Overcoming Debt Challenges: Top Debt Consolidation Loan Providers

Overcoming Debt Challenges: 2023’s Top Debt Consolidation Loan Providers

Marcus Marion, CMA™ 9 months ago 0 18

If you’re always scouting for the best money management and wealth creation tips, you’ve likely stumbled upon many publications discouraging entering into debt. However, most of these articles issue a blanket indictment on debt without highlighting that borrowing can be good or bad. It all depends on how you utilize the borrowed funds. Compare and choose the best debt consolidation loan providers for you to get a low interest rate and pay off your debt quickly.

For instance, securing a loan to invest in a long-term project or sort out a medical emergency is okay. On the other hand, experts discourage borrowing to finance a want, such as games and toys.

Therefore, the fundamental question shouldn’t be whether you can borrow. Instead, the focus should be on why you should borrow.

And since debts must be repaid one way or another, it’s also essential to understand the best way to settle them without hurting your financial situation. One such method is debt consolidation.

Read below as we explain what debt consolidation is and how it works before highlighting some of the legitimate payday loan consolidation companies.

Discover debt consolidation

What Is Debt Consolidation?

Debt consolidation is a debt refinancing technique that involves taking out one loan to settle many existing ones. In other words, you’re merging your numerous debts for better management.

The term “debt consolidation” may vary slightly depending on the context in which it’s applied. While the phrase mainly relates to the average consumer trying to pay off many debts, it can also refer to a country’s fiscal approach to consolidating government debt.

Debt consolidation is also a common financial concept in the corporate world. The phrase may contextually be called business debt consolidation if it entails a company rounding up its existing loans and replacing them with a single loan. The new loan offers a single fixed interest rate, making the debt repayment more convenient.

How Does Debt Consolidation Work?

There are numerous debt consolidation loan providers, including Discover Debt Consolidation. There are equally many factors to consider while choosing these companies. But before we delve into that, you may want to understand how debt consolidation works.

As already mentioned, the fundamental objective of debt consolidation is to merge existing debts into a single loan. The process would typically unfold as follows;

  • Take out a new loan
  • Use the funds from the new loan to settle all your existing debts
  • Service the new loan based on the laid-out terms

What Are the Benefits of Debt Consolidation?

Debt consolidation makes it easy to pay off your debts sooner. That’s for the simple reason that the single loan will be able to settle all existing debts except itself.

Debt consolidation also provides more convenience in terms of servicing your loans. Managing your debts is easier when there’s only one to focus on.

Merging your debts into a single loan may also come with a lower interest rate. However, this will depend on the terms of your new loan. For instance, a considerable loan spread over a more extended repayment period will attract a relatively high-interest rate.

Another benefit of debt consolidation is that it significantly improves your credit score. That’s because it minimizes the risks of defaulting on your smaller loans. A higher credit score means you can always borrow again in the future to fund a business venture or a financial emergency.

legitimate payday loan consolidation companies

Factors to Consider When Looking For a Debt Consolidation Lender

1. Loan Amount

You’re primarily seeking out a loan to pay off existing debts. That means you’ll need to borrow more than your current debts’ worth.

As such, choosing a company that matches your required loan amount is important.

2. Interest Rate

Each debt consolidation loan lender advertises their interest rates. The key thing to remember here is that the lowest advertised rate may not necessarily apply to your situation.

The interest rate on a debt consolidation loan depends on factors like the borrowed amount, the repayment period, and your credit score.

3. Additional Fees

Debt consolidation loans may attract extra fees, including loan processing, origination, and late repayment fees. Remember to keep your eyes out for these additional charges to avoid unpleasant surprises.

4. Approval Requirements

A credit score is the most important factor lenders consider before approving you for a loan. Other aspects include your income and debt-to-income ratio.

5. Processing Time

Sometimes, you urgently need a loan to settle debts approaching their due dates. Therefore, the last thing you want is a company that takes forever to review the paperwork.

6. Repayment Period

Loan repayment periods generally depend on the amount borrowed. That said, it’s possible to find debt consolidation lenders that offer more reasonable repayment periods.

7. Customer Service

You’ll occasionally need to contact a debt consolidation lender to inquire about your loan repayment progress. Therefore, choose a company with highly-responsive customer support.

