Our editorial staff evaluates products and services independently, but Top Ten Reviews may earn money when you click on links. Learn More

Best Picks

The Best Debt Consolidation Companies of 2017

We have reviewed this category for 7 years. In the last year, we spent over 160 hours testing and reviewing, and we considered 15 services.

Author by
Latest Update
Gold Award Winner National Debt Relief 888-651-4344 Click to Call

Pros Average reduction rates, after fees, are higher with National Debt Relief than other companies' rates.
Author by

Debt Consolidation Review

Do Loans From Debt Consolidation Services Help?

The top performers in our review are National Debt Relief, the Gold Award winner; New Era Debt Solutions, the Silver Award winner; and Accredited Debt Relief, the Bronze Award winner. Here’s more on choosing a service to meet your needs, along with detail on how we arrived at our ranking of 10 systems.

Sometimes you reach a point where debt becomes overwhelming. Late payments, medical bills and personal emergencies can all add to a mounting amount of debt. If you are struggling to manage your debt but unsure of what steps to take, you can look into solutions offered by loan consolidation companies.

These solutions are not instant fixes. Many of these paths negatively affect your credit score, require long-term dedication and obligate you to still pay off the majority of what you owe. Debt consolidation companies communicate with your debtors to negotiate lower rates on your behalf. While credit companies are under no obligation to negotiate your payments, the best debt consolidation companies may be able to consolidate your debt to a single, monthly payment or negotiate to lower the total amount of debt that you owe. For more information on the best debt consolidation loans and credit management options, have a look at our articles on debt consolidation.

Debt Management: What Are Your Options?

When you start pursuing debt management options, you may get many mixed messages from those in the debt relief industry. Because there is no general industry consensus as to what the best options are, we have narrowed down your options. Many of these options work hand in hand or as part of a larger debt reduction program, but in general, these are your choices:

Debt Settlement: Settlement is the process of negotiating with your creditors in hopes of reducing the total amount of debt that you owe them. While you can undertake this process on your own, many people choose to hire a professional debt settlement company or lawyer to negotiate on their behalf.

When you begin this process, you set aside funds each month into a separate, insured account. While you're building up your funds, the company or lawyer you've selected negotiate with your creditors in an attempt to lessen the total amount of debt that you owe. When a settlement is reached, the funds that you have been setting aside go toward paying your creditors and negotiation fees. These programs take around two to four years to complete and negatively influence your credit.

Debt Consolidation: Consolidation is the process of combining all of your debts into a single, lower payment by taking out a loan to pay off your creditors. Companies usually attempt to lower your debt through debt settlement before recommending you take out a loan. The goal of consolidation is to have a lower payment at a lower interest rate than you currently have.

Debt Management Program: These programs often work hand-in-hand with credit counseling programs. During this program, you receive financial counseling and meet with a financial advisor. Additionally, the company managing your debt management program contacts your creditors and attempts to negotiate lower interest rates on your behalf. Lower interest rates allow you to more quickly pay off your debts. This debt relief program does not have a negative impact on your creditors but may limit your credit options for the duration of the program.

Bankruptcy: This should be seen as a last resort as it negatively affects your credit for many years. With bankruptcy, you officially declare that you cannot pay your debts. To pursue bankruptcy, you must qualify and complete the entire process, including pre-filing and post-filing counseling.

The New Rule: Legal Rules & Regulations

After observing unethical practices that ran through multiple industries, including debt consolidation, the Federal Trade Commission (FTC) created the New Rule. This rule strengthened consumer protections against deceptive claims and prohibited debt relief companies from charging advance fees for service.

Debt Consolidation Loans: What Are the Risks?

While a debt consolidation is less risky than other options, like bankruptcy, it still carries a considerable amount of risk. When you take out a consolidation loan, you are required to put forth collateral. Most often, the required collateral is a second mortgage or a home equity line of credit. This is incredibly risky because if you cannot meet your payments, your home is on the line. Furthermore, if you have bad credit, debt consolidation loans may come with high interest rates.

In addition to putting your home at risk, many consumers end up prolonging their debt. While having one low rate and one payment is an attractive option, many people end up in similar or worse financial situations when attempting credit card debt consolidation. According to Cambridge Credit Corp., a nonprofit credit-counseling agency, 70 percent of Americans who take out consolidation loans end up with the same or more debt after two years.

