Common Terms to Know

Evaluating the fee structure and implied charges of debt consolidation loans helps you make sound financial decisions. Understand the following breakdown:

• Origination fee: Different financial institutes charge varying amounts of origination fee. Some, like PNC, Discover, LightStream, and SoFi do not charge origination fees.
• Outgoing wire transfer fee: Banks charge a fee every time you initiate outgoing wire transfers.
• Late fee: Surely delayed monthly payments reflect on your credit score but people often overlook that it hurts your pockets in more than one way.
• Overdraft fee: If the balance in your bank is lower than the overdraft fee and you've activated overdraft protection feature, you will be levied no fee. If this option is disabled yet you don't have sufficient balance, the fee transaction will still be declined.

Eligibility

• Credit score: Upstart and LightStream allow the lowest minimum credit score, which is 300 and 550 respectively.

• U.S citizenship: You must be a U.S citizen. The fact that LendingClub loans are available in most states.

• Minimum income: The debt-to-income ratio or DTI must be within 40% for single borrowers. Other than this, there is no minimum income requirement set by LendingClub.

• ‍Legal age: You must be of legal age to apply for LendingClub debt consolidation loan. The minimum age limit is 18.

Documents Required

• Identity proof: Documents like driver's license or identity cards trace your age and credibility. It is advised to keep these handy.

• Income proof: Since loans are taken on the commitment to repay, a paycheck slip on you will boast your repayment capability

• Bank details: If your loan application is approved, they will need your bank details to credit the loan amount to your bank account

• Credit information: Since debt consolidation loans tend to a coalition of personal loans, the lender requires your creditor's information to pay them

• Contact details: Sometimes, banks reach out to loan applicants for verification or if they need you to answer some questions. It is best to list the correct contact details in your form.

• Employment history: It is part of lenders' background check to confirm with your current employer and in some cases, check in with your employers in the last 5 years.
• ‍Tax data: Lenders ask this to see if you're loyal to your taxes. Add a copy of 1040 tax returns to your file.

How to Apply?

• Fill details: Press the apply option on your lender's official website. There, you can work alongside an agent who will guide you throughout the process and resolve queries spontaneously.

• Submit application: After you re-check your data, submit your application. Within 3 business days, the lender will email you with your personalized loan terms, amount, interest rates, and closing costs.

• Verification: A mortgage loan agent will verify your assets and income. Accordingly, the appraiser will contact the seller's realtor to buy. If you're refinancing, the officer will call you to schedule an appointment.
• ‍Approval: You will receive a call or email with loan approval within a week. If the lender rejects your application, they explain the reasoning in detail.
• ‍Closing: In the closing stage, you need to visit the offline branch with a valid photo ID, homeowner's insurance, and a certified check. The funds take 7 to 10 business days to reflect in your account.

Terms and Conditions

• Meet eligibility criteria: As you proceed, you can tick the checklist of qualifications. Ensure that you meet them all to maximize your chances of getting approval.

• Understand rates: APR and interest rates help you make a financially sound decision. Compare these with those of different lenders to avail the best ones. Most lenders provide rates parallel to your creditworthiness.

• Consider fees: Some lenders charge a one-time origination fee and a late fee of $15 or 5% of the loan amount. There is no processing or prepayment fee.

• ‍Co-borrowers terms: Co-borrowers share the responsibility of loan repayment. What's more, signing joint loans can improve a bad credit score.