The U.S. consumer debt decreased slightly at an annual rate of 0.4% in January 2021. Consumer spending and the overall debt had dramatically reduced due to the coronavirus pandemic, a threat to the U.S. economy. Since the pandemic rendered some Americans jobless, borrowing loans became the source of finance for many.
Debt consolidation plans help people to pay reduced interests. It is a personal loan that allows individuals to pay low monthly interest by combining their high-interest debts. Debt consolidation loans cover unsecured debts including, medical bills, credit card bills, payday, and personal loans.
When comparing debt consolidation loans offers from the available lenders, it would be best to consider; repayment terms, the loan amount, and the prepayment fee to determine what is the best debt consolidation loan.
Finding the best loans to consolidate existing debts is vital. Below are primary ways for consolidating debts.
LightStream is the best debt consolidation loan for individuals looking for low-interest loans. LightStream is a SunTrust Bank division, which deals with national online consumer lending. It became Trust in 2019 after it merged with BB&T. The loan limit of Lightstream is $100,000, different personal reasons other than consolidating existing loans. Lightstream loan services are available in all 50 states in the country. All the borrowers with credible credit scores qualify for these loans.
PenFed Credit Union
This institution serves the armed forces, Department of Homeland Security, Department of Defense, Department of Homeland Security, eligible veterans, military associations, retirees, and the above groups’ family members. This credit union deals with personal loans for members who meet the laid down eligibility requirements and all the qualified co-borrowers residing in any of the 50 states.
The firm does not disclose the minimum FICO credit score to the applicants. PenFed Credit Union offers loan amounts ranging from $500 minimum to $20,000 maximum whose repayment period is up to 60 months. These features make it the best debt consolidation loan.
Upstart is a marketplace lender providing online personal loans to borrowers and investors. It has offered more than $7 billion in loans since its establishment in 2012. Borrowers with outstanding borrowing power can obtain loans from this institution of up to $50,000. It works with residents in the U.S. states, except for West Virginia and Iowa.
The company’s loan amounts range between $1,000 minimum to $50,000 maximum with repayment terms of 36 to 60 months. Upstart’s credit dashboard enables borrowers and investors to analyze loan repayments’ impact and modify the payment dates. It offers loans to residents with fair credit, and those without credit history make it attract many borrowers.
Payoff provides personal loans to consolidate high interest and credit card debts. It works with borrowers and investors in most states, providing loans of up to $40,000. The institution itself is not a bank but liaises with top lending partners that offer loan services. It classifies itself as a financial wellness company located in California.
Happy Money, a sister company to Payoff, was launched in 2017 deals with a psychological approach to financial matters. The minimum FICO credit score of this company is 640. It provides loans ranging from $5,000 to $40,000 whose repayment terms are 24 to 60 months. Currently, Payoff is a service within the Happy Money umbrella.
Rocket Loans provides personal loans to residents in U.S states except for Nevada, West Virginia, and Iowa. These loans are available for borrowers with fair to excellent credits, which require up to $45,000 for home improvements, debt consolidation, business purposes, and medical expenses. Its minimum FICO credit score is undisclosed.
In a Nutshell
There is no right formula when choosing the best debt consolidation loan. Mostly, it depends on what you want to accomplish, whether it’s fast funding, low or zero fees, or combing a considerable debt. You may receive more extended repayment periods from some lenders if you are fortunate, hence lowering the amount payable monthly.