If you have several types of debt that carry high-interest rates, you could benefit from a debt consolidation loan. Debt consolidation is a process through which you take out a new loan to cover all your outstanding debt.
An advantage of this strategy is that you will have a single monthly payment with a potentially lower interest rate. To make it easier for you, we’ve listed the pros and cons of top debt consolidation loan providers.
Upstart
Pros
Ideal for those with low or no credit history
No minimum credit score history requirement
Speedy loan funding in one business day
Some products offer options to credit lenders directly
APR starting at 7.57%
Cons
Only two repayment terms available
Includes origination fees
Potentially high APR up to 35.99%
Avant
Pros
A minimum credit score requirement of 550
APR varies between 9.95% and 35.99%, depending on your credit history
Payment date change allowed
Offers loans against collateral
Next business day funding
Cons
Administration fees of 4.75% apply
No option to directly credit funds to lenders
Best Egg
Pros
Attractive APR between 9.3% and 12.8%
Minimum credit score requirement of 600
Homeowners have access to secured loan options
Quick loan funding process; one business day
Cons
Charges fees for late payment and loan origination
Repayment restricted to two term options
Upgrade
Pros
Low credit score requirement of 580
Loan amounts starting at $1,000 up to a maximum of $50,000
Access to discounted rates for autopay and direct lender payments
Provides options for joint, cosigned, and secured loans
Fixed-rate loan
Cons
Fees included for late payments and origination
Potentially high APR up to 35.97%
SoFi
Pros
APR between 5.99% and 18.85%
No lender fees
Allowance for joint loans
Includes protection against unemployment
Easy loan management through a dedicated app
Cons
Non-availability of secured loans
Minimum credit score requirement of 680
Requires proof of employment
While a lender may have attractive debt consolidation options available, you must read and understand the fine print before signing up. Along with the information above, comparison websites and loan advisors could help you find a debt consolidation loan that best suits your financial needs.