How long does it take to get approved for debt consolidation?

You should wait around 7 business days for the entire decision and funding process to finish. Your wait may be shorter or as long as a month, depending on the lender and your personal situation. Once you receive your debt consolidation loan, you will use the money to pay your creditors. Start by reviewing your credit score.

Borrowers with good to excellent credit scores (690 to 850 FICO) are more likely to get approved and get a low interest rate. Late payments are reported to credit reporting agencies 30 days late, which can reduce your credit score by up to 100 points. If you are within the 30-day deadline for repayment of a debt, there is still time to file it. Debts owed represent 30% of your credit rating.

If you can, pay any high-interest credit card before consolidating. This will improve your debt-to-income ratio, which can help you get a lower rate for the consolidation loan. Credit unions are nonprofit organizations that can offer lower rates to borrowers with bad credit. You must become a member to apply for a loan, and many credit union loans require a heavy withdrawal with your application, which may temporarily damage your credit rating.

Finally, make your first payment within 30 days of receiving the debt consolidation loan. NerdWallet has reviewed more than 30 lenders to help you choose the one that's right for you. Below is a list of lenders that offer the best debt consolidation loans. Start by checking your rates.

If approved, you can receive your funds as soon as the next business day. We offer competitive fixed rates and no opening fees. For an unsecured personal debt consolidation loan, it takes between one and seven days to disperse the funds. Consolidating Federal Student Loans Is Not Immediate.

While it usually takes a few weeks to get a federal direct consolidation loan, it can sometimes take months. Debt consolidation loans and alternatives mentioned above are better for people who may qualify for a low interest rate. After you enter your debts, you will see typical lender rates and any potential savings if you consolidate at a lower rate. With a debt consolidation loan, you only have to manage one payment, which means less chance of losing a payment.

Ideally, the new debt consolidation loan has a lower rate than the combined interest rate of your other debts. If you're struggling to get approved for an affordable unsecured debt consolidation loan, it's worth considering a secured loan. Debt consolidation occurs when a borrower applies for a new loan, usually with more favorable terms (a lower interest rate, a lower monthly payment, or both) and then uses the income from the loan to pay off its other individual debts. This fee is an important consideration when calculating how much you can save by consolidating your debts with a Best Egg personal loan.

If the lender offers direct payment, it will disburse your loan proceeds to your creditors, paying off your old debts. Debt settlement companies like National Debt Relief and Freedom Debt Relief work with you to pay off your debt for less than you owe. Discover will also distribute the funds directly to external creditors, which can save time trying to consolidate your debt and take control of your finances. That said, going through this process usually results in an entry on your credit report that you are in a debt management plan.

It can be daunting if you can't find a good debt consolidation loan or if you face the possibility of debt settlement or bankruptcy. In addition to offering flexible loans that are available for terms of three to six years, Marcus also helps debt consolidation borrowers by offering direct payments to third party creditors. Start with the following steps to help you find the right personal loans for debt consolidation and increase your chances of approval. If you are considering applying for a debt consolidation loan, keep in mind that some lenders are predatory by nature.

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Jayne Kilbury
Jayne Kilbury

Professional music lover. Avid writer. Lifelong coffee ninja. Award-winning twitter guru. Total internet aficionado.

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