With most credit cards and lines of credit, you will find yourself in debt for decades if you only make the minimum payment. If you have credit cards, chances are you’re paying an interest rate of upwards of 20%. One company, First Premier Bankcard, is even trying to get consumers to sign-up for credit cards with interest rates as high as 79%! If you want to get out of the credit card trap, consider taking your unsecured loans and consolidating them into a fully-amortizing debt consolidation loan which will pay off in three or five years.
Lending Club.com is one company that offers such consolidation loans. Lending Club offers three-year and five-year fixed rate loans to borrowers that want to consolidate their debt into a single loan with a lower interest rate. Because the loan you get from Lending Club is fully-amortizing, after making either 36 or 60 payments (depending on which loan type you choose), your debt will be fully paid off. There’s no getting stuck in a cycle of only paying the minimums and finding yourself in debt forever.
You can usually get a better interest rate form Lending Club than you could if you were to borrow money from a bank and you’re definitely getting a better interest rate than you would otherwise pay on high-interest credit cards. Lending Club offers loans as low as 7% to borrowers with great credit. The average interest rate that borrowers pay is around 9%, which is a great deal compared to the 29% interest rates that mega-banks are charging consumers on credit cards. Since you’ll be paying a lower interest rate, more of your payment will be going toward the principal balance making it so that you get out of debt faster.
In order to qualify for a debt consolidation loan with Lending Club, you’ll need a credit score of at least 660. Lending Club also lists the following requirements on their website: “at least 3 years of credit history, showing no current delinquencies, recent bankruptcies (7 years), open tax liens, charge-offs or non-medical collections account in the past 12 months, no more than 10 inquiries on your credit report in the last 6 months, a revolving credit utilization of less than 100%, and more than 3 accounts in your credit report, of which more than 2 are currently open.” Borrowers from the following states cannot currently get a loan on Lending Club: Iowa, Idaho, Indiana, Maine, Mississippi, North Dakota, Nebraska, and Tennessee.
To apply for a Lending Club debt consolidation loan, visit Lending Club’s website.
