In today’s busy world, you need to make things as easy as you possibly can. One way to do that is by using debt consolidation to manage your outstanding monthly payments. You can pay everything off in one easy payment each month, making it easier to settle your outstanding balances and keep track of your multiple debts.
Some people may do this using the best debt consolidation loans, which is what we are going to discuss in this article. The benefits of this approach are outstanding. For example, you may be able to take advantage of a lower interest rate on your debt consolidation loans. So, let us learn more about the best services to consider for debt consolidation.
Top Picks For Debt Consolidation Loans Of January 2023
- MoneyMutual – Overall Best Debt Consolidation Loan Site, Editor’s Pick
- BadCreditLoans – Best For Bad Credit
- CashUSA – Most Recommended For Multiple Offers
- PersonalLoans – Most Popular Company For Paying Personal Debt
#1. MoneyMutual: Overall Best Debt Consolidation Loan Site, Editor’s Pick
Our first service is an extensive network of lenders that specialize in short-term loans. Here, you will find over 60 lenders that can help with loans, whether your goal is debt consolidation or just to get some extra money for an expense.
You begin by going to their site and filling out the pre-qualifier questionnaire. Then, lenders that are capable of lending to you will contact you, with no credit check loans regard to your credit score.
Overall, this site allows you to connect with lenders to obtain the financial assistance you need. The best part is you can get access to your funds, after approval, in as little as one business day.
This company is legitimate, and you will feel confident in working with them. They first opened their doors in 2010, and their mission is to get Americans the money they need with as little stress as possible.
They act as a middleman of sorts — they gather your information and send it out to a huge lending network, who then come to you with debt consolidation loan offers and interest rates. Best of all, everything is done online, so you can easily do it from the comfort of your home.
After you have chosen the loan that makes sense for you, you will carefully go over the Terms & Conditions. Then, you will accept the loan funds if it is suitable for your needs.
The payment loan amount, interest rates, and loan terms are all specific to your lender, not the MoneyMutual network itself. So, make sure you read them thoroughly and carefully before you agree to anything.
Users of the MoneyMutual network love the site for its clean design and user-friendly interface, but that is just one of the many features this site offers.
Here are some of the best features of MoneyMutual:
- Short-term loans up to $5,000
- Funds deposited in 24 hours or less
- Easily compare terms, rates, and amounts from many lenders in one place
- Over two million satisfied clients and counting
- Pre-qualifying form takes only five minutes to fill out
You are also going to love the many loan types MoneyMutual offers. We know you are here because you want the best debt consolidation loans, but knowing what they offer could help you in the future. The loan types include:
- Installment Loans: This is what many of you will be applying for when it comes to debt consolidation loans. You will pay this back on a scheduled day every month, and they are great if you have a steady income, such as from employment or government benefits, a pension, or self-employment. Read over the terms with care, and make sure you are aware of any interest payments you will have to make based upon the loan’s repayment dates.
- Bad Credit Loans: If you have a bad credit score, but you need a debt consolidation loan, MoneyMutual may be able to help. They look at factors other than your credit score to determine if you are eligible. Of course, you will be paying higher interest rates, but as long as you are employed, you will have an easier time getting a loan with MoneyMutual.
- Cash Advances: Cash advances are for when electronic payments are not accepted to fulfill a debt. We generally advise staying away from these unless the need is dire, as the interest rates and fees are astronomical.
- Payday Loans: These short-term loans are designed to help you make it to your next payday and are good if you need a bit of extra money for an unexpected expense. These are usually required to be paid upon receiving your next paycheck, so be prepared to authorize the lender to debit your account on its due date.
These loans are high-interest and loaded with fees. So, make sure paying off this debt will not be an issue when it comes due. Otherwise, you could get trapped in a cycle of debt.
- Free service
- Fast and easy approval
- Funds transferred directly to your bank account within 24 hours
- Educational resources available on the website
- Not all loan services are available in every state/territory of the U.S.
- Often comes with high interest
From reading customer reviews, we found an overwhelmingly positive response to MoneyMutual’s services. One user described this platform as a “lifesaver” when he was in dire need of quick funds. In addition, customers loved the ability to obtain a loan despite having a bad credit score. Overall, users have been satisfied with the services provided by MoneyMutual, as it has assisted many in overcoming their financial woes.
