The Best Credit Card Consolidation Programs: Easy Credit Relief Options

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The Best Credit Card Consolidation Programs You Need to Know About

Your credit card debt is building up and you’re wondering if it’s time to start looking for the best credit card consolidation programs.  Credit cards are great to have on hand in the event of an emergency. But if you get stuck in a pile of credit card debt, it’s extremely difficult to get out. High-interest and late fees add up quickly and falling behind with payments will affect your credit score negatively. women feeling relief from credit card debt

So, what should you do? The first thing on your checklist should be to gather all of your credit cards and put them away. You shouldn’t use them until you can control the debt.

The next thing you can do is to contact a credit card consolidation company. There are many programs available today that can help you balance your debt.

In this article, we’re discussing the best credit card consolidation programs. Keep reading to learn more.

Two Types of the Best Credit Card Consolidation Programs

Before you start your research, you need to know what you’re looking for. There are two different kinds of debt consolidation loan programs.

Secured

A secured loan will cost you collateral. One of the most common types of secured debt consolidation loans lies in an equity refinance. But if you don’t own your home, you can also use your car or other assets.

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These loans are usually fairly easy to obtain because there is little risk to the lender. You can also find reasonable interest rates that might be tax-deductible.

Unsecured

With an unsecured loan, you won’t be forced to put up any collateral which makes the loan less risky to you. If you default on this type of loan, however, it will affect your credit score negatively.

Obtaining an unsecured loan is more difficult than getting a secured loan and loan amounts are likely to be smaller. You may also risk higher interest rates which could make the loan harder to pay off.

Best Credit Card Consolidation Programs

There are several pros and cons to finding the best credit card consolidation programs. On the upside, you’ll find short-term relief because you can lower your interest rate and reduce the amount you pay each month. A credit card consolidation loan can make it easier to stay organized and help you maintain your credit.

One of the cons of this type of loan, however, is risk. Whether you’re using collateral or not, if you have trouble with payments, it can affect you negatively.

It’s important to carefully weigh the pros and cons when considering the best credit card consolidation programs available. Here are seven lenders to help you decide.

Prosper

With a minimum credit score of 640, you can consider a loan through Prosper. They provide unsecured personal loans from $2000 to $35000 with competitive interest rates.

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Be prepared to pay an origination fee of 1% to 5% of your loan. And, you will be penalized 5% of your outstanding amount for late payments and $15 for unsuccessful payments.

OneMain

If you don’t have good credit you might have better luck with OneMain. With the option to apply online or at one of their 1600 locations, you can find a secured loan with this lender in 44 states.

They have an A+ rating and they are accredited by the Better Business Bureau, or BBB.

LightStream

LightStream is a division of SunTrust Bank. You can find flexible terms from 24 to 84 months without fees. But you’ll need to have good credit to qualify.

This lender offers debt consolidation loans starting at $5000 to $100,000 with low-interest rates. Interest rates are as low a 5.49% to 14.69%. You can also get an AutoPay discount.

Upstart

This company accepts customers with a short credit history for loans from $1000 to $50,000. You’ll enjoy interest rates from 7.37% to 29.99% on three or five-year loans. Interest rates are determined by job history, educational major and even grades or test scores.

Avant

Avant is available in 46 states and the District of Columbia. They will allow you to borrow $2000 to $35,000 and your funds will be available as soon as the next business day. Avant has an A+ lender rating and they are accredited by the Better Business Bureau, or BBB.

You can access this loan with lower than average credit scores but you’ll probably pay higher interest rates.

PersonalLoans.com

PersonalLoans.com will connect you with lenders from all fifty states. Loans go up to $35,000 with APRs that range from 5.99% to 35.99%. Loans included may be peer-to-peer loans, bank loans, or installment loans.

Peer-to-peer loans are more common for those with bad credit. These lenders base interest rates and loan amounts on personal factors in lieu of credit history.

Keep in mind that this is only a referral site which can make it difficult to know what type of interest rate you’ll get.

online researching credit card debt consolidation

Lending Club

Find a loan with Lending Club from $1000 to $40,000 with interest rates from 5.99% to 35.89% depending on your credit history. But you can also ask this lender for peer-to-peer loans.

You will need a credit score of at least 600 with Lending Club. They have an A+ rating and are accredited by the BBB.

