Loan debt consolidating finance companies
We focused our search on online lenders for three reasons: They’re better suited to offering personal loans than banks are, they’re more widely available, and you don’t have to be a member to get a loan.To gain a more concrete understanding of debt consolidation loans and when they’re useful, we sought the advice of financial experts to walk us through tips and important considerations when it comes to the lending industry.The best debt consolidation loans fold high-interest debt from several sources into a single, manageable payment with a lower interest rate, ultimately helping you pay off everything faster.They should also offer you the amount of money you need with minimal fees, helpful resources, and excellent communication.And a loan that includes an origination fee might end up giving you a better APR that will cost you less in the long run. Upstart, previously one of our honorable mentions, was disqualified at this stage thanks to an increase in its origination fee — it now reserves the right to charge as much as 8%.Fixed interest rates stay the same throughout the lifetime of the loan, while variable interest rates may start low, but can go up at an unpredictable rate (they do tend to be capped, though, so they won’t jump from, say, 6% to 155%).In our tester’s case, the reason given was having “too few open trades,” meaning she may not have had enough open credit cards to qualify.Prosper is more lenient about debt-to-income (DTI) ratios than our other top picks.
These are the administrative fees a lender charges — basically, the payment it takes for setting you up with a loan.
We found that this translated to a simpler approval process.
Being approved for a loan — and getting that money in your bank account — can happen a lot faster with an online lender (we’re talking hours or days as opposed to weeks).
For this very reason, we only kept companies that took “soft pulls” on your credit upon applying.
Unlike “hard pulls,” these are mainly for your records, meaning the lender itself won’t investigate your credit beforehand.