Debt consolidation loans are used to pay off existing debts and merge multiple accounts into one account with one lender and one single payment.
Depending on your credit standing, you may be able to get a debt consolidation loan with a lower interest rate compared to the existing debts you are currenty paying off. Getting a debt consolidation loan with a lower interest saves you money on overall interest.
If you want a lower monthly payment, you can consider getting a long term loan. However, since you’ll be paying it off for a longer time, the interest rate will be higher.
Which debt consolidation companies are good?
The U.S. News have conducted a research examining lenders that offer debt consolidation loans. The research on “best debt consolidation companies” was largely based on each company’s qualification requirements, fees, terms, repayment methods, and other features.
Best Lender for loans with co-signer option
LightStream is the best option for this category. The company provides loans up to $100,000, and accepts co-signers.
Best Lender with no loan fees
Marcus by Goldman Sachs offers fixed-rate unsecured personal loans for up to $40,000. Loans with this lender have no origination, prepayment, and late fees.
On top of that, if you complete 12 or more monthly payments in full and on time, you can defer a payment interest free for a month.
Best Lender for up to a 50% debt-to-income ratio
For borrowers with a debt-to-incone ratio of up to 50%, Prosper is the easiest company to get approved for a personal loan.
Borrowers can get loans ranging from $2000 to $40000 with three to five years loan terms.
Best Lender with a low minimum loan amount
Upstart wins in this category. Borrowers can get a personal for a small amount as $1,000 and up to $50,000.
Best Lender for long loan terms
Discover offers personal loans that can be used for debt consolidation, home improvement, and major purchases. Loan terms from three to seven years are available and you can get up to $35,000.
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