Debt Consolidation & Relief

Updated: Jul 21, 2020
Advertiser Disclosure
× Advertiser Disclosure

Market Pro Secure® is an independent payment card comparison service supported by advertisers, a complete list of which can be seen in our Editorial Guidelines. Even though some of these advertisers are financial product providers and credit card issuers, our paid partnerships don't affect card ratings or the Best Card Picks on our website. We don't post any content that is provided or commissioned by any of our partners. However, our paid partnerships may affect how and where products appear on our site, including the order in which they are presented within listing categories. This order may also be affected by our website rules, as well as the likelihood of the applicant’s credit approval. We can't offer any warranty for the accuracy of the credit card information we share on our website, even though we do our best to keep the Terms and Conditions, rates, and other credit card details up-to-date. For more accurate information, click "APPLY NOW" to get transferred to the credit card issuer's official website. Market Pro Secure® doesn't include all available payment cards in the marketplace.

Search, compare, & securely apply online for selected debt consolidation offers and debt relief services.

Making mistakes with finances is a risk you simply shouldn't take. Whether it's overextending your credit or running into unexpected expenses that drive you into debt, this debt spiral can turn into a real financial abyss that, if left untreated, can leave you on the verge of bankruptcy. Whether it's a credit card debt, a car loan, or mortgage, everyone is facing some type of financial obligation. Payment deadlines, due dates, everyone has these obligations. However, if you already have debt issues and need to consolidate them in one simple loan, check the provided debt relief offers and debt consolidation services below.

See Debt Consolidation & Relief Suggestions Summary
Editor's suggestion: Debt Consolidation & Relief - Nov 30, 2020

An emergency or unplanned calamity can cause you to lose control of your finances. Short-term disability or an unexpected job loss might affect your ability to make your payments in due time.

In case of any illness, medical bills can pile up, causing you to spend your credit card limit. A lot of these problems can be solved with debt relief loans.

We at Market Pro Secure® take pride in providing detailed information regarding financial security and options people have but aren’t aware of.

To make sure you avoid the aforementioned risk of falling into an endless debt spiral, we’re going to inform you on what approach you should take when considering and handling your debt consolidation.

By learning the subtleties of debt consolidation, you can improve your lifestyle and wellbeing, and ensure a safer and secure financial future for you and your family.

What Is Debt Consolidation?

Debt relief loans allows you to take your multiple debts and combine them into a single debt. Thus, you can take it as a single loan with much better terms, such as a lower interest rate. Consolidating debt provides a new loan that covers your old debts. The main goal is to put all your debt into one loan payment.

In short, Debt Consolidation allows you to get rid of all the small loans so that you can gain back control over your finances again. If you’re in debt with multiple creditors, this is the best financial option available. Take all your outstanding credit and put it into one loan with a convenient and single monthly payment.

How Debt Consolidation Works

While this is the only way out for many people, debt consolidation can be a tiring and quite a long process. The truth is, it’s well worth the effort, as it provides a way out from a financial setback, and it can be tailored to suit your exact needs.

With that in mind, here are 4 great ways to consolidate your debt in the most effective way and at the most convenient terms.

1. Credit cards with a 0% balance transfer

This is the best option for those who have good to excellent credit. Credit cards with a 0% balance transfer introduce zero introductory interest rate for the grace period. That period is usually between 12 and 18 months. The only two fees to think about are the annual and balance transfer fees, and that’s it.

2. Lines of credit/home equity loans

This is a good option available to all who own a home. You get a loan with a fixed interest rate that is based on the equity in your home. A line of credit is a bit different than that. It’s basically the same as a credit card, the only difference being a variable interest rate.

What makes this loan stand out is that you can get it with average credit and at lower interest rates than an unsecured loan.

Never miss the payment, as you can lose your home.

3. Personal loans

The Personal loans option falls under the category of unsecured loans, and it can be acquired from a number of different providers such as an online lender, a credit union, or a bank. The trick is to find the best providers with the most convenient terms. For example, online lenders mostly offer higher interest rates than credit unions.

Personal loans allow for an early pay-off free of any charge while the originating fees range between 1% and 5%. The better your credit, the lower the rate.

Make sure that your monthly payment and interest rate are locked. If you aren’t sure, ask your provider whether your payment period is fixed, as personal loans include fixed payment periods.

4. 401(k) Loan

This type of loan should be your last resort due to the high level of risk involved. This type of loan doesn’t show up on your credit report and involves lower interest rates than an unsecured loan. That aside, the problem is what happens if you miss your payments.

In case you can’t repay or miss more than two payments, you’re prone to a substantial penalty that could possibly drive you to a real financial crisis. If you quit or lose your job, you’ll be required to pay your loan off in 60 days, even though it’s due in five years.

Debt Consolidation and Your Credit Score

Since your financial security is our top priority, the best advice we can give is to take control of your credit score right from the start. The only things that can guarantee a safe future are smart financial habits.

Everything starts with your credit score, and it’s paramount to understand it fully so that you can make educated financial decisions. This will help you avoid many difficulties along the way.

