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5 Features The Best Debt Consolidation Loans Always Offer

Apr 05, 2023
Mom trying to find the best debt consolidation loans while analyzing bills and on phone as son plays.

Lenders that offer the best debt consolidation loans go the extra mile to help people achieve their financial goals. While debt consolidation loans are designed to move wide-ranging debts into one monthly payment, some are more consumer-friendly than others.

Great Features Only the Best Debt Consolidation Loans Offer

If you've made the decision to bring credit cards, and other outstanding loan and bill balances under one umbrella, it’s important to examine the terms and conditions often offered by debt consolidation loans. After conducting some due diligence, you may discover only the best debt consolidation loans deliver the following.  


1: The Best Debt Consolidation Loans Offer Low Annual Percentage Rates

One of the most common reasons consumers consolidate debt involves saving money. To keep more of your hard-earned cash, it’s critical to leverage a debt consolidation product that offers a lower interest rate.

To determine whether you're selecting the best option to fulfill your financial needs, consider running your existing balances and interest rates through a debt consolidation calculator. Then compare your existing payoff plan against those of a debt consolidation product such as a Home Equity Loan, Personal Loan, or low rate credit card.

If the interest rates offered on your new debt consolidation loan are not quite as low as you would like them to be, improving your credit score could make a difference. Request a free copy of your credit report from Equifax, Experian, and TransUnion. Higher scores generally lead to lower interest rates, so be sure to correct any errors and clear up existing issues.



Reveal tips to get out of debt fast while exposing unrealistic expectations by downloading our guide:

Debt Consolidation: Expectations vs. Reality



2: The Best Debt Consolidation Loans Feature Minimal Lender Fees

The best debt consolidation loans apply only minimal fees in an effort to support borrowers’ goals of achieving financial independence. Despite the fundamental reason for seeking this solution, for-profit institutions too often weigh them down with additional costs, unlike not-for-profit credit unions which charge minimal fees. Below are some common fees borrowers may come across. Be sure to check with your trusted local lender for their fees before beginning the application process.

  • Home Equity Loans: A percentage of a Home Equity Loan or Home Equity Line of Credit (HELOC) may be assessed as an origination fee. After that, it’s not uncommon to be charged fees for an appraisal, pulling your credit report, title search, notary, and recording and document preparation fees.
  • Personal Loans: The fees involved in taking out a Personal Loan can include an application fee, a pre-payment penalty fee, late fees, and an origination fee. 
  • Credit Cards: A low rate credit card may be a viable consolidation option if it isn’t bogged down with fees. Many credit cards come with annual fees, late penalties, and balance transfer fees, among others. 

3: A Set Date You Will Be Out of Debt

If runaway spending put you in a position to need a debt consolidation loan, it may be prudent to choose a closed-ended solution. Using a HELOC or low rate Visa credit card to pay off balances, leaving only one monthly payment, is a solution. But if you're likely to use these flexible borrowing options and rack up more debt, they might not be the best choice for your financial situation.

Consider discussing a fixed-rate Home Equity Loan or Personal Loan with a defined repayment period. Limit any credit card use to only necessary spending and celebrate your improved financial well-being when the last installment of your debt consolidation loan is made.

4: Multiple Repayment Terms

While financial institutions strive to create unique products, be on the lookout for scenarios that allow you to customize your repayment period. Keep in mind that shorter repayment periods typically reduce interest costs but raise the monthly installment while longer repayment periods allow cash-strapped borrowers to lower monthly payments and free up their funds for other things. The best debt consolidation loans offer enough flexibility and repayment term options to meet your needs.


5: Additional Debt Support

Lenders that offer the best debt consolidation loans do so knowing borrowers are in a difficult financial situation. Any corporation can underwrite a loan and show you to the door. But there are trusted local lenders who care about their members and offer debt support or financial literacy programs

Before signing off on any loan, consider whether the lender offers programs such as debt and budgeting coaching, credit report reviews, homeownership coaching, or student loan coaching, among others. Lenders that invest in these types of programs and provide a resource center truly have your back.


Peach State’s Debt Consolidation Loan Options Can Help


If you're considering a debt consolidation loan, such as a Home Equity loan, Personal loan, or low rate credit card, please contact a lending specialist at Peach State. We can help you find the best solution for your unique financial situation and offer additional support and coaching you may be interested in.

If you're in search of the best debt consolidation loans, review our Debt Consolidation: Expectations vs Reality Guide to explore the pros and cons of each solution.

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