Match Your Needs with the Best Loan Consolidation Companies
- The best loan consolidation companies take into account your overall debt situation.
- Loan consolidation companies offer you a better interest rate and/or lower monthly payments.
- Read Bills.com reviews about loan consolidation companies and then shop around.
Find the Best Loan Consolidation Companies and Reduce Stress
Being in debt is not stressful enough. Why should finding a debt relief solution be so complicated? There are so many different alternatives. They all sound similar and different at the same time. Loan consolidation, debt consolidation, debt settlement, debt management are all names used for programs that aim to solve debt problems. However, the real trick is to find a solution that meets your individual situation and needs. Then, you can move on to finding the best loan consolidation companies.
The term "loan consolidation" refers to a debt relief solution where a borrower takes out one loan to pay off other, smaller loans. Lower interest rates, smaller payments, or shortening the term of the loan are three reasons borrowers look to loan consolidation as a solution.
Very few people in serious debt can do it alone. It requires professional help to analyze your situation, pick a program and help you implement that program to the end.
Quick tip #1:
Use Bills.com Debt Coach to help you find the best debt relief strategy.
Loan Consolidation Products
Loan consolidation products differ based on the type of debt that you have and the type of assets that you have to pay off your debts. In general, there are a few loan consolidation programs, as follows:
- Home Equity Loan (HELOC) or Cash-out Refinance Mortgage: When you pay off your unsecured debt (credit card, medical bills, and student loans) with a mortgage, you provide stronger collateral to the lender. This allows you to lower your interest rate and total financial costs, or lower your monthly payments through a long-term payment schedule. Mortgage lenders offer HELOCs and cash-out mortgage loans.
- Personal loan: A personal loan (unsecured) is an alternative, if you do not have a property to offer as collateral. Large banks and lending institutions offer personal loans; however, there are many small companies that offer these types of loans.
There are special programs for student loans. For more information, check out the Bills.com article about student loan consolidation.
In order to help you find the best loan consolidation company follow these steps:
- Make sure that the loan consolidation product is right for you.
- Learn about what the best loan consolidation companies offer.
- Shop around for the best loan consolidation company.
Home Equity loan or Cash out Refinance:
Is it right for me? A HELOC or cash-out refinance is appropriate if you have sufficient equity in your home (strong LTV), good to excellent credit score, and an acceptable DTI (Debt to Income) ratio. If you have bad credit, there are very few options available for cash out refinances. FHA cash-out refinance is one solution.
What a good company can offer: Good interest rates and low fees, and knowledgeable loan officers that can guide you through the loan application process all the way to the finishing line.
How to find the best company: In order to find the best loan consolidation company, start by searching online. You will be able to get ballpark quotes, based on general information you provide to the lender. Then research the company by getting recommendations from friends, and reading reviews. Read the Bills.com article about how to find a lender and lender reviews.
Personal Loan
Is it right for me? : This is good for people who have sufficient income and a good credit score. If you do not have of both these, then a personal loan consolidation is an expensive and dangerous route to take.
What a good company can offer: A good company can offer you better interest rates than your credit card or other personal debt. The payment schedule will allow you to spread out the payments over a period of at least 3-5 year term. The best loan consolidation companies will be responsive to your needs. They evaluate your loan options with you, to see if a new loan helps solve your debt problems or just adds fuel to the fire.
How to find the best company: Start by speaking with your local bank or credit union. A banker that knows you will be able to treat your case more personally and is less likely to hard sell you a product that you do not need. Next, conduct an on-line search. Be careful when looking online for a personal loan. Many of the companies that advertise online are looking to give a loan to people with bad credit. These loans are debt-traps for many, and do not solve your debt problems or truly consolidate your loans.
Non-Loan Debt Consolidation Programs
If your search for the best loan consolidation companies did not provide a solution to your debt problems, then do not despair. There are other solutions, including payment consolidation programs, such as debt settlement, debt management, and chapter 13 bankruptcy. When exploring all of your debt relief solutions, look into these alternatives. I recommend that you read the Bills.com article about debt relief to get an overview of all your options.
Quick tip
# 2: Contact one of Bills.com's pre-screened debt providers for a free, no-hassle debt relief quote.
Struggling with debt?
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in West Virginia credit card delinquency rate was 5%, and the median credit card debt was $410.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
