3 Best Debt Consolidation Loans of 2019

Debt consolidation means to pay off your existing loans by taking one single loan which suits your requirements. It is the best way to streamline the entire repayment process.

Lower interest rates and a low monthly installment are two of the biggest why people opt for a debt consolidation loan. You have a higher chance of getting your debt consolidation loan approved if you have sufficient assets that you can let the lender use as collateral against the loan. This is known as a Secured Loan as the lender has an option to recover money if you fail to repay.

consolidation loan

But with Unsecured debt consolidation loan, the lender has to take a risk by lending you money. If you fail to repay, suing you is the only option the lender is left with. Hence, this loan has a high-interest rate and are difficult to get approved unless you demonstrate a steady flow of income.

Here are the 3 best debt consolidation loans 2019

1. Lending Club

Get your life back on track by applying for a debt consolidation loan online with Lending Club. Lending Club is known for it’d credit card debt consolidation plans which allow users to clear their debt by paying a fixed monthly rate.

Applying for a debt consolidation loan with Lending Club is easy and hassle-free. Apply for a loan online by giving some basic information like the amount you are looking to borrow, your name, address, etc. Once you are done with this, you will get plenty of plans to choose from. Your money gets deposited in your bank account without having to do anything else.

2. Marcus by Goldman Sachs

Debt consolidation loan by Marcus might be the best option for you have a good credit score(above 660) and want a flexible loan term. Marcus is a brand of Goldman Sachs which is headquartered in Salt Lake City.

They lend anything between $3,500 – $40,000 with an APR of 5.99% – 28.99%. Similar to Lending Club, Marcus also deposits the money in your bank account within 1-4 business days(from approval date). They do conduct a soft credit check with credit bureaus like TransUnion to verify your credit score and check your credit history. 

3. OneMain financial

OneMain Financial is a lender headquartered in Pennsylvania. Like Lending Club, OneMain Financial also provides a fixed interest rate, one monthly payment and an option to roll all the debts into one single unit.

To get approved for a debt consolidation loan with OneMain Financial, you need a copy of a valid, government-issued ID, proof of residency and proof of income. You can also ask for a lower monthly payment which they will approve after careful evaluation of your credit score, credit history, income details, etc.

Summary

To reiterate, a lowered interest rate and one fixed monthly payment(which does not change with time) are two of the biggest benefits of applying for a debt consolidation loan. “No matter how small or large the principal loan amount is, you are expected to pay off the entire debt within 3-4 years,” says Harrine Freeman, best-selling author of How to Get out of Debt: Get An “A” Credit Rating for Free.

Debt Consolidation- A Healthy Idea or Not?

Debt consolidation

Given the dynamic nature of the market, there is a certain possibility of reaching a point where the debtor may be in the danger of bankruptcy, insolvency or another fiscal emergency may always linger in the horizon. The options available for a bailout at such point are often limited. This is where the debtor can take a plunge of opting debt refinancing that entitles one to take a single loan to pay off the smaller ones, in other words, Debt Consolidation.

Lending institutes such as Fast Track Debt Relief offer debtors a recourse to repay loans by providing them the option of debt consolidation. The Consolidated Debt is mostly a second mortgage or home equity line of credit. This requires the home to be put up as collateral and the amount of loan being less than that of equity. In certain countries, these loans may also provide certain tax benefits to those who itemize their deductions in case of home equity line of credit.

The perks of Debt Consolidation Programs is that they help consumer consolidate wisely by providing a relatively lower interest rate and helping them pay off debt faster. They can also help the consumers in managing the repayment to minimize the chances of late or missed payments. More often they have a fixed cost to process payments and the repayment can be spread over a longer period. However, such programs may consist of costs such as fees, interest, and points where one point equals to approximately one percent of the loan amount.

Other options to consolidate debt can be ‘balance transfer’ where you can transfer the balance onto a single card with 0% interest for a set time period. It should be taken into account that in such cases the terms and conditions should be read carefully for all the loopholes. In the recent years, peer to peer consolidation is widely used that allows individuals to lend loans to each other. Peer to peer companies help connect people which need loan with ones that can invest a certain amount. This is seen as a win- win situation for the both the parties.

People with numerous debts struggle with higher minimum payments which leads to the domino effect where, you miss payments, interest rate gets raised and you struggle to stay afloat. Debt consolidation can become a powerful tool to help you take control and collate debts that are not tied to an asset. It  helps structure all your debt payments into one single payment thus, helping you keep your head above water.

Debt Consolidation – Is it right for you?

