Not being able to repay a loan, a credit card debt or any other kind of debt is a scary situation, but guess what? It doesn’t have to be, thanks to the companies specializing in debt consolidation. Here are nine of the best companies in that field right now.
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If you’re looking to lower your monthly payments and improve your credit score in a single swoop, a debt consolidation loan might just be the right answer. Take a look at our list of criteria that you should keep in mind when trying to consolidate all your smaller debts into a single one with a more favorable interest rate.
Interest rates are our constant number one criterion and you should definitely opt for a fixed variety when it comes to consolidating your debts. They offer predictability, which is extremely important for longer lending periods.
APR ranges from 5% and goes all the way up to 40%. Finding the lowest possible APR is definitely crucial, especially in the world of unreasonable charges going even up to 155% with some lenders. This is pretty self-explanatory – the lower the total costs, the better.
Origination fees are the biggest charges you’ll encounter with loans for debt consolidation alongside interest rates. These are basically administration fees charged for setting you up with a loan. They range between 0% and 6%.
Hidden charges and fees shouldn’t be “hidden” per se and they should be reasonable. Here, we include fees for check processing, prepayment, late and unsuccessful payments, and so on. Note that these fees will not be included in your total APR.
Choosing a good lending institution is particularly important due to the overall “weight” of the debt consolidation loan. These include banks, credit unions, and online lenders. We would recommend going with online lenders because they’re widely available, easier to navigate than banks, andoffer better terms.