The loan industry is likely the most rife with innovative concepts and businesses in the fintech ecosystem.
To make life much simpler for both borrowers and lenders, fintech lending businesses leverage technologies like artificial intelligence, big data, and even blockchain. They let borrowers receive their money faster than going into a physical financial institution and provide lenders quick access to the information they need to authorize loans.
The debt category that has grown the quickest during the past ten years is personal loans. This is partly attributable to the growth of peer-to-peer lending businesses and fintech firms, which have made it more affordable and simple than ever before to secure these loans.
Personal loans are a type of installment credit that must be repaid over a certain period of time in regular installments. Since personal loans sometimes offer lower interest rates than credit cards and allow borrowers to fund almost any item, including home improvements, moving expenses, and even even student loan debt, many people view them as an inexpensive alternative to credit cards. However, that does not imply that they are free funds. The most current figures from the Fed show that the average APR for personal loans is 11.23%. The typical interest rate on credit cards is currently 19.07%.
Debt consolidation might be a good approach to organize payments and perhaps lower interest rates if you're ready to take control of your budget. It can also result in cheaper loan payments each month.
This is due to the fact that personal loans frequently have cheaper interest rates than credit cards, medical loans, and other types of debt, especially if you have high to exceptional credit. You won't have to worry about the details of merging your other debts because a lot of lenders also provide direct payments to creditors of third parties.
The finest personal loans for consolidating debt include low annual percentage rates (APRs), flexible repayment schedules, and don't charge prepayment penalties, allowing you to pay off your debt early without incurring charges.
An indirect lending platform called Achieve (formerly FreedomPlus) provides personal loans guaranteed by Cross River Bank or MetaBank. Due to its flexible loan periods (two to five years) and loan amounts ($7,500 to $40,000), the lender, which was founded in 2014, is one of our top choices for debt consolidation loans.
These features make it simpler to combine a significant debt balance while cutting monthly payments and spreading out payments over a protracted period of time.
Achieve enables direct payment to creditors, similar to some of our other top choices. In fact, applicants are more likely to be approved for a loan if they direct pay 85% of the entire loan amount for debt relief.
However, depending on the interest rates on your existing loans, the very high APR Achieve charges may make it harder to reduce your debts and save money. The origination charge, which ranges from 1.99% to 4.99% of the loan amount, can further raise the cost of the loan. Before signing on the dotted line, examine the numbers if you're thinking about using Achieve for debt consolidation.
Pros & Cons
- Funds available within 48 hours
- Flexible repayment terms
- Allows co-borrowers
- Application is not entirely online
- Imposes a minimum income requirement
- High minimum loan amount
Eligibility: Applicants must have a credit score of at least 620 to qualify for a Achieve personal loan. Prospective borrowers also should have a minimum gross income of $21,500, keeping in mind that Achieve will not lend more than 35% of the borrower’s annual income. If you want to consolidate your other loans but don’t have a great credit score, Achieve allows both co-signers and co-applicants, with about 30% of borrowers having joint loans.
Loan uses: Achieve loans can be used to cover home improvement costs, wedding and travel expenses, medical costs, moving expenses and, most importantly, debt consolidation.
Turnaround time: Achieve says you could be approved for your loan on the same day you apply. You may be able to receive your funding in as little as 48 hours.
Discover provides personal loans in all 50 states, along with banking, credit cards, and retirement options for consumers. The site is unique for debt consolidation since it offers loans with durations up to seven years long and amounts ranging from $2,500 to $40,000, which is longer than many other personal loans. This implies that by spreading out your loan over a longer length of time, you may be able to minimize your monthly debt payment in addition to perhaps being eligible for a reduced interest rate.
Additionally, Discover competes with other major issuers of personal loans by charging only a late payment cost and no origination or prepayment penalties. When attempting to consolidate your debt and get control over your finances, Discover will also distribute money straight to creditors who are not your primary debtors. Finally, Discover distinguishes out because to its speedy funding, well-regarded customer service team, online application and mobile banking facilities.
Pros & Cons
- Option to pay off creditors directly
- No origination fees or prepayment penalties
- Directly pays creditors
- Charges late fees
- Low maximum loan amount
Eligibility: To qualify for a Discover personal loan for debt consolidation, prospective borrowers must have a minimum credit score of 660; the average Discover borrower has a score of 750. Discover does not require applicants to have a minimum credit history length, but applicants must demonstrate a minimum household income of $25,000 per year. Applicants also are evaluated based on their credit history, recent credit activities and other credit inquiries. Co-signers and co-applicants are not permitted.
Loan uses: Discover personal loans can be used for a number of personal uses—including debt consolidation. And, unlike some other personal loan providers, Discover loans can be used to cover small-business expenses. Even so, Discover is similar to other lenders in that customers cannot use a Discover loan to pay for post-secondary education, to pay off a secured loan or for illegal activity.
