Dealing with debt can be overwhelming, especially when juggling multiple loans with varying interest rates. This is where debt consolidation comes in. This article provides you with low-interest debt consolidation loans advice you should know.
Consolidating your debts can streamline your finances, allowing you to make a single, manageable payment each month, and potentially pay off your debt faster. It simplifies your payments by combining multiple debts into one, often at a lower interest rate, helping you save money and reduce financial stress. Find out more!
What is Debt Consolidation?
Debt consolidation involves merging several debts into one loan or payment. A consolidation loan can significantly reduce the overall financial burden by lowering the interest rate on existing debt, which helps to minimize the total amount paid over time. The aim of debt consolidation serves two main purposes.
It simplifies the repayment process by merging multiple monthly payments, typically owed to various lenders, into one single payment. Secondly, it can lower the overall cost of repayment. Consolidating several balances into a new loan with a reduced interest rate can decrease the total interest paid throughout the life of the loan.
Thus, it is essential to seek low-interest debt consolidation loans advice to facilitate a more efficient debt repayment process. That’s why it’s important to find the best low-interest debt consolidation loans advice to help ease the stress of managing your debt.
What Debt Does Debt Consolidation Cover?
While debt consolidation can help manage many types of debt, not all debts can be consolidated. However, here are some of the most common types of debt that can typically be included in a consolidation plan.
1. Credit Card Debt
Credit card debt is one of the most common debts to consolidate because credit cards often have high interest rates. By combining your credit card balances into one loan, you can potentially get a lower interest rate.
This is helpful if you have debt on multiple cards, as consolidating everything into a single payment can save you money on interest and make managing your debt easier.
2. Personal Loans
You can consolidate personal loans, including credit card bills, to manage them easier. If you have several unsecured loans with different interest rates and terms, consolidating them into one loan can simplify payments. This may also help you get better loan terms if your credit score has improved since you first took out the loans.
3. Medical Bills
Medical debt can be stressful, especially if an unexpected illness or emergency has led to large bills you can’t pay right away. While medical bills usually don’t have interest like credit cards or loans, they can still cause financial problems if left unpaid.
Fortunately, many debt consolidation programs let you include medical debt in the process. By combining your bills into one payment plan, you can avoid collections and pay off your medical debt more quickly.
4. Student Loans
You can also consolidate your student loans, whether federal or private. For some borrowers, consolidating through a private lender might result in a better interest rate.
However, if you’re considering consolidating federal student loans, be careful. Federal loans come with benefits like income-driven repayment plans and loan forgiveness, which private loans don’t offer.
5. Auto Loans
In some cases, you can consolidate auto loans, especially if you have multiple loans, perhaps from refinancing different vehicles, and want to simplify payments or lower your interest rate.
For example, if you have several car loans with high rates, consolidating them along with other debts might help reduce your overall repayment costs. However, it’s important to carefully review the terms of any auto loan before deciding to consolidate.
5 Low-Interest Debt Consolidation Loans Advice
If you’re struggling with multiple high-interest debts, consolidating them into a low-interest loan can be a smart way to simplify your finances and save money. To help you make the best decision, here are five low-interest debt consolidation loans advice to consider.
1. LightStream
With LightStream, you can get a low-interest, fixed-rate loan to consolidate your debt, ranging from $5,000 to $100,000. If you have good credit (a minimum score of 695), you’ll qualify for a great rate, with an estimated APR ranging from 6.94% to 25.29% when using AutoPay.
Loan terms are flexible, ranging from 2 to 7 years. The application process is simple and paperless, and you can even choose your funding date, with the possibility of receiving funds the same day you apply. Plus, ensure you get the best deal possible for your low-interest debt consolidation loans advice.
2. Upstart
Upstart offers loans ranging from $1,000 to $50,000, with loan terms of 3 to 5 years and an estimated APR between 7.80% and 35.99%. The minimum credit score required is just 300, making it accessible to a wide range of borrowers.
3. Achieve
With Achieve Debt Consolidation, you can combine multiple bills into one easy monthly payment, simplifying your finances and reducing the stress of managing different due dates.
Achieve offers customizable payment plans. Loans range from $5,000 to $50,000, with terms of 2 to 5 years, and an estimated APR between 8.99% and 35.99%. The minimum credit score required is 620, making it accessible to many borrowers looking to take control of their debt.
4. Lending Club
Lending Club offers debt consolidation loans ranging from $1,000 to $40,000, with loan terms of 2 to 5 years and an estimated APR between 9.06% and 35.99%. This company requires a minimum credit score of 600. Lending Club provides a flexible solution for consolidating high-interest debt into one manageable payment.
5. Best Egg
Best Egg offers debt consolidation loans ranging from $2,000 to $50,000, with loan terms of 3 to 5 years and an estimated APR between 7.99% and 35.99%. You need to have a minimum credit score of 600 to be approved. Best Egg makes it easier to consolidate high-interest debt into a single, manageable payment.
Which Debt Consolidation Should You Choose?
Choosing the right debt consolidation option depends on your financial situation, credit score, and loan preferences. You may qualify for one of the best low-interest debt consolidation loans advice above based on your credit score. Find the best one, and get unlimited offers and benefits for your payment!