Best Debt Consolidation Companies 2020
Which companies make it easy for you to combine your debts in a single monthly payment?
Consolidate debt can grow pretty quickly, especially when you are trying to manage a lot of them at the same time. If you are struggling with loan repayments, medical bills, and credit card debts, you should probably start looking into debt consolidation companies.
With Consolidate debt, you don’t need to continue paying all the bills until you clear them. You may get into bigger bills when you do that. You only need to apply for a single loan that will cover all the bills. You will then use that money to pay off all your bills and start paying the new loan in monthly installments. Remember, you will only be making one payment at the end of the month.
You can access consolidation loans from specialist companies or lenders who offer personal loans, but the rate will depend on your credit cards score. In some cases, you may pay more than you were initially supposed to settle because of your current score. You may also save a lot in the long run at certain interest rates.
What is the difference between debt settlement and debt settlement?
Consolidation companies and debt settlement are sometimes used interchangeably, but they mean different things altogether.
Debt consolidation allows you to pay off your debts with a single loan, and then you will be paying for that loan in monthly installments.
Loan debt settlement, on the other hand, makes your debts easier to manage. You won’t be paying to all your lenders; instead, you will be paying the money into a fund. With debt settlement, someone else negotiates for the reduction of your debt. Although the negotiator will charge you, you can still save a lot of cash from debt settlement. You should, however, take note that debt settlement can affect your credit cards score negatively.
One of the best debt settlement companies is National Debt Relief. This company will advise you on how to reduce your loan debt. They will offer you even if you decide not to use their services.
If your credit cards score is good, you can access a low APR. The APR can be as low as 6% and as high as 18%.
If you are considering debt consolidation, you may want to know the best companies in the industry.
Discover: Best Overall
Although Discover offers a wide range of financial services, bill consolidation is one of the prominent ones.
The company’s loan features the following
- An unlimited number of tools to help you manage your money efficiently.
- There are no penalties for early repayment of loans.
- You need a minimum family income of $25,000 to apply.
- Reliable US-based support. You can access support services via phone, live chat, and social media.
- Unsecured loans
- A maximum personal loan amount that is below average.
Discover is a reputable bank in the United States, and the company focuses on helping manage their money well, save, and get out of debt. They will offer you a fixed interest rate on your best debt consolidation loans and even pay your creditors for you. In the end, you will save some money on interest rates and pay off your loan faster than you would have.
You should, however, note that the previous high-interest rates you paid prior to the direct consolidation loan will not be refunded.
Although Discover does not charge origination and prepayment fees, they charge late fees. This means that as long as you pay your loan on time, you won’t incur any fees.
You can access up to $35,000 in unsecured loans for debt consolidation. However, if you are ready to offer a guarantee for the loan, you can access up to $200,000.
Marcus by Goldman Sachs; Best for People with Good Credit Score
- You will access a moderate loan amount.
- You can apply online.
- You will not pay an application fee.
- They will not pay your creditors directly.
- You will enjoy a flexible loan payment term.
- If you have a bad credit cards score, you should prepare to pay a high APR.
Marcus can offer customers up to $40,000 in personal loans for debt consolidation. Customers who have good credit cards scores have a higher chance of qualifying for loans at lower rates. Customers with bad credit scores may be eligible, but the rates are incredibly high.
Marcus has an easy-to-use application platform, and you can get a lot of information about their products before you apply. You can even check the rates and others with the pre-application calculator. The company’s repayment terms are also flexible. You should, however, note that the loan term influences your interest rates.
You can complete the entire consolidation online application. If you encounter a problem during the application process, you can call the company’s support team to help you out. That means you don’t need to visit their office at all.
InCharge: Best for Financial Education
- No credit card influence.
- Access to financial education.
- You will settle a monthly charge and a setup fee.
- All your cards will be suspended during the procedure. You will have access to only one emergency card.
- Your monthly payments will be worked out with a credit counselor. In most cases, they will be affordable.
InCharge is based in the United States, and it’s objective is to help people manage their finances responsibly. The company offers credit counseling services. They also help people to consolidate their debts.
They help their customers to understand how to manage their finances for the long time. Such that, even when they get out of them, they will never accumulate a lot of debt that will require consolidation again.
Avant: Best for overpayments
- Easy online application.
- Quick access to funds.
- They will not pay your creditors directly.
- Low maximum loan amount.
- Low-interest rate.
- The maximum loan period is five years.
Avant makes the loan application procedure easy. You can also track your loan repayments with the tools they have made available. Avant will also not penalize you for making overpayments. The company does not operate from a physical location, but it is always available via phone and email to help customers.
Avant also has a tool to help you check your eligibility. Fortunately, this procedure will not affect your credit score.
LightStream: Best for Flexible terms
- The payment time is flexible; the maximum term is 12 years.
- They have a very high lending limit.
