score Range||APR Estimate||APR Average|
Before taking out a loan for debt consolidation, make sure to analyze your debt portfolio, know the type of loan you need and find the right lender.
Debt consolidation reviews
Freedom Debt Relief is a credit advocacy and debt resolution company that has resolved over $4 billion in debt for its clients. Freedom Debt Relief has over 900 highly-trained professionals at their company. Their individualized approach first reviews every customer’s personal situation to determine whether they are the best fit for the company. If the company can’t help the consumer, they refer them to a more suitable agency.
Consolidated Credit has been in business for over 20 years and has helped over 5 million people eliminate debt. The company offers a wide range of debt assistance programs including debt management, credit improvement, avoiding foreclosure and bankruptcy plans. Consolidated Credit also offers a strong counseling and financial education component.
CountryWide Debt Relief is a 30-year-old debt settlement company that educates its clients about options to avoid bankruptcy. The firm is a proactive company that negotiates with debtors, coordinates repayment and teaches clients about improving their credit scores.
Founded in 2002, Pacific Debt Inc. was created to address the rise of consumer debt in the United States. Since its founding, Pacific Debt has settled millions of dollars in consumer debt each month by offering counseling and solutions that put the customer first.
National Debt Relief helps consumers find relief from burdensome debt with their debt settlement services. They offer alternatives to bankruptcy along with educational resources for people who are considering filing for bankruptcy.
This debt relief company provides debt settlement and debt negotiation services. They focus on giving personal attention to each of their customers and will help you find the best solution to manage your debt, even if that’s not with their company.
- Personalized attention: Debt RX keeps their client-base small so they can offer personalized customer service to each person seeking debt relief. This reduces hold times and increases the efficiency of the process of getting debt relief and debt settlement for their clients.
- Free confidential consultation: Get started with your debt relief program for free. Call for a free confidential consultation with one of Debt RX’s qualified debt management counselors to see which solution will work best for your situation.
- Free debt calculator: Use the debt calculator on Debt RX’s website to determine how much money you can save with a debt relief program instead of paying interest on your existing debts.
- Free debt relief resources: Learn about your options, including credit counseling, loans, bankruptcy and debt settlement on Debt RX’s website.
Consolidated Credit Counseling Services of Canada, Inc. is a nonprofit credit counseling organization that helps Canadians eliminate their debt responsibly. Their educational resources guide consumers to handle their current debt and learn money management skills that can prevent debt in the future.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.