Turnaround time: Applicants generally receive a same-day decision. If approved, funds may be sent as soon as the next business day if the loan was funded on a weekday—and if there aren’t any typos or errors in the application. Otherwise, borrowers may not receive loan funds for up to seven days. Discover also can disperse funds directly to third-party creditors when a loan is being used for debt consolidation.
All states, with the exception of West Virginia, Vermont, and Iowa, offer accessible online and mobile credit and banking services via Upgrade. Over 10 million applicants have received credit totaling over $3 billion since the platform's establishment in 2017, and it has continued to grow its web and mobile capabilities. Although loan funding may take up to four working days, Upgrade offers loans to borrowers with bad credit histories. And probably most crucially, if you use a loan to combine your debts, Upgrade will make direct payments to your other creditors.
The maximum interest rates are more than those charged by the other lenders on our list. But if you want to combine high-interest loans, Upgrade is still a versatile choice because loan amounts may be as little as $1,000 and as high as $50,000. There are loan lengths of three and five years available. If paying off your combined debts as fast as possible is your objective, there is also no prepayment penalty, which allows you to save money. But keep in mind that these advantages are offset by Upgrade's origination cost, which ranges from 1.85% to 8.99% of the loan amount.
Pros & Cons
- Low minimum credit score requirement
- Borrowers can use loans to cover business expenses
- Offers direct lender payoff for debt consolidation loans
- High APR range
- Charges fees for origination, late payment and insufficient funds
- Only offers two loan repayment periods
Eligibility: Upgrade applicants generally must have a minimum credit score of 580 to qualify for a personal loan. This makes it an accessible option for those with fair credit who want to consolidate their debt. What’s more, Upgrade applicants aren’t required to meet a minimum income requirement. Still, the average Upgrade borrower makes over $95,000 per year. Upgrade further increases loan accessibility by allowing both co-signers and co-borrowers.
Loan uses: Loans from Upgrade must be used to pay off credit cards, consolidate other debt, make home improvements or pay for other large purchases. Unlike some other lenders, Upgrade also offers direct payment to third-party creditors, though it can take longer for these funds to be processed.
Turnaround time: Once an Upgrade loan is approved, it generally takes up to four business days for a borrower to receive the funds. However, if Upgrade is directly paying off a borrower’s loans to a third-party lender, it can take up to two weeks for the funds to clear.
4- Priority Plus Financial
A new generation of debt consolidation businesses that are focusing on American customers includes Priority Plus Financial and priorityplusfinancial.com. They often reach out to customers by cold calling, direct mail, and online advertisements. In general, they seek out customers with less-than-perfect credit and entice them with cheap interest rates.
The State of California is home to various brokers that Priority Plus Financial uses. By providing you with several alternatives from various lenders, we assist you in finding the ideal loan for your present position. For first-time borrowers, Priority Plus Financial offers annual percentage rates (APRs) ranging from 5.49% APR (AA) to 29.99% APR, with the lowest rates being provided to the most creditworthy clients. The smallest loan is $5,000.00. The most you can borrow is $100,000. The following requirements must be met in order for you to be eligible: (a) you must continue to meet the requirements for this prescreened offer; (b) your credit report, application, and credit history must meet our pre-established credit criteria; (c) your monthly debt-to-income ratio cannot exceed 50%; and (d) you must have been employed for at least one (1) year.
Pros & Cons
1- RATES STARTING AT 5.49%
2- FIVE MINUTE APPLICATION
3- FUNDS IN YOUR ACCOUNT IN 24-48 HOURS
4- OPTIONS FOR ALL CREDIT SITUATIONS
5- AFFORDABLE OPTIONS
6- FIXED INTEREST RATES
7- NO PREPAYMENT PENALTIES
5- Point Break Financial
A new generation of debt consolidation businesses that are focusing on American customers includes Point Break Financial, PointBreakFinancial.com, Point Break Debt Relief, PointBreakDebtRelief.com, Mobilend, Mobilend.com, Financial Skyline, FinancialSkyline.com, Kuber Financial, and Kuberfinancial.com. They often reach out to customers by cold calling, direct mail, and online advertisements. In general, they seek out customers with less-than-perfect credit and entice them with cheap interest rates.
1- Pay just one lower payment
2- Stop debt collector harrassment
3- Get a fresh start without bankruptcy
4- Apply for up to $50,000 at a lower fixed rate
5- Pay off debt faster & more efficiently
6- Make one fixed monthly payment
7- Potentially save thousands per year
6- Beneficial Funding
Beneficial Funding is a faster and more convenient way to pay off your debt. Our customized plans lower your monthly payment and interest rates, allowing you to pay off loans in a shorter time.
Our mission is to stop financial surprises and keep you out of bankruptcy. We help you manage your debt and lower your lending stress. Our Finance Managers can answer any questions and guide you through the enrollment process when you call. Once your plan is ready, we’ll schedule an in-person meeting to be sure everything is perfect.
Beneficial Funding engages consumers through direct mail, cold calling and internet ads. Generally, they market to consumers with less than perfect credit and offer them low interest rates to consolidate debt.