#2. BadCreditLoans – Best For Bad Credit
BadCreditLoans says, “we can help when others can’t.” This is very encouraging if you need some financial help in the form of a loan but do not know where to turn. This platform is designed for people who do not have very good credit or have no credit at all. Those who have struggled in the past can rebuild and get a second chance with these small same day loans, as they can be a great way to improve your credit score.
These loans can be used for many things; however, you should only use them for necessary expenses, such as medical bills or, in this case, consolidation of debt. Moreover, BadCreditLoans is a lot like MoneyMutual in that it is a marketplace of lenders.
The loans offered are not directly from BadCreditLoans. Instead, it connects you to a massive network of lenders, and they send you offers to consider. You simply have to complete the pre-qualifying application to see what lenders are available to you.
However, be sure to approach these loans with care. The interest rates on bad credit loans are higher, and fees could be bigger than those for people with good or fair credit scores. Plus, these loan amounts are not as high as other lenders. But, if you want to consolidate your debt relief and your credit score is not great, this organization is going to be your best bet.
They have been in business since 1998 and are a legitimate business, and they even offer tribal lending on top of traditional loans.
However, tribal loans are also high-risk because they follow tribal laws set forth by Native American loan companies operating on tribally owned land instead of federal laws that virtually all lenders need to follow. So, make sure you read the terms carefully if you opt to go this route.
Here are a few of the great features we noted while using BadCreditLoans.
- Loans available in amounts from $500 to $10,000
- Quick approval and funding
- Simple and quick application process
- Money reaches your account the next business day
- Compare offers from several lenders
We also took note of the site’s Education Center. This is where you go if you do not know anything about loans, as they talk about the myriad of loans consumers can apply for, such as auto, student, and business, among others. In addition, they discuss loan scams, which everyone should be informed about, especially if you have a poor credit score. Also, you can contact them using the number on their website for further guidance, and we loved how easy the company made it to speak to them.
It is also worth noting the customer service reps are quite helpful and knowledgeable about the site. However, queries about your loan have to go to the lender providing that loan, not BadCreditLoans.
The main offering of BadCreditLoans is personal debt consolidation loans, and they take care not to put those with poor credit scores in a bad spot. For example, we noted that someone with a FICO score of 500 or less would not be loaned more than $1,000.
And, with personal debt consolidation loans, you can use them for any reason at all. However, you should not get tempted to use your loan on anything except debt consolidation.
To qualify for a loan, you must:
- Be 18 years old
- Have a valid email
- Provide documentation that you are a U.S. citizen
- Provide work and home phone numbers
- Have a checking account in your name
- Have proof of regular income, whether it is a government benefit, such as disability/Social Security, self-employment, or full-time employment
Another thing we love about using BadCreditLoans is how short the process of getting your debt consolidation loan is, as it can be broken down into four easy steps.
Step 1: You will start by filling out a request form that indicates your interest in taking out a loan. Here, you will share your birth date, the reason for the loan, and your credit score. You will also provide banking and employment information, as well as phone numbers for your work and home.
Step 2: You will carefully review the offers lenders have sent to you. Make sure to take your time and read the terms carefully. Do not be afraid to ask questions before you sign.
Step 3: You will accept the debt consolidation loan after carefully reading it over, and you will then sign with an e-signature, indicating you understand the loan agreement terms and you agree to pay it back.
Step 4: You will get your money in just one business day, and from there, you can use it to consolidate your debt into one simple payment.
- Compare multiple lenders at once
- Free service
- Multiple contact methods
- May help you build your credit
- Provides quick loans for those with poor credit
- Loans are small, especially for those with poor credit
- Marketing messages may be sent to you
- High interest rates
Customers have raved about the service provided by BadCreditLoans, stating their appreciation for the ability to receive a loan quickly even with a best bad credit score sites. Moreover, users like that they feel confident providing their personal information, as this platform values and protects user data, thus ensuring privacy.
In addition, customers have reported the site is very user-friendly and professional, and the platform clearly explains each step of the process of obtaining a loan. This provides customers with a seamless experience in times of financial need.
#3. CashUSA – Most Recommended For Multiple Offers
With CashUSA, you simply have to submit a short application, and then let them do the rest. If you qualify for a loan, lenders will then flock to you in a matter of minutes and bring offers with them based on the info you entered.
