One of the most frequent uses of a Personal Loan is debt consolidation. It lets a borrower to pay off his numerous debts turning them into one convenient repayment at affordable rates and flexible terms. Debt consolidation Personal Loans are highly available, even for bad credit borrowers both online and in-store. Compare the offers from the top direct lenders.

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Table of Contents:

What is Debt Consolidation?

Debt consolidation vs. debt settlement

What is a debt consolidation loan?

How does Debt Consolidation work?

How much could I save with debt consolidation?

How do I choose the best debt consolidation, loan lender?

Best Debt Consolidation Loans

Debt Consolidation Loans for bad credit

Unsecured Debt Consolidation Loans

Personal Loans for Debt Consolidation

Guaranteed Debt Consolidation Loans for bad credit

Why consolidate your debt?

Benefits of debt consolidation

What types of debt can I consolidate?

What happens after I consolidate my debt with a personal loan?

Will debt consolidation affect my credit score?

Is Debt Consolidation a good idea?

Alternatives to a debt consolidation loan

What is debt consolidation?

Debt consolidation allows you to roll in multiple high-interest debts into one loan. Typically, you are going to have a lower interest rate this way because you are consolidating everything into one place, and you will have one predictable monthly payment.

Debt consolidation vs. debt settlement

While both strategies are meant to decrease your debt load, their functionality differs from one another in a way that debt settlement is useful for decreasing the total sum of the debt one owes. In contrast, debt consolidation helps you reduce the total sum of creditors one owes.

What is a debt consolidation loan?

A debt consolidation loan allows you to take out a new loan to pay off other loans, liabilities, or customer debts that are generally unsecured, and hence high-interest debts. This way, more than one debt or multiple debts are combined into one single large piece of debt that comes with a favorable term structure, a lower interest rate, a lower monthly installment, or a lower tenure.

The debt consolidation loan amount is then used to pay off all the other debts.

Debt consolidation loans are the type of cash advance used to simplify the process of paying off multiple debts from credit cards, high-interest loans, and other bills and turn them into one monthly payment. It allows borrowers to save money by lowering the rates and pay the loans back faster and easier.

Among other benefits of debt consolidation loans are:

  • Lower interest
  • Fewer payments
  • Simpler repayment process
  • Flexible terms
  • Making a repayment plan
  • Paying debts on time

How does Debt Consolidation work?

Debt consolidation loans don’t differ much from the usual cash advance. See how they work:

  1. You look through your existing debts and decide which you want to consolidate;
  2. Check the possible debt consolidation offers and compare their programs;
  3. Set the repayment plan with convenient monthly payments and start paying off your debts.

How much could I save with debt consolidation?

Debt consolidation is a popular choice as it allows you to pay off your debt at a lower interest rate, saving you loads of money while enabling you to pay off your debt faster. Instead of keeping track of multiple monthly debt installments, the debt consolidation loan enables you to combine all debt into one fixed monthly installment with a fixed rate of interest, which is why the overall net effect is positive, and you can save money too.

How do I choose the best debt consolidation, loan lender?

Find yourself a debt consolidation lender who will give you the best interest rate possible. Your objective is to find the best consolidation loan lender who allows you to go from a 20% to 30% interest rate on a few separate accounts to one account where you will have a low-interest rate. When you find your debt is stocking up, you can still pay off your debt by finding the best debt consolidation lender instead of losing hope.

Best Debt Consolidation Loans

If you like many other US residents are looking for ways to get your debt under control, consider debt consolidation loans. They are sure to lower your debt and help you pay it off faster. One fixed monthly payment at lower APR is definitely easier and more convenient than multiple repayments at various rates. Mostly Personal Loans are used for consolidating debts as they provide good terms and finance charges. Choose any of the offers below to help you solve your financial hardships. Compare their rates, terms, and other conditions:

LendYou will help you get the cash you need when you need it. You can apply for Payday Loans, Installment Loans or Personal Loans, etc. Compare the lenders and get matched with the best one.