It’s also best to insist a lender maintain multiple communication channels, such as mobile phone, email, and online chat options.

The Best Debt Consolidation Loan Providers In 2023

1. Accredited Debt Relief

Accredited Debt Relief is a fully-accredited debt consolidation loan provider with an A+ Better Business Bureau rating. That says a lot about its credibility as a lender.

The company provides loan amounts ranging from $1,000 to over $100,000. Clients also enjoy reasonable repayment periods of up to 48 months.

Accredited Debt Relief offers free consultation and a free quote. The absence of enrollment fees explains why this company has become the go-to lender for thousands of individuals and businesses.

2. LightStream

LightStream provides debt consolidation loans designed primarily for borrowers who must pay off large debts. Depending on your needs and qualifications, you can access loans from $5,000 to $100,000.

LightStream stands out for its relatively long repayment period – 24 to 84 months.

To apply for a loan, you must submit your application online and await a response during business hours. Read the lending terms and if you agree, e-sign the form and wait to receive your funds on the same day.

3. National Debt Relief

National Debt Relief and LightStream share one fundamental thing in common – they both avail loans for different types of clients. Whether it’s personal loans, business investment loans, high-interest credit card debt, or student loans, this company has something for everyone.

But what truly sets National Debt Relief apart is that it offers up to $7,500 in unsecured debts.

The application process is quick and easy. Besides, you won’t need to pay upfront fees to secure a debt consolidation loan.

business debt consolidation

4. Achieve

Formerly known as FreedomPlus, Achieve is another reliable debt consolidation loan providers worth considering. The company maintains a massive portfolio of personal loans underwritten by MetaBank or Cross River Bank.

Achieve scores highly in terms of loan repayment period, which ranges from two to five years. It also offers considerably high loan amounts (100,000+) and fast processing times (usually within 48 hours). However, Achieve charges an origination fee between 1.99% and 4.99% of the loan amount. This might raise the total repayment amount significantly.

5. Discover

It’s difficult to discuss the best debt consolidation loan providers without referencing industry leaders like Discover. With Discover debt consolidation, you can borrow up to $40,000.

And while that may not sound like much compared to other debt consolidation lenders, it’s reassuring to know that you have up to seven years to repay. The company guarantees speedy loan processing by dispersing funds directly to third-party creditors.

Unlike Achieve, Discover loan consolidation loans attract no origination fees. The lender doesn’t impose prepayment penalties either. However, there are late repayment fees to contend with.

6. Avant

Many debt consolidation lenders are wary of advancing loans to people with bad credit. But Avant is a welcome exception.

Founded in 2012, Avant dedicatedly caters to the interests of borrowers with a less-than-perfect credit score. The lender also doesn’t impose many restrictions, making the loan application process a breeze.

Head to their official website and apply for your debt consolidation loan. You can also apply through the company’s app, available in both the Google Play and Apple App Store.

7. Upgrade

The upgrade has provided credit and banking services since its establishment in 2017. Debt consolidation loans constitute a significant part of its offerings. Upgrade debt consolidation allows you to borrow from as low as $1,000 to as high as $50,000.

Like Discover, Upgrade will directly pay your other creditors if you borrow money for debt consolidation. The lender is friendly to borrowers with poor credit scores.

However, Upgrade charges an origination fee between 1.85% and 9.99% of the loan amount.

8. Upstart Powered Loans

The last debt consolidation business on this list is by no means the least. In fact, this company is a top contender when you consider its friendly interest rates. Borrowers can enjoy up to 43.2% lower rates than other credit score-only models.

Upstart’s loans start from $1,000, with the maximum borrowing limit being $50,000. There are no prepayment penalties, and the loan application process is a breeze.

Upstart borrowers have between 36 and 60 months to repay their loans. The company also accepts applicants with bad credit scores.

Upgrade debt consolidation

Summary

There’s no shortage of debt consolidation lenders. However, these companies differ across several parameters, including the amount you can borrow, interest rates, repayment period, etc.

Therefore, it’s essential to conduct due diligence in choosing the right lender. We hope you can use this article to select the best debt consolidation loan providers.

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