Once again, CashUSA is another loan marketplace with a network of lenders coming together to provide people who need to borrow money many options. Just like MoneyMutual, it is good to think of this as a “go-between,” as they bring forth all of the loans.
In addition, we discovered no credit score checks are performed on borrowers with CashUSA. This is ideal if you have a poor credit score, but bear in mind higher interest charges and service fees are inevitable if you go with this company.
Loans start at $500 and cap off at $10,000, and interest starts at 5.99% and stops at 35.99%. Also, remember that CashUSA is not a loan provider or servicer. Therefore, you will have to contact your loan company directly to ask them any questions/address any concerns you may have about the loan.
Like the other sites in this article, CashUSA has some pretty nice features, including:
- Loans offered from $500 to $10,000
- Quick approval
- Funds deposited directly into your bank account
- Loans can be used for anything
- Bad or no credit holders accepted
There are many lenders working for you, and this is possibly the best feature of them all. It is easy to cast a wide net and see what offers are available, which is much easier than calling a dozen or so places and having to write down all of that information. They will also only direct you to lenders that are approved to do business in your state.
Another great feature is the ease of the process from start to finish. You start by filling out a quick form, which just asks for basic info, such as zip code, birth year, and SSN’s last four digits. Then, you complete the full form, which asks for more information, such as name and email, employer info, military status, income, and financial institution information.
Once that is complete, you submit the form, and then the offers start rolling in. Once you have found a loan that makes sense to you, simply click on it, and review the contract closely. If you decide it is suitable for you, you will provide whatever info that particular lender needs, receive your funds the next day, and start repaying the loan.
Another thing we liked is that this platform is completely free to use. Therefore, you do not need to pay anything to use the CashUSA network of lenders. There will be no extra fees tacked onto your loan agreement, nor do you have to enter a credit card number to use the site.
Another interesting feature is the loan amounts. This network offers lower loan amounts than other companies we have reviewed, presumably because they accept borrowers with bad or no credit.
However, loans only go up to $10,000, and the maximum term for a loan is six years. This is for those with both good credit and bad credit. While a smaller loan means it is easier to pay back, it may not be enough for debt consolidation loans.
Next, you will find that just about everyone is capable of being qualified. There are so many lenders working with the CashUSA network that you are almost guaranteed to be approved. However, there are some basic eligibility requirements you will have to meet, including:
- Must be at least 18 years old
- Must have a checking account in your name
- Must have an email address and phone number
- Must have at least $1,000 in monthly income
- Must be a citizen or permanent resident of the U.S.
Next, we liked that the loan is free to be used for any purpose. However, if you are taking out a loan with the help of CashUSA or any of our featured lending networks, make sure it is for a good reason. Remember, you are here because you want to consolidate your debt, not add to it.
Therefore, you should not use these loans for frivolous reasons, such as taking a vacation or buying things you do not truly need. You should also look for other ways to get money before taking a loan out, such as working extra hours or finding a side gig.
However, you are free to use the loan as you like, and it is great if you need something that banks do not typically finance, such as purchasing new furniture or costs associated with moving.
Next, we liked that CashUSA makes repayment easy, as it is a breeze to repay the money you have borrowed using the lender’s automatic withdrawal method.
You simply enter the details of your bank account, which is how your funds get deposited. This may also be used for autopay, and the funds will be withdrawn automatically. So, you never have to miss a payment, and you ensure the loan is repaid on time.
- No minimum credit score required
- Free service
- Safe, secure, and convenient site
- Minimum income of $1,000 to qualify
- Interest rates tend to be high
With CashUSA, customer reviews revealed an appreciation for their excellent customer service. Users have stated their experience with customer support revealed the representatives were professional, attentive, honest, and took the time to make sure they understood every part of the process. Moreover, they liked that the customer support staff were readily available to answer any questions or concerns in a timely manner.
#4. Personal Loans – Most Popular Company For Paying Personal Debt
Our final lending network is Personal Loans. Like the other networks, they match borrowers who need money to lenders that will approve them.
They are headquartered in Utah and provide loans to those with fair to excellent scores. However, if you have a bad credit score, we encourage you to look elsewhere.
They also require you to have no accounts over 60 days late, no recent or active bankruptcies, and no credit history of late fee payments.