  • MIN Loan Amount: $100
  • MAX Loan Amount: $35000
  • Terms: Varied
  • Rates and fees: Starting at 4.99% APR
  • Turnaround Time: 1 business day
  • $100 - $1000 Payday Loans
  • $1000 - $5000 Installment Loans
  • $5000 - $35000 Personal Loans
  • 18 years of age or older
  • U.S. citizenship
  • Valid checking or savings account with direct deposit
  • Minimum regular income of $1,000 per month
  • Not be a regular or reserve member of the Air Force, Army, Coast Guard, Marine Corps or Navy (or be a dependent of someone who is,) serving on active duty under a call or order that does not specify a period of 30 days or fewer.
Pros
  • High up to $15,000 loan amounts. 
  • Minimal restrictions on how you can use your loan.
  • No collateral or guarantor.
  • Bad credit is OK. 
Cons
  • It's not a direct lender, so you'll need to clarify rates and terms with the company you are matched with. 

 

Instant Loans USA will help you get the cash you need when you need it. You can apply for Payday Loans, or Personal Loans online. Choose the best rates and terms and get the same-day financing.

  • MIN Loan Amount: $100
  • MAX Loan Amount: $35000
  • Terms: Varied
  • Rates and fees: Starting at 4.99% APR
  • Turnaround Time: 1 business day
  • $100 - $1000 Payday Loans
  • $5,000 - $35,000 Personal Loans
  • 18 years of age or older
  • U.S. citizenship
  • Valid checking or savings account with direct deposit
  • Minimum regular income of $1,000 per month
  • Not be a regular or reserve member of the Air Force, Army, Coast Guard, Marine Corps or Navy (or be a dependent of someone who is,) serving on active duty under a call or order that does not specify a period of 30 days or fewer.
Pros
  • High loan amounts up to $35,000. 
  • Minimal basic requirements.
  • No collateral or co-signer.
  • Bad credit is OK. 
Cons
  • High interest rates.

 

Greenlight Cash created an online platform to connect consumers like you with reliable lenders across the country. They partner with a large network of professionals so you get a chance to work with one of them and meet the challenge of improving your financial situation in the most effective way. Once you tap submit, you get one step closer to receiving the funds.

  • Payday Loans
  • Installment Loans
  • Personal Loans
  • be a legal U.S. resident
  • be at least 18 years old
  • have a stable source of income
  • be currently employed
  • have an active bank account
Pros
  • Unrivaled flexibility and accessibility.
  • Predictable monthly payments

  • Quick and simplified borrowing process

  • Any credit is welcome
Cons
  • Not a direct lender.

 

Debt Consolidation Loans bad credit

Though being approved for a debt consolidation loan may require some effort it’s still highly possible. All you need is to look for an online lender or credit union providing such loans regardless of your credit score. Applying online you should understand that most companies will consider your job, income, and even education rather than credit history – so, you have great chances of approval.

Read more: Bad Credit Personal Loans

Choosing a bad credit debt consolidation loan make sure that it has a lower interest than your existing debts.

In order to increase your chances of getting a loan for consolidating debts with bad credit you can follow the expert advice:

  • Check your credit history regularly and do your best to keep it correct and improve the score;
  • Apply for a secured debt consolidation loan, or add a co-signer;
  • Improve your debt-to-income ratio;
  • Surf the Net and compare the offers.

Unsecured Debt Consolidation Loans

Debt consolidation loans are called unsecured if they don't require any collateral. They usually have simple requirements which are debt-to-income ratios of up to 50% and minimum FICO credit scores as low as 585.

Unsecured debt consolidation loans are safer for a borrower as you don’t risk any of your property in case you default on the loan. But if you have a bad credit score and a debt-to-income ratio not enough to get approved, you’d better consider a secured Personal Loan. You’ll have more chances of getting approved.

Read more: Secured vs Unsecured Personal Loans

Personal Loans for Debt Consolidation

Personal loans are more and more often used to consolidate existing debts. They have affordable rates which are usually lower than interest on Payday Loans, credit cards, etc. And Personal Loans offer convenient monthly repayments.

But to make a Personal Loan really useful for debt consolidation you’d better prepare for it carefully:

  • Make a convenient affordable repayment plan;
  • Control your expenses not to waste money on useless purchases;
  • Increase your credit score to get lower interest rates on a loan;

You can apply for a debt consolidating Personal Loan online or in-store just by filling out a simple application form online. It takes several minutes and you get access to a database of available direct lenders offering Personal Loans to suit your needs.

