If you’ve made up your own to take management of your finance, debt consolidation loans is one of the effective methods to modernize payment and also help in lowing your interest charges. This allows can cause a huge decrease in your monthly debt payments. Since personal loans come with lower rates than credit cards, medical loans, or any other forms of debt loan you can think of.
First of all, the best personal loans for debt consolidation is the one that comes with low annual percentage rates and also flexible repayment terms. Also, you need to find a debt consolidation loan that offers no extra fee on prepayment penalties. Learn more about debt consolidation loans.
What is Debt Consolidation
Debit consolidation serves as a process whereby multiple debts that include debts loan from things like credit cards, medical loans, and other forms of debt are accumulated into a single payment. This ensures people pay their debt faster and also monitor the debt you have left.
There are so many companies that offer debt consolidation services. Most time you can consider doing it (debt consolidation) yourself with rick in one of two ways. This implies transferring all your debt to a 0% interest rate or you can decide to acquire a debt consolidation loan.
How does it work?
A debt consolidation loan is among your personal loan that helps reduce high-interest debt by combing multiple debts into a new loan. The benefit of debt consolidation is that it allows you to enjoy lower interest rates when you combine multiple debts.
Meaning, you can pay off all the people you’re owning money with just a single loan that comes with a fixed monthly payment. If you manage your finance very well, you can even save money on interest with a debt consolidation loan.
The way the debt consolidation loan work is very simple. All you need is to borrow the amount of money that you owe on your existing debts. When your loan is been approved, you receive the money and you can use it to clear off your loans.
List of Best Debt Consolidation Loans
SoFi
SoFi is the best overall debt consolidation loan with a minimum credit score of 680 to acquire loans. The APR Range offered by SoFi is 4.99% to 18.13% with autopay. The loan amount offered ranges from $5000 to $100,000.
Upgrade
For bad credit scores, the Upgrade is the best option to go for with a minimum credit score of 580 to acquire a loan. APR range of 5.94% to 35.97% and loan amounts of $1,000 to $50,000.
LendingClub
The LendingClub is best for peer-to-peer lending with a minimum credit score of 600. A APR range of 7.04% to 35.89% and loan amounts of $1,000 to $40,000.
FreedomPlus
According to Forbes Advisor, FreedomPlus is rated 3.5 and it is considered best for paying off credit card debt. The required minimum credit score is 620 and it offers an APR range of 7.99% to 29.99%. The loan range offered by FreedomPlus is $7,500 to $40,000.
Discover
Discover is best for a minimum annual income of $25,000 and it’s rated 3.0 with a minimum credit score of 660 to get a debt consolidation loan. The loan amount offered by Discover ranges from $2,500 to $35,000.
If you want to find out more, you can visit Forbes Advisor, NerdWallet to find out other lists. Plus, there are factors to consider in comparing personal loans for debt consolidation or to compare the best debt consolidation loans.
This includes the annual percentage rate, origination fees, lender features, and more. Also, the best ways to consolidate debt include debt consolidation loans, balance transfer credit cards, home equity, and 401(k) loans.