Your credit score depends on 5 key elements:

  • Payment history – makes up 35% of your credit score
  • Debt – what you owe makes up 30% of your credit score
  • Credit history – makes up 15% of your credit score
  • Credit file10% of your credit score depends on how diverse is your credit file
  • Recent credit inquiries – make up 10% of your credit score

You need to take all these key elements into consideration if you want to ensure a good credit score. More importantly, you can avoid a lot of bad financial situations if you pay attention to these elements from the beginning.

Debt Consolidation – 12 Benefits

Depending on how you use debt consolidation, it can have a positive or negative impact on your credit score.

Here are the following benefits of debt consolidation:

  1. Debt consolidation helps improve your credit score by consolidating all your debts into one big loan.
  2. It allows for better financial control.
  3. You have only one monthly payment to worry about instead of several.
  4. Keeping track of one payment is much easier.
  5. Debt consolidation includes lower interest rates and a fixed term.
  6. Paying on time looks good on your credit score and report.
  7. You won’t have to worry about several different due dates, which will decrease your chances of missing a payment.
  8. High-interest debts include a lower amount of late fees, which positively affects your credit utilization by declining it, which will improve your credit.
  9. It includes a lower ratio of credit utilization.
  10. Debt relief loan helps boost your credit score by paying off all your late payments.
  11. It helps diversify your credit file.
  12. Debt consolidation allows you to reap the benefits of both the installment of a personal loan and a credit card revolving loan.

Debt Consolidation – The Downsides

Now, despite the fact that there are a lot of positive things about debt consolidation, it isn’t without downsides:

  • Since debt relief loans fall into the category of personal loans, it will require your credit report, which might slightly reduce your credit score.
  • Debt consolidation can pose a risk to those with poor financial habits. In the worst-case scenario, you’ll end up with more debt, which is a no-way-out situation.

That’s why debt consolidation shouldn’t be taken lightly.

3 Pro Tips on Debt Consolidation

1. Make sure debt relief loan is favorable for you

No one can tell you for sure if debt consolidation will work in your situation or not. However, you can consider a few things before you make a decision:

  • The interest rate has to be lower than with your original loan.
  • Loans with lower monthly payments usually work in most situations.
  • Shorter-term loans include less interest, while longer-term loans include lower monthly payments.

2. Only go with lower interest rates

Debt consolidation is only favorable for you if you can get a loan with lower interest rates than your current loans or monthly payments or debts.

3. Pay special attention to favorable factors

Debt consolidation is only favorable if:

  • The amount of your total debt doesn’t go over 40% of your gross income. The important thing to keep in mind is that mortgage is excluded from your total debt in this case.
  • You can make all your payments toward your debt on time.
  • You can qualify for a debt consolidation loan with 0% interest rate.
  • You have healthy and smart financial habits.

Debt Consolidation Loan Offers Recap

Debt Consolidation & Relief Loans Frequently Asked Questions

Is there a difference between unsecured and secured loans?2020-06-09T22:32:03-05:00

Debt consolidation loans fall into the category of both secured and unsecured loans. These credit facilities depend on the lenders. The difference between the two is that secured loans require some kind of collateral to get a loan.

Any asset that can be liquidated or equity, like a home, can be used to secure the loan value. Secured loans pose more risk for the user simply because the user can lose their assets and equity in case they can’t pay off what they owe.

Related: Check Secured Card Offers (Explained).

Is debt consolidation a good or bad idea?2020-06-09T22:20:21-05:00

No one can give you the right answer to this question, as people have different needs and financial situations. We would suggest that you go through our pro tips to determine if debt consolidation will work in your case.

If you have a good credit score, steady incomes, and healthy financial habits, this could be a great solution to your financial problems.

Now, if you have bad spending habits, bad or no credit, no steady cash flow, a risky budget, and more than one credit card, debt consolidation might not be the best financial option for you.

What things should I consider before applying?2020-06-09T22:29:42-05:00

Be mindful of your monthly cash flow, credit score and history, and overall debt amount before you commit. You have to be comfortable with your monthly payment to make things work in your favor. Make sure you don’t accept any hard credit checks.

What if my credit is poor and I want a debt consolidation loan?2020-06-09T22:28:01-05:00

Poor credit is one of the biggest reasons people are turned down when applying for any type of loan. It only allows you to apply for consolidation loans with much higher interest rates.

If your credit is bad or poor, the best thing you can do is some research on which loan providers offer the best deal for you. Check their monthly payments and annual percentage rates to see if you can afford to commit.

Is there a difference between debt settlement and debt consolidation?2020-06-09T22:35:25-05:00

Yes, there is a big difference between the two.

Debt settlement involves a debt counselor who provides their financial expertise and skills to help you find the best financial solution to your problems. They can negotiate to get you a better settlement amount to decrease your debt.

On the other hand, debt consolidation means that you’re getting a chance to consolidate all that you owe into one loan facility to gain control over your debt and track your monthly payments much easier.

Debt consolidation is a better option simply because a debt settlement strategy includes additional costs and expenses that you have to cover for. Debt counselors don’t work for free, and these costs add up to your overall debt amount. However, you can speak to a debt counselor before making a settlement to see what your options are.

Related: Credit Repair Services

Market Pro Secure® has made it very easy to find the best credit cards for you. All you need to do is find the cards you like, click "Save Card", and then compare them side-by-side.