Personal Loans is a free service, and for that, we are grateful. After all, you are going to be paying interest and other fees associated with getting a loan, so getting something for free helps out.
The rates are fair, too. This company caters to people with fair to excellent credit scores, so the rates tend to reflect that.
Furthermore, the loans can be used for any reason. Whether your goal is debt consolidation or something else, you can use the emergency loan for it. As we have said before, however, only use it for things you need, not things you simply want.
Funding also happens fast, as you will get your money by the next business day. Then, they deposit it directly into your bank account.
Lastly, we loved the customer service. If you have any concerns or queries about the Personal Loans service, you can contact them using their email or phone number. Customer service reps are available Monday to Friday from 6 AM to 7 PM, Pacific Time.
Remember, though, they cannot answer questions about your specific loan, but they can answer any questions you have about the site itself.
There are a few requirements you have to meet if you want a debt consolidation loan with Personal Loans, including:
- Having proof of income, whether it is full-time employment, Social Security or disability payments, or self-employment
- Being 18 years or older
- Having a valid Social Security number
- Being a U.S. resident or permanent citizen
- Having checking account in your name
- Having a fair to excellent credit score, no recent charged-off accounts, and no recent/active bankruptcies
- Loan terms from 3-72 months
- Great interest rates, especially if you have a good credit score
- Loans up to $35,000
- Extensive lending network accessible
- Works with actual credit unions/banks to provide loans
- Not available to bad credit holders
Overall, customers have been satisfied with the service provided by Personal Loans. They have stated they received an excellent and competitive APR, and they received their funds directly in their bank account within 24 hours, making this platform perfect for anyone in rapid need of cash.
Moreover, customers were happy with the easy to use website and simple application process. From applying and being approved to browsing through lenders, accepting an offer, and receiving their funds, users have had a seamless experience with Personal Loans.
How You Can Choose The Best Debt Consolidation Loans
Are you new to debt consolidation? Check out our guide below, as we have laid out the benefits and the risks, plus the multiple debts people most commonly consolidate.
Understand the Benefits
- Pay Less Interest: If you can consolidate multiple debts with high interest ( in the double digits) into a single loan with an interest rate of 10% or less, you will likely save hundreds of dollars compared to paying each loan individually.
- Easy Repayment: It is difficult to keep track of many credit card debts or loan installments every month, especially if they come due on different days. You can streamline the process by paying one debt consolidation loan payment, and it becomes easier to stay on top of your payday loan installments.
- Boost Your Credit Score: You may see a boost in your credit score if you decide to consolidate your debt. By paying off your credit card debt using a debt consolidation loan, you bring down your credit score-use ratio, and your credit history of on-time payments could improve as you make a single, one-time payment every month.
Understand the Risks
- Upfront Fees: You will likely have to pay upfront costs associated with the loan upon taking it out. These could come in the form of origination fees, closing costs, or balance transfer fees. However, make sure these fees do not outweigh any savings you hope to gain as part of your debt consolidation efforts.
- Collateral May Be Required: Depending on the lender, you may be asked to provide collateral. Remember, though, this collateral may be seized if you fall behind on your loan payments.
- Debt Cost Could Be Raised: Your likelihood of saving money using a debt consolidation loan depends on the structuring of that loan. If you have an interest rate similar to the loans you are already repaying but select a longer loan term, you are going to pay more interest charges over time.
Debts People Commonly Consolidate
By refinancing using a lender that offers debt consolidation loans, you could pay less interest over time. However, it should be noted that if you do refinance or consolidate, the terms of the loan could be reset, and the overall cost could increase. So, make sure you review all terms of your loan carefully, so you do not end up spending more.
- Student Loan Debts: If you have many student loans you are dealing with, consolidating those can give you peace of mind and a single, monthly payment. Some lenders offer consolidation loans at competitive interest rates, some of which are much lower than the interest rates for student loans.
- Credit Card Debt: You can do a debt consolidation credit card balance using a 0% APR balance transfer credit card, personal, or home equity loan. The best way to consolidate credit card debt is to find a funding source with a lower interest rate than what you currently pay. Personal loans are an excellent way to go about this, as they often come with interest rates that are much lower than your everyday credit score card. If choosing the 0% card option, you will find out if and when the interest rate changes.
