What is the top 5 debt consolidation companies?
Best overall: Accredited Debt Relief
It has an outstanding 4.9 rating with Trustpilot (as of January 26, 2024) and an A+ grade with the Better Business Bureau (BBB). Working with Accredited Debt Relief starts with a free phone or online consultation.
- Upgrade: Best overall.
- SoFi: Best for no fees.
- Happy Money: Best for paying off credit card debt.
- LightStream: Best for low rates.
- Universal Credit: Best for bad credit.
- Best Egg: Best for secured loan option.
- Discover: Best for fast funding.
- Achieve – Best for Paying off Credit Card Debt.
- Discover – Best for No Interest If Repaid Withing 30 Days.
- Best Egg – Best for Debt Consolidation Perks.
- LendingClub – Best for Peer-To-Peer Lending.
- LightStream – Best for Low Interest Rates.
- SoFi – Best for Large Loan Amounts.
Best overall: Accredited Debt Relief
It has an outstanding 4.9 rating with Trustpilot (as of January 26, 2024) and an A+ grade with the Better Business Bureau (BBB). Working with Accredited Debt Relief starts with a free phone or online consultation.
- U.S. Bank Visa® Platinum Card. Transfer Intro APR: 0% for 21 billing cycles. ...
- Citi Simplicity® Card. Transfer Intro APR: 0% for 21 months. ...
- Fifth Third 1% Cash/Back Card. Transfer Intro APR: 0% for 21 months. ...
- Citi® Diamond Preferred® Card. ...
- Wells Fargo Reflect® Card.
Many clients have left positive comments about National Debt Relief's helpfulness and overall client service in guiding them through the debt negotiation process. National Debt Relief has an A+ rating with the Better Business Bureau and is BBB-accredited. The company earns a 4.58-star rating based on client reviews.
Consolidating your debt can lower your monthly payments, but it can also cause a temporary dip in your credit score.
If you're looking for a large debt consolidation loan, Wells Fargo might be able to help. It offers loans up to $100,000 and repayment terms as long as 12 to 84 months. Wells Fargo loans don't include any types of fees, such as origination fees, late fees and prepayment penalties.
- Make a list of all your credit card debts.
- Make a budget.
- Create a strategy to pay down debt.
- Pay more than your minimum payment whenever possible.
- Set goals and timeline for repayment.
- Consolidate your debt.
- Implement a debt management plan.
Fees for debt consolidation are around 4% with a debt consolidation loan and 3.12% with a balance transfer credit card, on average. The fees you need to watch out for when consolidating debt are origination fees on loans and balance transfer fees on credit cards.
Is there a federal program to get out of debt?
Federal government debt relief programs in the form of financial help include long-time programs such as Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps), Temporary Assistance for Needy Families (TANF), Medicaid, Children's Health Insurance Program (CHIP), unemployment benefits and more.
CNBC Select researched more than a dozen debt relief companies, and New Era Debt Solutions was the best overall, thanks to its (slightly) lower fees and high customer satisfaction ratings. If you have a large amount of debt (think more than $10,000), then National Debt Relief is also a strong choice.
Yes, but this will depend on your unique situation. If your account is still open and in good standing, you should still be able to use your credit card after consolidation. But it's important to maintain good spending habits and to continue making your payments on time.
It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
Debt consolidation loan
Banks, credit unions, and installment loan lenders may offer debt consolidation loans. These loans convert many of your debts into one loan payment, simplifying how many payments you have to make. These offers also might be for lower interest rates than what you're currently paying.
Taking out a debt consolidation loan may help put you on a faster track to total payoff, especially if you have significant credit card debt. Credit cards don't have a set timeline for paying off a balance, but a consolidation loan has fixed monthly payments with a clear beginning and end to the loan.
How Will Freedom Debt Relief Affect My Credit? Debt relief can negatively affect credit scores because creditors typically aren't willing to negotiate until you're behind on payments. Payment history carries the most weight for FICO score calculations, so if you're paying late or not at all, your score can take a hit.
National Debt Relief charges a fee of 18%-25% of enrolled debt. This means if you came into the program with $20,000 in debt, expect to pay NDR between $3,600 and $5,000 in fees. There may be additional service or maintenance fees to pay depending on your state.
In addition, to protect the most vulnerable borrowers from the worst consequences of missed payments following the payment restart, the Department is instituting a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments ...
Consolidating debt can be a good idea if you have good credit and can qualify for better terms than what you have now and you can afford the new monthly payments. However, you might think twice about it if your credit needs some work, your debt burden is small or your debt situation is dire.
Why is it so hard to get a debt consolidation loan?
Lenders might not advertise it, but most of them have a minimum credit score required to get a loan. If your score is less than 670, you might be out of luck for a debt consolidation loan. Even if you're over 670, a problematic debt-to-income ratio (more on that below) or payment history could derail your loan.
| Minimum credit score | 600 |
|---|---|
| APR | 9.57% - 35.99% |
| Loan length | 24 to 60 months |
| Loan amount | $1,000 to $40,000 |
| Origination fee | 1.00% - 8.00% |
Freedom Debt Relief is accredited by the American Fair Credit Council and the International Association of Professional Debt Arbitrators. The Consumer Financial Protection Bureau received 120 complaints in 2022 about Freedom Debt Relief.
| Borrower credit rating | Score range | Estimated APR |
|---|---|---|
| Excellent | 720-850. | 14.21%. |
| Good | 690-719. | 17.00%. |
| Fair | 630-689. | 19.95%. |
| Bad | 300-629. | 22.20%. |
Credit unions: Credit unions tend to offer lower interest rates on debt consolidation loans for fair- or bad-credit borrowers than other types of lenders. You'll need to become a member of the credit union before applying.
