Consolidation Loans : How to Pay Off Debt with Low Interest Loans

Looking for a personal loan to pay off your debts? Do you need a loan despite having a low or poor credit score? You can read through our guide about personal loan offers.

American consumers typically have many uses for personal loans and with as many different options there are, it is important to understand the differences as well as what it takes to be approved for them. There are loans on the market to meet the needs of pretty much any consumer, although some people with lower credit scores may have to do a bit more research than someone who has a more stellar credit history. Some of the options for loans that people in the US can apply for are debt consolidation loans, unsecured loans, secured loans, and payday loans. Each of these options is very different from the others, but they all result in helping the consumer meet a need, whether it’s an unexpected expense or if they are simply reorganizing their debt. This article will serve as a guide to the basic qualifications to be approved for a loan, the differences between each option, as well as a few companies that have easy to obtain loans with quick funding.

The first thing a consumer who is looking to apply for a personal loan should consider is what items they need to present to the loan officer. For the most part, if you have a file with the same items, you are pretty safe to apply for any loan unless it’s a special circumstance. Anyone applying for a loan of any type will need proof of their identity. This is typically some sort of state identification to prevent identity theft. Some loan companies will also want a piece of mail with your address listed. Besides the proof of identification, you will need to prove your income by providing some sort of official documentation; this is usually a pay stub from your employer. Also, some financial institutions will require a few references. These are people that they can call to verify your character and ethics, but they could also call them if they ever have difficulty reaching you about your payments.

Types of loans

One type of loan that many companies offer is debt consolidation loans. This is the option for someone who wants to obtain a loan to pay off other debts. They do this because it is often easier to simply pay one loan payment instead of paying credit cards and other debts separately. Also, depending on the specific situation, the interest rate on the debt consolidation loan may be much better than their other rates.

Another type of loan that many American consumers apply for is the unsecured loan. Most loan companies and banks will offer this loan and they tend to be one of the most widely used options because they are used for all types of situations. Basically, an unsecured loan relies solely on the applicant’s creditworthiness instead of requiring collateral as a secured loan does. This means that you would typically need a higher credit score to be approved for an unsecured loan than you would if you were applying for a secured option. This is because these loans are riskier for the lender. After all, they can’t take your collateral if you default on your payments. With an unsecured loan, if a person defaults, the lender would either have to take the person to court or send their file to a collection agency.

Same-day loans are another option for people seeking to borrow money for any reason. Typically, these are used for last-minute emergencies as most loans take at least a day for the person to receive the funding. Most options that fall into this category are going to be PayDay loans, which are borrowed with the understanding that they will be paid back within one pay period. There are a few lenders who will fund installment loans within one day, but the rates are usually high. Some of these options are places like Tower Loan, various finance companies that most people can find in their cities, etc.

Options for Loans

SOFI

SoFI is a one-stop-shop for almost any loan a person could need. Not only do they offer debt consolidation loans, but they also offer an easy way to apply, low rates, and flexible terms for your loan. Their interest rates range from 5.99% and go up to 18.85% and there are also no fees to start your loan. The top reasons people use SoFi loans are for credit card consolidation, home improvements, relocation assistance, and medical procedures. They are one of the top lenders on the market because of their customer-first approach, the ease of their application process, and their reputation. Keep in mind that SoFi offers unsecured loans, which means you will need a fairly good score to qualify. The lowest credit score they will accept is 680.

Upstart

This company has loans for pretty much any reason and they make it easy to check your interest rate on their website. They offer the usual personal loans, debt and credit card consolidation loans, but they also go into detail about helping pay for weddings, medical issues, and relocation. Upstart offers loans of $1,000- $50,000 with terms of 3 or 5 years. Their listed interest rates are 8.94% - 35.99%. The website states that 99% of personal loan funds are sent the business day after signing, which is pretty typical. Another great thing about Upstart is that there is no prepayment penalty, which means you can pay the loan off early without having an additional fee.

OppLoans

OppLoans is a great option for anyone looking for either bad credit loans, no credit check loans, or installment loans. Some of the advantages to OppLoans is that you will get a quick decision, funding within the next business day, lower APRs than many companies, as well as personal service that you won’t get from many other companies. While they may not be as known as some options on this list, they have glowing reviews from financial advice companies such as Trustpilot, Credit Karma, and Lendingtree.

Avant

Avant is a lending company that offers personal loans to consumers who have fair or bad credit. Their annual percentage rate is 9.95%- 35.99% and you can get a loan ranging from $2,000- $35, 000 to be used for any reason. Avant, unlike other companies on this list, actually offers secured loan options and you can even change your repayment date. They will with credit scores as low as 550 and the terms of the loans are between 2 and 5 years, which is pretty typical.

Prosper

Prosper is a peer-to-peer lender that offers rates that are comparable to many other lenders. One great thing about it is that it has a bit of a wider range for loan amounts than others on this list; with Proper, you can between up to $40,000 to aid your financial needs. Their APR is between 7.95% and 35.99% and the lowest credit score they will work with is 640. Many people also state that Proper is best for people who want to include a co-borrower on their application.

Conclusion

Finding a personal loan that you can qualify for as well as one that fits your specific needs can be challenging, but this list of options will help. It is important to consider not only how much money you need to borrow, but also the terms. Many loans have much higher rates and the sometimes desperate situation could cause people to begin a loan contact that is not in their favor. These situations typically occur with people who need their money as soon as possible. Most loan options will take a day or so to fund the loans, but there are a few where you will get your money the same day. These are usually payday loans or other loan companies you can find near where you live. While they can be useful, they should be used very cautiously