Do you have too much debt? Are you unable to keep up with payments? Keeping track of your numerous loans, they interest rates and payment dates must be taking a toll on your mental health. Have you considered consolidating all these debts into one? If you haven’t, you should!
You can actually combine all your loans into a single amount for a single, standard rate of interest and go from multiple payments to a single monthly payment to a single financial entity.
With the debt situation in the country getting worse as time goes by, one must also understand that debt-related services are also growing. In this scenario, how do you determine which is the best debt consolidation company for you? Read on to find more.
How To Consolidate?
There are many options in the market to help you consolidate all your debts into one. You can do this yourself or can take help from companies / individuals who specialise in this. Reaching out to companies that offer debt consolidation services is probably your best bet though. You can also sign up for a debt consolidation program that can help you with your situation.
Debt Consolidation Companies
These companies, not only help you consolidate your debt, but will also make payments on your behalf. They will try and negotiate with your creditors, to get a better loan at a lower interest rate or pay off your debts at a lower interest rate.
Debt consolidation loan companies are your go-to option if you have bad credit or your credit score is bad. When you don’t have a credit score good enough to help you consolidate your existing loans, these companies can negotiate on your behalf.
How To Choose The Best Debt Consolidation Company?
There are a number of debt consolidation companies to help you consolidate your debts. Here are a few tips to choose the best company for your needs:
The first thing to consider while choosing a debt consolidation company is the range of loans they work with. Many companies help consolidate big debts, some help with small debts. Whatever be their size, they will have a cap off amount. Check if their range suits your needs. It is always advisable to go to one company for all your debt needs rather than go to multiple companies.
Check how flexible the company is with their loan terms. Always choose a company that is flexible when it comes to the loan period/ term (the number of months over which you can repay your debt).
Always choose a company that gives you a reasonable rate. Your debts will have varied interest rates. Choose the company that offers the best rate of interest for your loans. Calculate the interest rates and total payable amount for all your loans individually. Now compare this with the loan and interest offered by the company.
With online loan consolidations, the number of online consolidators is on the rise. Many states have different set of rules for online consolidators and physical consolidation firms. If you are opting for online lender, check if they have a wide presence geographically.
Always check for the credibility of the company before you sign any papers with them. Beware of scams where you will be offered great loans at lowest interest rates possible. Check for customer feedbacks on their websites, check general online reviews or visit their office, etc. Just ensure you are not being coned.
The Best Debt Consolidation Companies
If you are looking for the best debt consolidation or bill consolidation companies in the USA, here are the top three:
This is one of the nation’s largest debt consolidation loan companies. This company offers loan that ranges from $1,000 to $40,000 with a wide range of APR (Annual Percentage Rate). The better your credit score, the lower is your APR. You can log on to their website and can find the rates and fees easily.
Though they handle lot of debts, they are strict when it comes to their qualifying criteria. The minimum credit score required and the debt-to-income ratio are pretty high when compared to other such debt management companies in the country.
Some of the advantages and disadvantages of using their service are:
They are present in all the 50 states and offer good amount of credit. The APR will vary according to your loan plans and credit score. The loan plans offered varies according to your state. To know more about their plans and APR, you need to get in touch with them directly.
Some of the advantages and disadvantages of using their services are:
Avant, unlike the above two companies, funds each loan directly. This not only protects your identity, but also reduces your waiting period. This company offers loans at a slightly higher APR than Lending Club or Personal Loans.com. This is best suitable for those with a slightly lower credit score and cannot qualify for the best lending programs or loans.
Some of the advantages and disadvantages of using their service are:
For Profit Or Not For Profit?
When you decide to seek the help of a personal loan company, you can opt for a non profit credit card consolidation company too. These non profit companies aim to help you resolve your debt problems to make your life better. They do not work for their own profits. Hence they can be more trustworthy with their plans and debt consolidation programs.
The non-profit debt consolidation companies offer many free financial resources such as worksheets and calculators. These resources can be used to understand better about your consolidation loans or programs and help you finalise on the one suitable for you. All you have to do is, simply enter your current outstanding loans amounts, the interest rates and periods. These calculators will help you determine how much you actually owe at the end of the term. This will enable you to choose the best debt consolidation plans for you.
Non Profit Credit Card Consolidation Companies
When you decide to consolidate your credit card debts, you may mostly be asked to sign up your house as collateral. This puts you at a risk of losing your house, if you falter your payments. Some for-profit companies offer unsecured loans to help you consolidate your credit card debts. This is equally risky but very rare.
When you sign with a non profit credit card consolidation company, you may receive credit counselling. These credit counsellors will be able to help you to consolidate your debts into a single debt management plan. If you have a good credit score, you will most likely receive a credit card with lower interest rate. You can use this card to pay off all your other credit card debts.
Consumer Credit Counselling Companies
There are a number of consumer credit counselling companies (CCCS) that offer a set of services to help with budgeting, debt management plans and financial education. When you seek the help of such a company, always ensure they are a member of the NFCC. These companies are non profit organisations that help people with their debt problems.
When you contact a CCCS, you are connected to a certified counsellor who will provide you a judgement free consultation. These counselling sessions are free and you can make the best of it by attending a session. It will not only enable you to understand your financial situation better, you can also learn about new options and opportunities.
These companies offer debt management programs that not only consolidate your unsecured loans, it can also eliminate your debts at a faster rate. They can also help you change your financial habits, to ensure you can manage your debt and bills better.
Government Debt Consolidation
Are you a student with outstanding government loans? Do you have to pay multiple student loans? You can opt for the government debt consolidation loan and combine all your existing student loans into one. This option makes it easier for students to repay their education loans.
Each state has its own rules for consolidating such student loans. Your consolidation loan will depend not only on your state, but also the type of loan outstanding, the amount, period, etc. However, if you have private student loans that are not backed up by the government, they cannot be consolidated under this government debt consolidation.
If you have faulted in repayments of such government backed loans in the past, you may be turned down for the consolidation loans or programs. Your payment history is more important than your employment.
Government Debt Advice
When you have multiple government backed loans or other debts, you can always seek debt advice from the US government. There are many credit counselling companies that operate on behalf of the government. You will have to ensure, the company you are contacting is approved by the NFCC or the FCAA. Beware of scams where you will be made to believe it a government debt consolidation programme but you will be charged instead.
When Should You Approach Bill Consolidation Companies
Everyone has a tough time to pay their bills on time. When you have mounting debts from various bill payments, or have maxed out on your credit cards, you should seek the help of a bill consolidation company. Having many collectors call you regularly regarding repayment or non-payments are a sure indication that you need to consolidate your bills.
These companies can offer you plans, where all your outstanding bills will be combined into one single loan. This will help you track your debt better and you can make monthly payments without fault. Also, these companies can get you loans with lower interest rate, which can also reduce your overall debt payable.
How Can These Companies Help
A debt consolidation company or debt help companies can only help you:
However they can’t
Are Debt Consolidation Loans Bad?
If you ask, are all debt consolidation loans bad? We would say no, because many help you get your debts in order and help you pay them off in a single payment. However, these loans or debt consolidation programs only procrastinates payments. You can overcome your debts and have a healthy financial life only if you change your spending habits or plan your finances better.
Everyone requires money to move ahead in life. When you are a student, loans that facilitate your education are a necessary evil. You can not only get good student loans at competitive rates in the US, but can also get the government to help you consolidate them. Once you have finished your education and have secured a well paying job, you can seek the government debt advice and consolidate your multiple student loans into one and make it easier to repay.