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May 2022

Best Debt Consolidation Loans in May 2022

Results for - May 2022

Debt consolidation loans enable you to manage your most pressing debts quickly and efficiently. Lendstart reviews reputable debt consolidation lenders and allows you to quickly see the loans they provide along with the main benefits to each.

Best Debt Consolidation Lenders in 2022

 

Accredited DR

Accredited DR specializes in helping borrowers with multiple high-interest loans. Instead of simply supplying a loan, they may also help negotiate with debtors on your behalf.

Century

For those who value high-quality professional help and strong customer support, Century might be the best debt consolidation, lender. They are one of the largest debt consolidation companies and have helped 250,000+ customers with over $1.3 billion in debt. Part of their 3-step program includes a free assessment with a certified specialist. Currently, they do not charge money unless they can help resolve the outstanding debt.

Freedom DR

After a free phone consultation with Freedom DR that includes a complete debt evaluation with a debt expert, borrowers can decide whether to enter into a program that helps with outstanding debts for less than the total amount owed. For those who owe a debt that is in the collection or who want to eliminate credit card debt and close accounts, this type of debt elimination plan may serve as a single point of contact with a company that works with all creditors.

ClearOne

ClearOne offers a variety of debt consolidation solutions, including credit counseling, debt consolidation loans, and counseling about bankruptcy options. There are no upfront fees, and the company has an A+ rating with the Better Business Bureau (BBB). They offer a personalized debt plan including potential savings to help borrowers decide the right course of action.

Debtmerica

Debtmerica understands the financial stress their clients are under. They specialize in alternative solutions and making the process as easy as possible. They offer a free consultation, a money-back guarantee, do not charge upfront fees, and offer affordable monthly payment plans. Even without meeting the minimum $10,000 debt to be eligible for their services, their specialists may help guide or suggest alternatives like credit counseling.

What to Consider When Choosing a Debt Consolidation Service?

Money Upfront

Most debt consolidation companies will ask for a partial upfront payment, which vary widely between debt consolidation companies. On the other hand, some debt consolidation companies do not have any upfront charges at all. Be aware of upfront payment requirements while comparing services.

Certified Debt Specialists

Expertise is important when it comes to resolving outstanding debt. Certified debt specialists often use their experience to find the right solution for a given situation. The best debt consolidation companies will offer a free consultation with certified debt specialists.

Online Reviews

Online reviews include professional reviews similar to those available on Lendstart. Additional business reviews are available on platforms like the Better Business Bureau. Both resources will provide insight into customer satisfaction following an interaction with the company, as well as the potential pros and cons of each company.

Interest Rates

Like all loans, debt consolidation loans come with interest charges. Interest rates vary between providers. Lenders will consider personal credit history alongside other factors.

Loan Term

Although longer loan terms often result in smaller individual payments, one will likely end up paying more due to the accumulating cost of interest. Choose the company with the best manageable loan terms for each individual situation.

Fees and Penalties

Lending and debt consolidation products may carry different fees and penalties. Consider the fees that each company charges for loan applications and more.

Education
Since debt is common in the United States, learning about debt consolidation can be useful for managing current loans and attenuating the probability of falling into more debt.

What to Know Before Pursuing Debt Consolidation

There is a lot of information to gather before starting to reach out to debt consolidation companies. Following a debt consolidation guide as a tool is useful. Below, we have summed up a few important things to know.

Free Consultations

Good debt consolidation companies will offer similar advice to one another. That is why an initial free consultation is standard practice in the industry.

Expect a Decrease in Credit Score
Credit scores will likely take a small hit during the debt consolidation process.

Expect Fees
Despite having a lot of high-interest debts to deal with, the fees charged by debt consolidation companies may be worthwhile. Sometimes they may suggest alternatives that they deem are more appropriate.

Debt Consolidation Isn’t a Silver Bullet

Debt consolidation can save money. However, it is important to practice restraint moving forward. Consider avoiding credit cards and borrowing money with high interest. Without an actionable long-term plan, debt consolidation simply provides temporary relief.

Not All Overwhelming Debts Must Lead to Debt Consolidation

Some debts, like credit card debt, can be well-remedied by debt consolidation loans. However,  sometimes it is better to work directly with debtors. For example, medical debts are often eligible for reduction or elimination, which can result in faster and cheaper resolution than the alternative. The IRS allows for low-interest payment plans based on income and current financial situation. Try to investigate multiple options for affordably paying accumulated debt before resorting to debt consolidation.

Debt Consolidation Loans Are Not Always the Best Option

The reason many debt consolidation companies have a “minimum debt requirement” is because comprehensive debt consolidation services are labor-intensive and demanding. Hence, those services cost money.

Reputation Is Important – Beware of Scams

Unfortunately, like other financial service sectors, debt consolidation attracts a lot of scammers. Be thorough while researching and comparing debt consolidation companies that leave their customers with a sense of trust and confidence. Only work with the companies with histories of helping customers shake off their debt.

Red Flags that Indicate the Company May Be Scam

Watch out for debt consolidation companies that make huge promises. Some red flags may include:

  • Total upfront fees
  • High-pressure and aggressive sales tactics
  • A lack of transparency regarding fees
  • No presence online and no real contact information

The Benefits of a Debt Consolidation Loan

Fast Repayment

A debt consolidation loan enables one to resolve their debts with the original collectors quickly and move the debt to a different collector with better terms. With serious credit card debt, this is especially important.  When these issues become real, there are tools to prevent a snowball effect. Debt consolidation loans allow for minimizing damage before it becomes uncontrollable.

Simplify Finances

Debt consolidation loans combine multiple pesky little debts into a single more easily managed debt. There is one loan, one interest rate, and one repayment schedule. Handling multiple debts can be mentally taxing and energy-consuming. Debt consolidation increases the chances of managing debt and reduces the risk of failed or missed payments.

Lower Interest Rate

When there is one simple loan, it is possible to save money with a lower interest rate. Credit card interest is notoriously high, normally averaging around 19.99%. By paying that off with a debt consolidation loan, it is possible to focus on one loan that has a lower interest rate. While the debt consolidation loan interest rate will vary, typically, it costs less than credit card payments.

Repair Damage to Credit Score

Debt consolidation services often hurt credit scores at the onset. However, in the long run, they could have a net positive effect when utilized properly with appropriate financial planning. Successfully paying loans back on time will likely be rewarded with a positive credit score. Since debt consolidation loans make it easier to repay debts on time, they are a great resource for improving credit scores.