A debt consolidation loan can offer you a way to get organized and pay off your debt faster. Put simply, it’s a loan from a company that pays off all your current debts and loans so that you have one fixed payment with a lower interest rate and longer payment term.
This isn’t always the best option for everyone, but for some, it can be the answer to paying less interest and getting rid of debt sooner.
You can use ReadyforZero to compare each loan or credit card that you have, their interest rates, what options you have for debt consolidation and whether it can save you time and money in the long run.
Once you’ve crunched the numbers and determined that debt consolidation is right for you, you then have to face the daunting task of finding a trustworthy company that offers debt consolidation loans. There are several different debt consolidation programs that might work for you, but reputable online lenders make the process quick and easy.
That said, it can be a tedious process and incredibly overwhelming to find a company to trust when a quick Google search turns up so many companies offering similar services. Don’t get scammed by online companies that complicate the process and tack on costly services that you don’t want or don’t need.
Top-Rated Debt Consolidation Loan Companies
To help you narrow down your search and learn more about different online lenders, here’s a quick breakdown of the top three online lenders for debt consolidation loans.
Eligibility: Available in 46 states; minimum credit score of 580
Amount: $1,000 to $35,000
Interest rate: 9.95% to 36%
Repayment Term: 12 to 60 months
Avant is your best bet if you don’t have a high credit score since they also consider income when determining your eligibility. They directly fund their loans, so the application and approval process is fast and easy. A major benefit of using Avant is that the money can be deposited directly into your account as soon as the next business day.
Eligibility: available in 47 states; minimum credit score of 640
Amount: $2,000 to $40,000
Interest rate: 5.99% to 35.89%
Repayment Term: 36 or 60 months
Fees: origination or “closing fee” of 1% to 6%; late fees are $15 or 5% of outstanding amount (whichever is larger); failed payment fee is $15
Prosper was the first peer-to-peer lender on the market offering an alternative choice to traditional loans. Peer-to-peer lending often offers lower interest rates than traditional loans because it basically cuts out the financial middleman like a bank by instead providing the loan from several individual investors. It can take about a week for your loan to get approved (accepted by investors), but funds are transferred within 1 to 2 days after your loan is approved. While you have to have a minimum credit score of 640, many other factors besides credit history can determine your APR.
Eligibility: Available in 46 states; minimum credit score 660
Amount: $2,000 to $35,000
Interest rate: 5.99% to 32.99%
Repayment Term: 36 or 60 months
Fees: origination or “closing fee” of 1% to 5%; late fees are $15 or 5% of outstanding amount (whichever is larger); failed payment fee is $15; check-processing fee of $15 if you pay with check
Lending Club, like Prosper, is a peer-to-peer lender, so it can take over a week or so to process your loan application, get approved, and receive your money. It offers similar rates and fees to Prosper, though it has slight stricter eligibility requirements, so it may offer more competitive rates for its more qualified applicants.
How To Get Started With Your Loan Application
Prosper, Avant, and Lending Club have been consistently rated the top 2015 debt consolidation online lenders and are all accredited with the Better Business Bureau. They are also trusted partners with ReadyforZero, so start a quick and easy loan application here to compare your pre-approved consolidation offers. The application will NOT affect your credit score, so there’s no harm in exploring all available options for making it easier and faster to get out of debt.
If you sign up for ReadyforZero, you can get a free online plan for paying off your debt. You’ll also see the specific dollar amount you are paying in interest on any credit card or loan and whether you might save on each loan with a debt consolidation loan.
For additional information about debt consolidation, please visit our Debt Consolidation Resource Center.