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The USA market is very fragile in terms of credit right now. Some Americans are still recovering from loss situations created by the recession ten years back. Many people who drowned in debt filed for insolvency and bankruptcy, and are still climbing out of debt. This shows the dependency of people on debt. At any point in time, the average household owes ~150k of debt consisting of short term personal loans, credit card debts, department store credit, or a vehicle loan. This number is excluding home loans. Woah! Americans love credit!
It should now be easy for you to understand the state of the debt consolidation market in USA. Applying for new loans impacts your credit and thus debt consolidation is the best way to combine your debts into one simple monthly payment. Many banks and credit agencies are stepping into the debt consolidation segment of the market to assist with debt reduction. Below are three banks or credit agencies which could be the starting point for your options.
Marcus by Goldman Sachs: Goldman Sachs, known for its investment banking line of business, has started personal loans for all creditworthy customers. Customers who are in debt have the stress of being in debt. They need a companion by their side who can offer loans at a competitive rate of interest to ease the burden for them. Goldman Sachs has stepped into the retail market with its Marcus product and has unbeatable policies to ease the lives of its customers.
OneMain Financial: This lender agency is indifferent to credit score so even if you have poor credit, you will get debt consolidation services from them. Their rates and origination fees vary depending upon the state and risk involved. They come with a guarantee, so if you stop paying, you lose your collateral.
Best Egg: This agency has a pool of resources for loans of certain range and term. They usually lend to borrowers with high credit scores but have a small pool for borrowers with lower credit scores. Their origination fees and interest rates are decent and have quick funding approval.
Should you opt for debt consolidation with banks and agencies?
The answer is ‘it depends’. One limitation with banks is they ask for collateral or guarantee. If you are already high on debt, you are apprehensive of using your property as collateral. You don’t want to pledge your home, car, or any other precious possession. Hence, opting for debt consolidation with banks can be a risky venture, as you would have to pledge some property.
What options do I have other than banks?
You can opt for a debt consolidation company for debt reduction. They can understand your issue and will work hard to get the best deal for you. They will buy you time, so you get to manage your debts in a better manner. But you need to evaluate all options before shortlisting any one of them. If banks or credit agencies are offering good terms (make sure you have checked for hidden transaction charges and prepayment terms), then that could be the best way to get started!
What are my rights?
As a consumer, you should be aware of the changes in the Mortgage Forgiveness Debt Relief Act. We help you in fighting for your rights relating to debt reduction. Credit companies need to highlight statements about interest hikes and consequences of late/ minimum payment. Customers should be given a notice of 45 days before changing any terms and conditions. All these amendments are in the interest of consumers who are harassed because of clicking on ‘I accept’ on terms and conditions page. There are many amendments in the interest of consumers which can be helpful in negotiating for debt consolidation.
You do have options for debt consolidation, so review each option carefully and choose wisely.
