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debtFinding the Best Debt Consolidation Companies of 2017

For years, we have been reviewing debt consolidation companies. Here you’ll find all the information you need on the top debt consolidation companies.

What are the Benefits of Debt Consolidation?

Simplifed Finances

Say goodbye to paying many bills each month. Instead, you only have one bill to pay.

Reduced Interest Rates

Save money by getting a low interest rate debt consolidation loan.

Lower Monthly Payments

Get a lower monthly bill when you get approved for a low interest rate consolidation loan or a longer period to repay the loan.

Get Out of Debt Faster

If you keep your monthly debt payments almost the same while getting a lower interest rate, you can pay off all your debt faster.

Our Picks for the Best Debt Consolidation Companies

Get a Debt Reduction of Up to 50%

When you use any of the best debt settlement companies, there’s a chance that you could reduce your total debt up to half of its original amount.

Summary of Programs and Fees

NationalAccreditedNew EraPacificFreedomDebtmericaCuraDebtPremierSuperiorOak View
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)24-4824-4836-4824-4824-4824-4824-4812-421-426-48
Average Reduction(minus fees)30%25%37%30%25%29%N/A33%42%35%
Average Fee for Debt Relief18-25%18-25%14-20%15-22%18-25%20-24%20%20%35%25%
Monthly FeesNoneNoneNoneNoneNoneNone$10.75NoneNone$50.00
Debt Amount Requirement$7500$7500None$10000$7500$10000$7500$5000$10000$1000
NationalAccreditedNew EraPacificFreedom
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)24-4824-4836-4824-4824-48
Average Reduction(minus fees)30%25%37%30%25%
Average Fee for Debt Relief18-25%18-25%14-20%15-22%18-25%
Monthly FeesNoneNoneNoneNoneNone
Debt Amount Requirement$7500$7500None$10000$7500
DebtmericaCuraDebtPremierSuperiorOak View
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)24-4824-4812-421-426-48
Average Reduction(minus fees)29%N/A33%42%35%
Average Fee for Debt Relief20-24%20%20%35%25%
Monthly FeesNone$10.75NoneNone$50.00
Debt Amount Requirement$10000$7500$5000$10000$1000
NationalAccredited
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)24-4824-48
Average Reduction30%25%
Average Fee for Debt Relief18-25%18-25%
Monthly FeesNoneNone
Debt Amount Requirement$7500$7500
New EraPacific
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)36-4824-48
Average Reduction37%30%
Average Fee for Debt Relief14-20%15-22%
Monthly FeesNoneNone
Debt Amount RequirementNone$10000
FreedomDebtmerica
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)24-4824-48
Average Reduction25%29%
Average Fee for Debt Relief18-25%20-24%
Monthly FeesNoneNone
Debt Amount Requirement$7500$10000
CuraDebtPremier
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)24-4812-42
Average ReductionN/A33%
Average Fee for Debt Relief20%20%
Monthly Fees$10.75None
Debt Amount Requirement$7500$5000
SuperiorOak View
Debt Settlement
Debt Consolidation
Debt Management
Typical Time Frame (Months)1-426-48
Average Reduction42%35%
Average Fee for Debt Relief35%25%
Monthly FeesNone$50.00
Debt Amount Requirement$10000$1000
Debt Consolidation

What Are Your Debt Management Options?

When you look into your debt management options, you could get confused and receive mixed messages from various debt relief companies. As there is no general industry consensus to what your best options are, we have researched some of those that work best. Some options work better when part of a larger scheme of debt reduction, but generally here are your choices:

Debt Settlement

This is the process of negotiating with your creditors so they may reduce the total debt you owe them. Even though you can do this process by yourself, people often choose a professional or lawyer to do the negotiation on their behalf as the industry expertise really makes a difference.

During debt settlement, you should set aside funds each month towards a separate and insured account. As you’re building up your funds, your debt settlement company or lawyer will negotiate with your creditors so they could lessen your total debt amount. Once they’ve reached a settlement, use the funds you have been setting aside in paying your creditors and negotiation fees. Debt settlement programs take 2-4 years to complete, and also negatively affect your credit score.

Debt Consolidation

This is the process of combining all your debts so it becomes a single and lower payment – this happens by taking out a loan that pays off your creditors. Companies attempt to lower your debt through debt settlement first before letting you take out a loan. Consolidation allows you a lower payment at a lower interest rate than what you currently have.

Debt Management

These programs usually work in tandem with credit counseling. During a debt management program, you get financial counseling by meeting with a financial advisor. In addition, the company also contacts your creditors in an attempt to negotiate lower interest rates for you so you may quickly pay off your debts. Although this debt relief program doesn’t have a negative impact on your creditors, it may limit your credit options while you are still in the program.

