Are you tired of having too many different small debts? Are the credit cards becoming too much to handle? Well, you can now apply for a debt consolidation loan to round up all your credits. Debt consolidation is basically borrowing enough money from a single lender and using it to offset all other small loans so that you are left only with one big loan.
Features of the Best Consolidation Loans
When hunting for a debt consolidation loan, there are some things that you must look out for, to secure a customer friendly loan. Among the factors shared by some of the top debt consolidation loans are:
- Flexible repayment period. The longer the repayment period, the better the consolidation loan. Top consolidation loans always strive to offer longer repayment period that is friendly enough to the borrowers.
- Friendly interest rates. When looking for an organization to finance your loan consolidation, always settle for the lowest interest rate debt consolidation loans. That way you will end up paying less amount than what you would have had you not consolidated.
- Average credit score requirement. Firms offering debt consolidation loans have a credit score as part of their requirements before they offer the loans. Check out the credit score requirement and see if you qualify to apply for the loan. As a general rule, better credit scores attract better interest rates. Persons with good credit scores tend to attract lower interest rates.
- Achievable additional requirements. Different organizations have different requirements for customers wishing to apply for a debt consolidation loan. These requirements may range from credit score, having collateral to having a cosigner. Such requirements should be carefully considered before settling for a particular firm. It is always better to apply for consolidation in a firm whose requirements you can comfortably meet without straining.
- For a debt consolidation loan to qualify as one of the best credit consolidation loans, the loan must be offered by a legitimate organization. Always do a proper background check on the lender before signing the agreement. Go through the customer reviews and feedback to get an understanding of what the public feels about the loans.
Having gone through the features of the best debt consolidation loans, let us have a look at some of the loans that meet the bar of top rated debt consolidation loans.
- Best egg personal loan
This loan is unsecured, meaning you will not have to produce any collateral. The APR ranges from 5.99-29.99% with a repayment plan of between 3-5 years. Part of the requirement to qualify for this loan is to have a credit score of at least 640, a low CTI ratio preferably below 20% and an income of $40,000.
- Lending club personal loans
To secure this loan, one must have a credit score of at least 600 and a good credit history. The customer is also required to have a reasonably low CTI ratio.
- Marcus Personal loan
Marcus offers the best rate for debt consolidation loans. It has one of the lowest credit score requirement of at least 580, a longer repayment period of up to 72 months and no other hidden charges.
- Prosper personal loans
For those people with a relatively bad debt to income ratio, Personal loans from Prosper might be ideal for you. This firm offers loans to people with a DTI of up to 50%. This percentage is way high than what the competitors have to offer.
- A personal loan from Upgrade
If you have low income and still wish to access a debt consolidation loan, get in touch with Upgrade. They offer low income debt consolidation loans. With just a monthly cash flow of about one thousand dollars, a minimum credit score of 620 and a DTI not exceeding 40%, you will be able to secure yourself a loan. By offering loans with an APR of as low as 5.96%, Upgrade loans are undoubtedly one of the best low interest personal loans for debt consolidation.
A Comparison of the Best Lenders for Debt Consolidation Loans
Why Should You Consolidate Debt Loans?
Many people have been wondering if there is actually an upside to consolidating debt. Well, there are advantages and disadvantages of loans consolidation. These are;
You should carefully scrutinize the pros and cons before settling for a debt consolidation loan.
Where Can I Get Low Interest Debt Consolidation Loans?
One of the main reasons people consolidate their debts is to avoid the heavy interest charges on the other small loans like the credit card loans. The best banks for debt consolidation loans almost always offer such loans at a low APR. Normally the interest rates for debt consolidation loans range from as low as 5.9% to as high as 42%. Always stick with the loans whose APR you can manage.
As for debt consolidation, online lenders are way better than the traditional banks regarding turn-around-time of their service delivery and ease of accessibility. However, when looking for loans with low interest, check out credit unions or some of the local banks. Loans from these institutions may attract lower interest rates in exchange for collateral or a cosigner requirement.
In both cases, your credit score, past credit history, and income levels greatly influence the APR you will be given. It is therefore prudent to take care of your credit ratings.
As you think of consolidating your loans, carefully go through the features of the loan you are planning on borrowing before you append your signature on the contract.