Millions of people have a significant amount of credit card debt. Debt on your credit cards is easy to accumulate. It is so easy to just use your card on purchases, and before you know it, the bill is outrageous. You then get into a snowball effect and do not stop charging. Before you know it, you have about $25,000 in credit card debt. You then need a solution to eliminate that debt, so you start looking for companies that can help. Two companies that might be able to assist you with this debt are National Debt Relief and Lending Club. Therefore, we need to compare these two businesses to see which one might be best for resolving $25,000 in credit card debt.
1. National Debt Relief
At National Debt Relief, you enroll in the debt consolidation program and could be free from debt within 48 months. They offer debt negotiation to help you eliminate your debt.
How Does Debt Negotiation with National Debt Relief Work?
When you sign the papers to hire National Debt Relief to help you negotiate with your creditors, they will work with the people you owe to allow you to pay much lower than what you actually owe. You should stop answering phone calls from your creditors and any debt collector. These credit card companies will agree to take a lower amount, thus wiping out your debt. This is a much better alternative to bankruptcy. If negotiations are successful, you could end up paying up to 50% less than what you actually owe. This can save you a huge amount of money.
Pros of Debt Negotiation with National Debt Relief
• Significantly Lower Payment
• Make one payment instead of numerous
• Pay much less than what you owe
• No certain credit score needed
• National Debt Relief has a higher amount of reduction after fees
Cons of Debt Negotiation with National Debt Relief
• Damages Credit Score
• You still are delinquent while in the program
• Creditors are under no legal obligation to negotiate
Fees of National Debt Relief
The National Debt Relief company is honest and upfront about its fees and explains that debt negotiation is a complicated way out of debt, especially because of the impact it has on your credit score. There are no upfront fees for National Debt Relief. The total cost is estimated to be around 20-25% of the total debt that you have. For example, if you have $25,000 in credit card debt, it would take you almost 32 years to pay off your cards if you only make the minimum payments, and it would cost you almost $70,000. With National Debt Relief, if you choose the 48-month payment plan, you would pay $390.06 per month, and the total cost would be $18,722.80. If your program length is 36 months, you will pay $516.79 per month, and the total cost would be $18,604.60. With these costs, you will be paying less than a consolidation loan or credit counseling. However, keep in mind that your credit will take a hit.
Eligibility of National Debt Relief
In order to qualify for National Debt Relief, you need to have at least $7500 in debt that can be negotiated. Unsecured loans are the types of debt that this company can help you with. This includes credit cards, unsecured loans, and medical bills. If you are interested in this business, go on their website and complete a form to see if you qualify. If you are eligible, you can sign the paperwork and National Debt Relief will begin negotiating with your creditors on your behalf.
You will deposit money each month into a trust fund. You have full control over this account, and you can make additional payments if you wish. This will help you complete the program quicker. You can actually remove the funds any time you wish. When the company reaches an agreement with your competitors, your debt will be settled in one lump sum.
2. Lending Club
Another option to resolve your credit card debt is to get a consolidation loan through Lending Club. With a debt consolidation loan, Lending Club will loan you the money to pay off your credit cards, and you make one monthly payment to Lending Club. You can pay off cards with high interest, and you will have a single payment with lower interest.
How does Lending Club Debt Consolidation Loan Work?
In order to apply for a loan, simply go to the website and check your rate. Checking your rate will not impact your credit score. If you are eligible, you will then receive numerous offers in which you qualify, so you can pick which one you want. The application will then ask you some information, such as your income, employment, address, and social security number. You will probably need to confirm your email address, and some documents might be requested from the lender.
Lending Club will then look for investors to back your loan. If these investors are found, your loan will be funded. The money will be deposited into your account before the week is complete. You can then pay off your credit cards.
Pros of Lending Club Debt Consolidation Loan
• Lower Interest Rate
• One single Payment
• Pay off Debt Quicker
• Might help your credit
Cons of Lending Club Debt Consolidation Loan
• Could get into a deeper hole if you keep using credit
• Once you complete the plan, stick to a budget
• Needs a decent credit score
Fees for a Lending Club Loan
If you obtain a loan from Lending Club, you could save a significant amount of money on $25,000 in credit card debt. In fact, with a loan through Lending Club, you could be an interest rate as low as 7.68% for a 36-month loan. You will pay $780 each month, and you will save around $5679 in interest. Your debt will be paid off sooner. You can also choose a 60-month loan. In this case, your monthly payment will be $503, and you will save $3565 in interest. There is no penalty for paying off your loan early, and you can make additional payments at any time.
Eligibility of Lending Club
There are several qualifications in order to get a loan from Lending Club. The company will look at your credit report. It needs to have a minimal amount of hard credit inquiries, and you should have established some credit history. Your credit score should be at least a 600, but if you have a higher score, you will get better rates. They will also look at your debt to income ratio, excluding the mortgage. You must have a job and be able to verify your income.
Both companies are reputable businesses. National Debt Relief might be best for you if you are already behind on your payments and your credit score is not great. It is a good alternative to bankruptcy. If your credit score is already damaged and you do not care about the additional harm to your score, debt settlement might be a good idea. This is for people who could not qualify for a debt consolidation loan. A debt consolidation loan with Lending Club could be the best decision for you if you have fair to good credit and if you are current on all your bills. The bottom line is to look at your situation to see which one suits your specific needs.