Whether you’re carrying multiple credit cards, paying a lot in interest, or simply have too many debts to keep track of, there are many reasons why debt consolidation could be an option worth checking into.
Lower interest rate
Many debt consolidation loan companies offer interest rates much lower than credit cards and traditional loans, giving consumers a way to pay off debt and save money in interest. Many of the leading personal loan companies offer fixed rates ranging from 5.99% to $29.99%, depending on credit worthiness. One of our top picks is newcomer Best Egg®. Its website offers this example to show just how much customers can save over the life of a debt consolidation loan:
Lower combined monthly payment
Another important benefit of debt consolidation is a more manageable monthly payment. With lower interest rates come lower payments, which can be much more budget friendly. Plus, paying less each month can give you a little extra cash at the end of the month to put toward your savings.
Only one payment due date to remember
Even those of us who are responsible with how we manage our debt can fall behind on payments simply because there are too many payment due dates to remember. By streamlining your bills into one fixed monthly payment, you can stop juggling due dates, making it easier to pay your bills on time.
Fixed repayment schedule
When you’re trying to get rid of debt, it helps knowing that there’s a definite date when your loan will be repaid. Revolving credit card accounts are just that – revolving. With many personal debt consolidation loans you can choose to repay your loan in 3 years or 5 years – a few offer even more flexible repayment terms. That gives you a clear plan for getting rid of the debt in the timeframe you choose.
There are numerous benefits to consolidating your debt with a low-interest personal loan. These three companies are our picks for best debt consolidation loans:
#1 Best Egg (MyBestEgg.com)
#2 Prosper (Prosper.com)
#3 Lending Club (LendingClub.com)