Final Thoughts

Make sure to do your research before jumping into any credit card consolidation loan. There are many lenders that fall into the category of scams and they can be difficult to detect.

Beware of debt management companies. These companies work to settle debt with your creditors and it can negatively impact your credit score. You should be the one to initiate contact with a lender so don’t allow a lender to push you into something that you’re not comfortable with.

There should be no need for upfront fees when dealing with a debt consolidation company. Also, beware of creditors that promise guarantees without knowing your income, credit score and/or other important personal information.

If you have questions about finding the best credit card consolidation programs, contact us. You can also subscribe to our newsletter for other tips and financial advice.

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8 Comments

  1. Hi Patrick,

    I found this post to be very informative and detailed! I didn’t know there was so many options out there and I’m glad you explored a bit of each one.

    As you said before, personal finance is complex, so I’m interested in navigating other parts of your site for other helpful topics.

    I am looking to consolidate some of my debt and lower my payments.  Which credit card debt consolidation program do you recommend?

    • Brendyn,

      Happy to hear you found the post informative.

      Yes there are a lot of options out there.  I’ve only covered them in summary, so I recommend that you research some before you make a decision on which one is best for you. 

      I created the list to help those looking to consolidate their credit cards get a head start. 

      I don’t have a particular favorite, so just pick a few that look like they may be a good fit and visit their website for more information.

      I intend to do more detailed product reviews in the future, so when you revisit the site keep an eye out for them.

  2. Hello Patrick,

    Credit card debt can be very stressful.

    This article presented some awesome solutions.

    The purpose in consolidating the loans is to make the payment more feasible, right?

    Or, is the goal to cut down on interest?

    I understand now wanting to send out several different payments, but I want to understand the situations where this would be a wise choice.

    Can you help me with that?

    • Hi Tiffany,

      The main objective with any credit card consolidation program is to reduce the payments and the interest you pay.

      It’s great when you can consolidate all your payments into one, but if you’re paying more fees or your payment goes up, it doesn’t really help you.

      Before you consolidate your credit card debt make sure you understand the fine print and that over the long run you are shorting your term and saving on interest.

      Without that, it’s really not worth it.

      Thanks.

  3. Hi Patrick,

    Sound Advice here.

    The problem with borrowing is that everyone wants to lend you money when you do not need it. When you are desperate, loans become expensive or not available.

    If the consolidation loan has a high interest rate you are swapping one debt for another.

    You are right that getting good advice is really important..

    Make sure your new repayments are something you really can afford. Better to pay regularly than struggle because your credit record suffers every time you miss a payment.

    I like the idea of peer to peer loans. How do they work?

    • This is true.

      However if you have good credit and you are searching for a new home a new car or need a student loan most consumers don’t have any trouble getting credit.

      It’s those with terrible credit that find lending is scarce and when they can get it they are usually taken advantage of.

      I would not recommend swapping out debt with a credit card consolidation program if the rate and payments end up higher than what you are currently paying.  Like you point out seek advice before committing yourself to such a program.

      Peer to peer loans are essentially made by individuals and investors as opposed to a financial institutions. People that have extra resources offer to lend money to other individuals and businesses.

      There are P2P services online that easily match borrowers and lenders.  It’s one source of funding, but it is not always the best of cheapest.

  4. Hei Patrick,

    Thanks for your really informative post.

    It is good that there are a lot of options out there now to make it easier for most people to consolidate their credit cards.

    One thing I did after consolidating my credit cards about 5 years ago is closed the accounts of the old cards, so I wasn’t tempted to use them even in an emergency. I now have a single card and only try to use it for emergency situations now.

    Another good idea if you do want to hold onto your credit cards just in case you need them is to put them in a cup of water and place them in the freezer, that way when you do go to use them you have the period it takes to defrost them to consider if you really need to spend that money…

    • Hei Tony,

      These are outstanding ideas.  Sounds to me like you are very disciplined.  

      Credit card debt consolidation programs are a good idea when you are in trouble. The idea is not to get in trouble again once you have fixed it.  Looks like you have applied some common sense personal finance rules.

      I really like your idea about literally freezing your credit cards.  By the time the “cooling off period” occurs most people will have come to their senses.

      Great comments.  Thanks.

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