Debt consolidation loans are a specific type of personal loan which is taken to pay off and simplify the existing debt. In this, the debt is consolidated by making multiple payments and accounts into a single account with one lender and payment.
If your credit score is good, you can get a lower interest rate for the debt consolidation loan. Hence, this can save you money on the monthly installment and the rate of interest on the loans that you are paying.
There is also a method of paying the consolidation loan monthly. however, the methods come with prices. Methods like Longer-term loans can reduce the monthly payments of the loan but increases the rate of interest. Every good thing has its cons as well, the same way longer terms have a higher rate for monthly payments.
Typically, debt consolidation loans can be used for unsecured debt. Common types of debt that debt consolidation loans can be used for include:
- Credit cards
- Medical bills
- Personal loans
- Payday loans
Best Debt Consolidation Loans in 2020
The updated list of the lenders who provide the consolidation loan to the needy one is given below:
- Discover: best lender with no fee expect the late fees
- Lightstream: best funders, and can be very fast in lending money. As fast as lending on the same day.
- Upstart: best lender for the borrowers
- Prosper: best lender for those people who take a loan of a minimum of $2000.
- Marcus by Goldman Sachs: best lender for customer services.
Each consumer has different kinds of needs. Companies are surfacing with niche-based services. So, choosing the right company also matters.
Discover
It started giving loans from the year 2008 and does not accept co-signer. It does not take a fee as long as you are on time with your monthly installments.
Details:
- Minimum FICO score: 660
- Maximum debt-to-income ratio: N/A
- Co-signer option: No
- Preapproval or rate quotes available: Rate check available
- Loan amounts: $2,500 to $35,000
- Terms: 36 months to 84 months
- Restrictions: Only debt consolidation, home repairs/improvements, unexpected expenses or major purchases.
- Discounts: N/A
- Origination fee: None
Lightstream
It was launched as a division of the sun trust bank in 2013. This can provide personal of up to $100,000. Lightstream allows co-signer for the loans. It is highly recommendable by the people because it can provide you with a loan in a single day. This is the best part of this company.
Details:
- Minimum FICO score: N/A
- Maximum debt-to-income ratio: N/A
- Co-signer option: N/A
- Preapproval or rate quotes available: N/A
- Loan amounts: $5,000 to $100,000
- Terms: N/A
- Restrictions: Funds are used for approved loan purpose
- Discounts: None
- Origination fee: N/A
Upstart
It is a platform that connects the lender and the borrower. It was established in the year 2012, and the first loan originated was in the year 2014. Since then more than 344,000 has been originated from this platform with best debt consolidation reviews.
It has advanced to such a phase that it can provide a loan without manual review or processing.
Detail:
- Minimum FICO score: 620
- Maximum debt-to-income ratio: Not disclosed
- Co-signer option: No
- Preapproval or rate quotes available: Yes
- Loan amounts: $1,000 to $50,000
- Terms: 3 to 5 years
- Restrictions: Loan funds may not be used for any prohibited uses noted in Upstart’s Acceptable Use Policy.
- Discounts: N/A
- Origination fee: 0% to 8%
Prosper
It was founded in the year 2005 and since then it has been the prime choice among debt consolidation companies. It has facilitated almost $16 billion of loans.
Prosper has been a market place for the lender and receiver for the investment which is rewarding both financially and socially.
Details:
- Minimum FICO score: N/A
- Maximum debt-to-income ratio: N/A
- Co-signer option: N/A
- Preapproval or rate quotes available: N/A
- Loan amounts: $2,000 to $40,000
- Terms: 5 years
- Restrictions: N/A
- Discounts: N/A
- Origination fee: N/A
Marcus by Goldman Sachs
It is a brand of the Goldman Sachs USA bank. It has the best way to take a loan for customer services. They help in setting up shop and providing loans to do so. They also have a fixed rate with no fee personal loan.
Details:
- Minimum FICO score: Not disclosed
- Maximum debt-to-income ratio: Not disclosed
- Co-signer option: No
- Rate quotes available: Not disclosed
- Loan amounts: $3,500 to $40,000
- Terms: 36 months to 72 months
- Restrictions: Only debt consolidation loans, home improvement, major purchases, special occasions, moving and relocation and vacations
- Discounts: N/A
- Origination fee: None
Conclusion
Have you taken any loans? It is becoming harder to pay off your loan’s monthly installments? Well, here is a solution for you. You can take a debt consolidation loans to pay off your loan in one installment.
I know you all are thinking that it is just the same, you have to pay the monthly installments for this loan now. You are correct to some extent. However, let me tell you one thing, these loans have a lower interest rate than normal personal loans. therefore you can without a second thought you can go for it.
A debt consolidation loan is very useful for clearing out your debt that has been piling up.
Depending on the credit score you can get a loan of a minimum rate of interest, which will be lower than that of your previous loan. In other words, this can save you money on the monthly installment and as well as on the rate of interest.
If you are a student and is searching for something which a student based debt consolidation loans, then you can have look at best student loan consolidation.
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