Author: Britanny Holand
Debts can be frustrating, especially if you have no control over them. The worst consequence you can experience is the negativity it may bring to your happy life.
For that reason, debt consolidation loans are becoming more popular. They are an effective way to have better management of debts.
Each debt consolidation loan option comes in varying benefits and advantages. Generally, they offer a seamless solution for paying debts faster and reducing the interest rate.
What is debt consolidation?
Debt consolidation works exactly how it sounds. To be specific, it is a debt management strategy that incorporates one or multiple debts into another form of financing.
Debt consolidation involves either a credit transfer or taking out another loan to pay off prior debt.
While getting another loan to pay off the existing one seems like a daunting solution, it is smart if you get a loan with better terms.
That said, it is ideal to consider essential factors when taking a loan, so that you can attain the goal of consolidating your debt and simplifying your finances.
Even though the concept of debt consolidation is not perfectly created, the advantages it can offer make it worth trying.
Top 4 Debt Consolidation Loan Lenders
Debt consolidation is taking a personal loan to cover the existing loans. Primarily, it is about replacing your multiple loans with a single loan so it will be more manageable.
Let’s consider top options for debt consolidation.
1. LightStream
LightStream offers competitive personal loans that can be used for consolidating debt. What makes it great is that it comes with flexible and appealing terms for the loans.
At the same time, it has low competitive rates and doesn’t include prepayment or late fees on a loan agreement. It can offer up to $100,000 and a term of up to 84 months. You can get a higher loan if you have excellent credit, fine assets, and a steady income.
Pros:
- High loan with longer repayment terms
- No penalties
- Fast approval
- Low and competitive interest rates
Cons:
- No prequalification option
- The due date is not flexible
- Limitation of loan proceeds
2. Best Egg
Best Egg is specifically for high-income earners. This firm requires a high credit score, and the loans can range from $2,000 to $50,000.
Pros:
- Flexible due date
- No penalty fee
- Low minimum APR
- Favorable term lengths
Cons:
- Charges an origination fee
- No direct payment options
3. Discover
Discover can offer loans for debt consolidation starting from $2,500 to $35,000. What makes it a good option is that the loan terms can be extended to seven years. By extending the loan period, you can efficiently lower the interest rate. On top of that, it is convenient to take a loan from Discover because it offers online applications and mobile banking tools.
Pros:
- Large range of repayment terms
- Has an option to pay creditors directly
- No origination fees
Cons:
- Charges late payment fees
- No payment discounts offered
- Co-signers are not permitted
4. Marcus
This lender offers personal loans between $3,500 and $40,000. That’s a little amount, but if it fits your needs, it makes a great option. The flexible loans can have terms ranging from three to six years. With its loan terms, you can effectively consolidate your prior loans without incurring additional costs.
Pros:
- No origination and late payment fees
- Borrowers can change due dates multiple times
- Has direct payment option to creditors
Cons:
- No co-signers are allowed
- Does not offer student loans
- Strict minimum credit score requirement
Takeaway
Debt consolidation can benefit you in several ways. It can be a wise solution to multiple debts management and achieve a good credit score. On the other hand, if you are hesitant about the idea of owing too much and the responsibility of repaying debt for a long time, it is not the solution for you.