- Medical Debt: If you have incurred many medical bills, consolidating your debt into a single monthly payment can make life easier. If your insurance or doctor’s office does not offer repayment plans, or if the installments they do have are too expensive, a personal loan may be your solution. Personal loans come with lower interest rates compared to credit score cards, and it could allow you to stay away from bankruptcy thanks to expensive medical bills. A 0% APR credit card is also an option, but only if the credit card debt can be repaid before the interest rate goes up.
Is Debt Consolidation Right for Me?
You may feel like debt consolidation is the way to go, and some of you may be excited about applying for a loan and opening up a new chapter in your quest to pay down debt. But, before we go into that, make sure this method of eliminating debt is right for you.
Here are some factors to consider:
- What does your credit score look like? If you have a good credit score, you will get a better interest rate and better loan terms. Typically, this starts at 670 for FICO scores.
- What interest rate is your current debt consolidation loan? On average, you can expect to pay about 9.41% on a personal loan, says data from Experian. Meanwhile, the typical credit score card charges about 16% for interest. So, if you can get a personal loan for a lower interest rate than what you are currently paying, consolidating that debt could help you save some money on interest.
- Have you formulated a plan for the repayment of your loan? One thing to think about is how you plan on repaying your debt. Credit score cards are tempting because they offer “revolving credit score,” meaning the moment you pay off part of the balance, you can use it once it is freed up and the payment has been applied. So, if you keep using the card even though it has been paid off, and you are only paying the minimum amount due instead of the full balance, you are always going to be in debt. So, make sure you are ready to stick to a plan of repayment, so you can climb out of debt.
FAQs About Debt Consolidation Loan
Will Debt Consolidation Hurt My Credit Score?
At first, it may appear to hurt your credit score. To get a debt consolidation loan, for instance, there will need to be a hard pull done on your credit score.
In addition, opening a new line of credit will temporarily lower your score. But, with your continued on-time payments and your lowered credit score utilization ratio, you should see your scores climb.
Are Debt Consolidation Loans Easy to Get?
Yes, but it depends on your credit score. Physically getting the loan is easy, as you can do it right from your computer or mobile device. However, the biggest issue with getting a debt consolidation loan is the borrower’s credit scores.
Having a good credit score will make it easy to get a loan with a lower interest rate and terms. Meanwhile, those with bad credit scores will have to contend with higher interest and lesser loan amounts.
What Debt Consolidation Companies Are Legitimate?
All of the companies featured on the lending networks listed in our article are safe ways of getting debt consolidation loans. These are legitimate companies, but they do vary when it comes to the terms and conditions of the loans and their interest rate.
It is best to go with a local bank or credit union if you would like to pursue a debt consolidation loan, but we know that is not always feasible.
However, you can rest assured that local banks, credit unions, and the loan companies listed on Personal Loans, BadCreditLoans, MoneyMutual, and CashUSA are all safe to use.
Can Debt Consolidation Help with Payday Loans?
The answer to this is yes. With payday loans, you must pay back the debt consolidation on your next payday. But, some borrowers are not able to do this, and, thus, more fees are incurred. As a result, the cost of borrowing keeps going up.
Payday loan debt consolidation can help by combining these high-interest loans into one payment using a personal loan. Personal loans for debt consolidation feature lower fees and APR compared to payday loans, whose interest is incredibly high (400% in some cases). Therefore, they make it easier for borrowers to get out of debt.
Why Are Personal Loans for Debt Consolidation Helpful?
Personal loans for debt consolidation are helpful in a variety of ways. For starters, it helps you pay everything with one single, handy payment every month.
Second, debt consolidation loans are typically lower when it comes to their interest rates, which saves you money.
Third, it is a great way to get out of debt that continues to roll over, such as payday loans that can compound if they are not paid back on the due date.
It is also an excellent way to raise your credit score, provided you can avoid using your credit card debt/taking out additional loans as you pay off the debt consolidation loan.
Conclusion: Does Consolidating Your Loans Affect Your Credit Score?
As you can see, it is easy to get a debt consolidation loan if you need it. However, you must be ready to change your spending habits. These loans can only work if you are willing to stop using your revolving line of credit/opening up other installment loans in the process.
So, if you are ready to change your spending and pay off that debt once and for all, and bring up your credit score in the process, a debt consolidation loan could be for you. However, make sure to read all terms and conditions of your loans for debt consolidation carefully before signing. Good luck!