Debt ConsolidationThere are many different ways to approach dealing with debt problems. For each person, it will be down to their individual circumstances and the amount they owe which path they choose when working to clear their debts.

One option that you hear a lot about is debt consolidation. This is where a number of unsecured debts can be paid off at a stroke by taking out a new, larger loan that will cover all the smaller debts. This is a debt consolidation loan and is one way to manage debt.

Benefits of Debt Consolidation

Debt consolidation can add clarity to your debt situation. Instead of having numerous creditors to pay back different amounts each month, you will have the simplicity of making one monthly payment to the debt management company or other organisation that has financed your consolidation loan.
The debt consolidation loan will often have a lower rate of interest than you have been paying on credit or store cards, and the monthly payment is likely to be lower as the repayment period will be longer. It won’t work out to be cheaper overall, but you’ll feel less pressure, as long as the repayment schedule has been designed to work with your household budget.
The clarity and lack of administrative hassle will no doubt improve your stress levels – and your sleep at night.

Disadvantages of Debt Consolidation

Some people who take out a debt consolidation loan think of it as wiping out their previous debt. This is dangerous territory, because, while it may free up your ability to use your credit cards again, in fact all a consolidation loan does is move debt all into one basket. It is still there for you to pay back, but because you have the freedom to use your cards once you have cleared any debts on them, you may fall into the trap of spending more than you can afford again.

So, is it right for me?

Using a debt consolidation loan will cost you more than just paying off existing debts, but it can give you the breathing space you need to get the debts paid off. As long as you have a strong self-discipline and can avoid the temptation of spending until the debt consolidation loan is paid off, it may be an appropriate solution for you. Always seek independent financial advice before entering into any agreement.

Have you considered debt consolidation?

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Manage Debt Before It Manages You

manage debt

The old saying goes that debt has its way of creeping up on us without us really even knowing it and this post will be about how to manage debt.  Now a days we are so quick to pull out our credit card or debit card to make a purchase.  To manage debt we need to really look close at what we are spending our money on and really track it.

It is important to keep debt at reasonable and manageable levels or we could end up incurring high interest rate charges. Even worse having barely enough money to pay the minimum payments on our credit cards.

Where Do You Turn For Help to Manage Debt?

The first course of action to manage debt is to look into creating a budget to track where your money is going, there are many free budget templates available online that you can use. Finding areas that we are spending frivolously we can explore to find any savings which will help us manage debt. Occasionally there are times when there just are more expenses than revenue that is coming in, maybe we have gone too far off the deep end and we cannot solve our debt by budgeting.

In Comes The Consumer Debt Management Professionals

Now that we have realized that we cannot tackle our debt problem on our own, we are in a situation where we need outside help. It is very hard to ask someone you know for help, especially for debt management help. If you don’t want to ask someone, you can always teach yourself by receiving an accounting associates degree which will help you take control of your finances for good.

If you do not gain control over your debts, there are many things that can be impacted by your negligence. Your debt problems could impact your credit rating, potential job opportunities might vanish, and even your health. It is important to manage your debt before it manages you and it is too late!

Manage Debt: Debt Consolidation or Credit Counseling?

Occasionally debtors will turn to a debt consolidation company thinking that they are the answer to their debt problems.  What typically a debt consolidation company does is they may transfer all your debt to a lower interest rate credit card or maybe tap some of the equity in your home to get money to pay off the consumer debt.  If you close the accounts that you had open in favor of the lower interest rate card you could actually negatively impact your credit report as you are raising your debt to available credit ratio.  If you do take this route keep the other credit lines open just do not use the credit cards.  Make sure that if you do tap your home equity you are not in any risk of default as the last thin you want to do is put your house on the line for your poor debt management choices.

Credit Counseling is another popular option to managing debt.  By taking the credit counseling agency approach they offer various ways to help you including financial management, setting up a budget and debt management plan.  The debt management plan involves the negotiation with the creditors on your behalf to try and gain more favorable terms.  The debtor will then make the monthly plans to the credit counseling agency and they will make the payments to the creditors on behalf of the debtor.

This can typically get you out of debt faster but there can be negative consequences on your credit report.  There will be a notation on your credit report that you are in credit counseling and this will negatively impact your ability to open new lines of credit.  Before taking this route make sure that you know you are dealing with a reputable credit counseling agency and understand your responsibilities as part of the debt management plan.

An  overabundance of debt can wreak havoc on our finances and our credit scores but if you manage debt you can stop it before you spiral out of control, which brings me to another point.  Once you are done with your debt repayment, consider starting up an emergency fund.

Manage Debt Before It Manages You!

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