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Best Debt Consolidation Loans Programs

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If you can’t make punctual repayments several times in a row, debt consolidation might be a potential solution to get organized. Debt consolidation programs help you roll a couple of debts into one with the lower interest rate and longer term of payment. It means that instead of paying to each lender each month, you will pay a smaller amount to one lender.


The majority of lenders require their borrowers to be older than 18, be legal U.S. residents, have a valid bank account and not to be in foreclosure or bankruptcy. So, if you have some problems with credit score and need money immediately for something, you can take payday loans online same day. But if a borrower has excellent credit and a low debt-to-income ratio, it is possible to get the best debt consolidation loans.


Debt consolidation is not as drastic as debt management or debt settlement. Yet, it has many pitfalls and you should try hard to find the best way to consolidate debt.


Pros and Cons of Debt Consolidation

advantages and disadvantages

Let us consider the pluses and minuses of debt consolidation.


Pros

  • Short-term relief: A single loan, which has a low-interest rate and can be repaid over a longer-term, can considerably decrease your monthly payment. Read about why taking a loan is more advantageous than save money.
  • It helps you stay organized: It is hard to remember about multiple bills and monthly due dates. If you don’t, it can lead to more missed or late payments. Yet, you will always remember about paying a single bill.
  • It doesn’t damage your credit: Debt consolidation loan doesn’t affect your credit because you are repaying all your debts. Yet, the debt management plans, debt settlement, and bankruptcy may affect the score.

Cons

  • Long-term pain: You will pay less not only thanks to lower debt consolidation loan rates but for a longer period as well. It means that instead of large payments over a short period of time, you will pay a little for a long period. Paying the interest rate over a long period is more expensive than to pay it once.
  • Bigger risk: In case you use a secured loan for debt consolidation, the collateral associated with it will be at risk if you don’t make timely repayments.
  • You are fighting debt with debt: if you don’t know how to consolidate debt properly and don’t change your habits, debt consolidation will not help you.

Debt Consolidation Loans for Bad Credit

In case your credit is average or poor, you may get an unsecured loan if your income is stable and debt level is low. Yet, the interest rates can reach up to 36%. Other debt consolidation loans for bad credit are co-signed and secured personal loans.


Many lenders claim that they have no minimum credit score requirements. Yet, it doesn’t mean they won’t check a borrower’s credit report. If you check a credit profile before applying, you will know what consolidation loans you can qualify for. Take advantage of credit score simulator to check credit profile.


How to Avoid Debt Consolidation Scams

Don't-do-this

Be careful when looking for a debt consolidation loan. Unscrupulous organizations can cheat on people who are looking for the debt relief.


  • You have to initiate the contract. Otherwise, you risk becoming a customer of a shady company that leads to less appealing options.
  • Don’t believe in guarantees. Legitimate lenders are not able to guarantee that you will get a personal loan without checking your credit score, income, and other information.
  • Never pay upfront fees. The application should be free.
  • Avoid pressure. When searching for the best way to consolidate credit card debt do not listen to the lenders who discourage you from searching for the other, more suitable deals.

Bottom Line

Debt consolidation is a perfect decision for people who want to forget about debts forever. The best debt consolidation will help you stay organized and repay your debt with a lower APR and affordable monthly payments. Think carefully and make a wise choice to leave your debts in the past!


Debt consolidation is a perfect decision for people who want to forget about debts forever. The best debt consolidation will help you stay organized and repay your debt with a lower APR and affordable monthly payments. Think carefully and make a wise choice to leave your debts in the past!

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