Looking at Accreditations and Customer Relations

NationalAccreditedNew EraPacificFreedomDebtmericaCuraDebtPremierSuperiorOak View
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education95%90%90%85%85%80%85%90%80%80%
Customer Service Rating85%80%90%80%75%85%80%80%75%85%
NationalAccreditedNew EraPacificFreedom
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education95%90%90%85%85%
Customer Service Rating85%80%90%80%75%
DebtmericaCuraDebtPremierSuperiorOak View
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education80%85%90%80%80%
Customer Service Rating85%80%80%75%85%
NationalAccredited
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education95%90%
Customer Service Rating85%80%
New EraPacific
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education90%85%
Customer Service Rating90%80%
FreedomDebtmerica
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education85%80%
Customer Service Rating75%85%
CuraDebtPremier
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education85%90%
Customer Service Rating80%80%
SuperiorOak View
Assigned Advisor
Online Portal
Mobile App
AFCC Accreditation
USOBA Accreditation
IAPDA Accreditation
Customer Education80%80%
Customer Service Rating75%85%

Most of the Top Debt Consolidation Companies Offer:

Free Estimate of Your Total Savings

Free Consultation

Transparency

No Obligation and Upfront Charges

A Review of Debt Consolidation

Do Debt Consolidation Loans Help?

Debt is a normal thing people sometimes have to go through, but for many it can get to the point that it’s overwhelming. Personal emergencies, medical bills, and various forms of late payments could all add up to a huge debt. If you happen to be struggling in managing debt, and are unsure what to do about it, you can look into loan consolidation companies for help.

While these solutions work, remember that they are not instant fixes. You will need to obligate yourself long-term as you still need to pay off majority of your debt. What these companies do is communicate with your debtors, negotiating lower rates for you. They can either consolidate your debt to a single payment that happens monthly or negotiate the total amount to be lowered than your original debt.

The New Rule: Legal Rules & Regulations

The Federal Trade Commission (FTC) created the New Rule after noticing several unethical practices that ran through multiple industries, including debt consolidation. The New Rule helped create stronger consumer protections against bad, deceptive claims, as well as prohibited debt relief companies from asking for advanced fees for their work.

What Are the Risks for Debt Consolidation Loans?

Although debt consolidation is less risky compared to other options, it is still risky nonetheless. When you take out a consolidation loan, it’s required that you put in a collateral. Most of the time, this required collateral is a second mortgage or home equity line of credit. It’s extremely dangerous because if you don’t pay up, your home is at risk. In addition, if you have bad credit, these loans may come with really high interest.

On top of all of that, many consumers who have gone through debt consolidation loans end up prolonging their debt. While it’s attractive to have one low rate and own payment, many people end up in similar or even worse financial situations in an attempt to fix their issue. According to a study by Cambridge Credit Corp., a non-profit agency, 70% of Americans who take out debt consolidation loans end up with the same or even more debt after just two years.

Types of Debt That a Debt Consolidation Service Can Help

There are many types of debt, and this influences what you can consolidate. The first thing to know is if your debt is either secured or unsecured. Secured debt is debt secured by collateral, which may include your mortgage and car loan. Unsecured debts are loans and lines of credit with no collateral attached, such as credit cards and medical bills.

Other options such as student loan consolidation may vary. This depends on the consolidation company you choose. Certain unsecured debts like payday loans and student loans aren’t eligible for consolidation. As such, make sure to explore your options with a financial consultant first before enrolling with any company, so you know exactly which debts you’re allowed to consolidate.

Debt Consolidation Loans for Bad Credit

Many companies advertise direct loan consolidation with low interest rates, but they’re usually for those with great credit. It’s unfortunate that some people who want to consolidate their loans have bad credit. If you’re one of them, you’ll most likely not qualify for such rates – bad credit consolidation loans often come with high interest rates. However, if you have met with a financial advisor, and know you have the discipline to go through longer payments, then debt consolidation might just be the solution for you.

What to Look for in the Best Debt Consolidation Companies

When choosing a debt consolidation company, one of the important things to realize is that the company should be both reliable and compliant with FTC’s regulations. If a company does not disclose all the legally required information first before making you enroll, do not continue to work with them.

Another key factor is a company’s accreditations – it indicates whether or not they adhere to ethical standards. The ones we listed below are through private agencies, not government ones. However, they are recognized authorities in the industry and promote ethical practices when it comes to debt management.