- You will access loans at incredibly low rates if you have excellent credit.
- People who use autopay will also enjoy reasonable rates.
- They will not settle your creditors directly.
- This company will approve your loan online.
LightStream offers personal loans at highly competitive rates. Their loan terms are also longer than the terms offered by several other lenders. You don’t need to visit their office to get your loan approved; they will approve your online application.
They offer fixed-rate loans, and you don’t need to worry about late fees or origination fees. That means that if you settle your loan every month, you will know precisely when you will pay off your loan.
Wells Fargo: Best for High Amounts of Debts
- The online application is available, but it is only for people who already have accounts at Wells Fargo.
- You will also enjoy a discount if you already have an account with the company.
- You need a limited debt to revenue ratio.
- You will enjoy low-interest rates.
- You may not qualify if you have a bad credit score.
Wells Fargo is a reputable bank that offers a wide range of financial services, including debt consolidation. They will help you to consolidate any debt. They can provide you with up to $100,000 in loans.
Lending Club: Best for Online Applications
- Complete application procedure online
- When the loan is approved, you will get the funds in a maximum of 4 days.
- They won’t pay your creditors directly.
- Low loan amount.
- Low-interest rate.
- Fixed interest rate.
Lending Club has a relatively simple application process. And you can get up to $40,000 when you apply. You can easily know when you will settle off your loan since they have a fixed rate and fixed repayment period. They have a strict loan application criteria, and they also have tools to ensure that people do not borrow beyond their means.
Prosper: Best for People with Bad Credit Scores
- Strict application criteria.
- No prepayment options.
- No financial education services.
- Single monthly payment.
- Fixed date for monthly payments.
- Home equity options available.
Prosper is a peer-to-peer lending platform, and it offers a wide range of loans, including debt consolidation loans. Prosper offers borrowers loans at impressive rates at a fixed time. This helps borrowers to plan their finances.
Even if you have a low credit score, you are likely to access loans from the company because they have a low credit score requirement. When your loan is approved, you will be required to settle a fee.
Payoff: Best for Credit Card Debt
- Available for only borrowers with good credit scores.
- Flexible payment terms.
- You can only consolidate your credit card debts.
- Low lending amount; the maximum is $35,000.
Payoff allows you to consolidate your credit card debts at a reasonable interest rate. However, their loan terms are short. The company charges an origination fee, but you won’t settle late fees or prepayment fees.
What are the Risks of Taking Debt Consolidation Loans?
Debt consolidation is a good way of getting out of debt consolidation loan, but there are risks attached to it. It may not be as risky as filing for bankruptcy, but you should still be cautious when you want to consolidate your loan. Lots of lenders request for collateral, and you may need to use your home as a guarantee. If you are unable to settle the loan on time, you risk losing your home.
If you have a bad credit score, the interest rate may also be higher, and this means you will pay more.
Best Debt Consolidation Companies: How to Identify Them.
You must only deal with a company that complies with FTC regulations. You should also check the accreditations of the company. The accreditations are displayed at the bottom of the company’s website.
One of the prominent accreditations is the one offered by the American Fair Credit Council (AFCC) formerly TASC. This council advocate for the rights of customers. A debt consolidation loan company can only be AFCC accredited if it complies with all the regulations of the FTC. This accreditation is renewed every year.
Another accreditation that you should look out for is that of the International Association of Professional Debt Arbitrators (IAPDA). This association provides certifications for debt specialists. The employees of the company need to be trained in debt management practices for the company to receive the IAPDA certification.
The United States Organizations for Bankruptcy Alternatives (USOBA) also offers certifications for companies that meet their rigorous certification processes.
Debt Consolidation and Transparency
There are certain information that the debt consolidation companies must disclose to you before you sign up with them. They must make you aware that you are still responsible for your debt. This is essential because debt collection companies may still call you to collect the debt. They must also tell you the length of the program, your consumer rights, and the cost of the program.
Companies are not supposed to charge you upfront for their services. There are also supposed to give you an estimate of the total amount they will charge for the duration of the service they will provide so that you don’t get any surprises.
Debt consolidation companies should also not put pressure on you to reveal your personal information.
You should also know that debt consolidation bad credit company that promises to stop collection companies from contacting you are not entirely honest with you. Collection companies also have the legal right to contact you since your debt is not cleared yet.
What is Credit Counseling? Does it Help?
Some debt consolidation companies will refer you to a credit counselor if your debt is less than $7,500, and it is unsecured. The certified credit counselor will discuss your income, expenses, and savings and help you to draw a budget. They will also help you to manage your finances by giving you personalized tips and guidelines.
Can You Consolidate Medical Debt?
More people are accumulating medical bills due to the high cost of health care. This is why many people have been asking if it is easy to consolidate medical bills? The answer is yes. You can consolidate medical bills just like you do with other types of bills.