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Guaranteed Debt Consolidation Loans for bad credit

To apply for a guaranteed debt consolidation loan you need to look for a lender that provides loans to any type of borrower, with any credit score, with simple eligibility criteria. It’s easier to find such a lender online as they offer more flexibility and have fewer requirements than banks or credit unions. Mostly, the approval requirements for a guaranteed debt consolidation loan are:

  • A stable income source and proof of this income
  • A debt-to-income ratio of less than 50%
  • ID, Social Security Number
  • Address proof

If you meet these basic criteria, you are very much likely to be approved for a loan as soon as you fill out an application form and get an instant decision from a lender. Applying as well as checking your rates won’t affect your credit score.

Why consolidate your debt?

If you have multiple outstanding debts with a high-interest rate, you are jeopardizing yourself in serious trouble. You should consolidate your debt to combine all debts into a single, thus reducing the number of creditors, loan payments, and interest rates you have to deal with.

Debt consolidation is an efficient way to improve your credit score and improve the chances of timely payments. You should consolidate your debt if your objective is to live a debt-free lifestyle.

Benefits of debt consolidation

Here are some basic advantages of consolidating your debt:

  • Single Monthly Payment

Debt consolidation allows you to aggregate different debts into one loan so that you have one single monthly payment. The advantage is that you get to arrogate all of your debt into one single payment at a potentially lower interest rate, making your life more convenient as you will be focusing every single month on making only one payment instead of multiple payments.

  • Lower Interest Rate

Debt consolidation will allow you to save more money over the life of the loan. Another essential benefit of debt consolidation is that your overall interest rate decreases and your credit score will eventually improve. You just need to find the best lender who can offer you the most competitive interest rate possible.

  • Speedy Debt Payoff

If the debt consolidation loan comes with a lower interest rate as compared to what you would have paid for all accrued individual loans, the chances are high that you may expedite debt payoff by making extra payments each month. By doing so, you will also save more money in the long run by saving more on interest.

What types of debt can I consolidate?

Generally, debt consolidation is used to pay off the student loan (special programs), HELOCs, (high-interest) credit card debt, personal loan, and other unsecured loans.

It is important to mention here that debt consolidation doesn’t apply to general student loan debt; it only applies to credit card debt and medical bills, basically, anything that has high interest.

What happens after I consolidate my debt with a personal loan?

Since the goal of debt consolidation is paying off debt, a personal loan can be used to consolidate your multiple debts. Taking out a personal loan can certainly simplify the repayment process and even save you money in the long run.

By taking out a personal loan, you will be entering a lower interest rate that is fixed, a single monthly installment, and peace of mind that you are handling your debts well.

However, consolidating your debt with a personal loan doesn’t mean that your debt is gone. Nor does it guarantee that you won’t go into debt again. You will have to identify all factors that caused this enormous debt in the first place and see what you can do to prevent this from happening in the future.

Will debt consolidation affect my credit score?

Debt consolidation is more likely to raise your credit score in the long run as you continue using it to pay off your debt by making timely installments. The only thing you need to do is to ensure that you don’t miss any payments, which will lead to more debt.

Is Debt Consolidation a good idea? 

Debt consolidation is good for those who have a good predictable monthly source of income. Debt consolidation is also a good idea for those whose credit ranges from good to excellent and for those who have multiple areas of high-interest debt.

Debt consolidation is not good for those who have a poor credit score. A poor credit score is a hindrance in the approval of debt consolidation. Also, if you don’t have a reliable income source and you don’t have a high-interest debt to consolidate.

Debt consolidation is also a bad idea for you if you can pay off your debt within a few months; debt consolidation isn’t right for you.

For a really quick and easy debt consolidation loan, it would be wise to apply online. You just need to state the loan amount, fill out a request form, find out if you prequalify, get the offers, compare them, and choose the most convenient one, receive the loan. All this process takes a few minutes, is completely online, with no driving, faxing, paperwork, etc.

Before applying find out the details of online debt consolidation loans you need to make the right choice:

  • The repayment terms vary from 3 months to 7 years.
  • The APR is 5.99% - 36%.
  • The amounts go up to $35000.
  • Bad credit is not a problem.

Compare the offers online and find the one at lower rates than your existing debts so that this loan really helped you to save money and get rid of debt sooner.

 

Alternatives to a debt consolidation loan

There are certain alternatives to a debt consolidation loan. If you don’t want to opt for a debt consolidation loan, you can refinance your credit card or apply for bankruptcy. You might also settle for debt settlement or sign up for a credit counseling program. Home equity is another alternative, also known as HELOC (home equity lines of credit).