American Fair Credit Council (AFCC): Formerly known as The Association of Settlement Companies (TASC), they advocate for consumers. To be AFCC-accredited, a company has to be fully compliant with FTC regulations, plus go through an annual renewal.

International Association of Professional Debt Arbitrators (IAPDA): They offer certifications and exercises for debt specialists. IAPDA-certified companies have been professionally trained and certified for debt management best practices as well as for upholding ethical standards.

United States Organizations for Bankruptcy Alternatives (USOBA): They have demanding standards, including FTC regulations and many other standards that debt consolidation companies should stick to.

Lastly, look for any supplemental resources a company offers on top of helping with consolidation. Most companies can provide you consolidation and negotiation services, but only the best ones help give solutions for managing your finances, so you don’t just get out of debt – you stay that way. Also remember that companies looking for repeat customers should be avoided.

What We Found During Evaluation

Debt consolidation programs require you to give them personal identifying information as well as meet a minimum credit debt limit so you can enroll in any of their programs. These requirements, plus the way debt consolidation programs have negative impacts on credit score, have hindered our reviewers from testing the multi-step consolidation process to the fullest extent.

However, we were able to determine other aspects of the process which are just as important as the program itself, including customer service and industry credibility.

What determines which company best suits you and your needs, you need to take a look at your financial situation as well as your personal needs. Here are factors which you need to consider when determining which program to choose. As these programs may take years for you to finish, it’s important to consider everything you could upfront.

Transparency

How helpful a company is when it comes to sharing information is a major factor in choosing a debt consolidation service. Before choosing any company, dig into and understand its history. Because of the New Rule, a company has to legally disclose such information to you before you enroll in their program. This includes proper estimates of the potential cost and length of your program, your rights as a consumer, and the fact you’re still responsible for your debts so you may still get collection calls from time to time.

Companies cannot legally charge upfront fees for their services – they have to provide an upfront estimate of that as well as the probable program duration. They should never pressure you to give them personal information either, including bank information, before you enroll with them.

Lastly, consolidation companies are not supposed to promise you that collection calls will stop – remember that these collection agencies have a legal right to contact you about it. While your debt consolidation service will attempt to lessen these calls, there’s a chance it may not completely stop especially when you stop paying them temporarily as part of your debt consolidation program.

During our testing, we checked how well a company adhered to such standards. We contacted each company several times, both over the phone and via email. We asked them detailed questions about their program requirements including the cost and duration. We also asked about upfront fees, as well as what they would do to stop collection calls. Finally, we took note of companies that pushed us for personal information while we were just consulting – companies have to provide proper consultation and relevant information before pushing you to sign up.

During these tests, we found New Era Debt Solutions to be the most transparent. They answered questions straight away, and consistently. Their website also features a detailed Truth and Transparency section dedicated to explaining bot their program’s processes as well as FTC regulations. Many companies say they never charge upfront fees but forget to declare that they legally cannot do so to begin with. New Era explains the FTC rules about this and doesn’t try to take credit for not charging upfront fees.

Customer Service

Majority of debt consolidation programs offer a personal advisor that helps you manage your account during your program. This expertise combined with personalized attention is very important especially when you take into account how long a consolidation program takes.

During our tests, we evaluated how thorough these representatives explained the debt consolidation program and any other available options for debt relief. While debt consolidation helps manage debt, it’s not the only solution and may even possibly be not the right fit for your situation. The best debt consolidation companies urge you to check all your options instead of forcing you to sign up for one right away uneducated.

We gave Pacific Debt Incorporate high commends in customer service, as their support agents were polite. They were never pushy with us. It also impressed us that whenever they did not have the answers right away, they looked for them first and followed up with us right away, instead of bragging to know everything.

Because debt consolidation takes years, plus the amount of money and discipline you’ll need, it’s vital to know as much as you can about a company before you sign up to their program. Look for companies that are transparent with information, adhere to FTC regulations, and offer you consistent support.

Verdict

During our tests, we found that New Era Debt Solutions, National Debt Relief, and Accredited Debt Relief to be our top rankers as they have consistent transparency, offer great customer service, and provided quality services. Though these three took the top spots, there are other companies on our lineup that also have great features of their own.

Premier Debt Help and Superior Debt Relief Services both charge a percentage of the settled debt amount rather than your total enrolled amount. When you’re not sure which debt relief option suits you best, both Accredited Debt Relief and CuraDebt offer debt management plans.

Regardless which company you choose for your situation, what’s important is that the company complies with FTC regulations and provide you information without demanding your personal information upfront. Bottom line is, choose a company you feel comfortable working with as you will be doing this with them long-term.