Types of Debt That Can Be Helped by a Debt Consolidation Service

Types of debt vary, and this influences what you are able to consolidate. The first thing to determine is if your debt is secured or unsecured. Secured debt is a type of debt that is secured by collateral, which includes things like your mortgage and car loan. Unsecured debts are loans or lines of credit without collateral attached to them, including credit cards and medical bills.

Other options, like student loan consolidation, may vary, depending on the consolidation company you use. Certain unsecured debts, like student loans or payday loans, may not be eligible for consolidation. Before you enroll with a company, make sure to explore your options with a financial consultant so you know exactly which debts you can and cannot consolidate.

Debt Consolidation Loans for People With Bad Credit

Many companies advertise low interest rates for direct loan consolidation, but these rates are typically reserved for those with exceptional credit ratings. If you've had trouble with your finances in the past, you most likely will not qualify for these rates; consolidation loans for bad credit, often come with high interest rates attached. However, if you've met with a financial advisor and have the discipline to stick with longer payments, then debt consolidation might be worth the sacrifices.

Best Debt Consolidation Companies: What to Look For

When choosing a company to consolidate your debt, it is important to find a company that is reliable and compliant with the FTC regulations. Do not continue to work with a company that does not disclose all of the legally required information before encouraging you to enroll.

Company accreditations are another key indicator on whether or not a company is adhering to ethical standards. The accreditations listed below are through private agencies and are not government accreditations. However, these entities are recognized as authorities within the industry and have missions to promote ethical practices within the debt management industry.

The American Fair Credit Council (AFCC), formerly known as the TASC, advocates for consumers. In order to become AFCC accredited, a company must be fully compliant with FTC regulations and undergo an annual renewal process.

The International Association of Professional Debt Arbitrators (IAPDA) offers certifications and exercises for debt specialists. Companies that are IAPDA certified have been professionally trained and certified in debt management best practices and upholding ethical standards.

The United States Organizations for Bankruptcy Alternatives (USOBA) has rigorous standards that include FTC regulations, plus additional standards that debt consolidation companies must adhere to.

Lastly, look for what supplemental resources a company offers in addition to consolidation. While any company can provide negotiation or consolidation services, the best companies provide solutions for managing your finances and staying out of debt. Any company who is looking for repeat customers should be avoided.

What We Evaluated: What We Found

Debt consolidation programs require you to submit personal identifying information and meet a minimum debt limit before you can enroll in a program. Because of these requirements, and debt consolidation programs' negative impacts on your credit scores, our reviewers were unable to fully test the multi-step debt consolidation process.

While we did not test the process, we determined other aspects of the process to be important in conjunction with the program itself, such as customer service and industry credibility.

Your financial situation and personal needs determine which company best fits your needs. The following factors are important considerations when determining which debt consolidation program to pursue. Since these programs can take years to finish, it is vital to consider all the information up front.

How forthcoming a company is with information is a huge factor when choosing a debt consolidation company. Before you choose a company, make sure to understand its history. Due to the New Rule, there are things that a company legally must disclose to you before you enroll in its program. These include educated estimates of the potential length of your program, the cost of your program, your rights as a consumer, and the fact that you are still responsible for your debts and may receive collection calls.

Companies legally cannot charge upfront fees for services and must provide an upfront estimate of how long your program will take. Also, companies should never put pressure on you to disclose personal information, such as your bank information, before you enroll in a program.

Finally, consolidation companies cannot promise to stop collection calls. Collection agencies are within their legal rights to contact you. While your debt consolidation company may attempt to lessen these calls, the calls might not stop, especially if you stop making your payments to your creditors as part of the program.

For our tests, we examined how well a company adhered to these standards. We contacted each company multiple times over the phone and through email. We asked detailed questions about the program requirements, including length and cost of the program. We also asked about upfront fees and what companies would do in order to stop collection calls. Lastly, we made note of any companies who pushed us for personal information during the consultation. Companies should provide you a consultation and all relevant information before pushing you to enroll.

In these tests, New Era Debt Solutions was the most transparent. Our questions were answered forthright, and the information was consistent. In addition, the company website has a detailed Truth and Transparency section dedicated to explaining the processes of its program and the FTC regulations. Many companies advertise that they never charge upfront fees but fail to acknowledge that they legally cannot do so. New Era clearly explains the FTC rules about upfront fees and does not try to take credit for lack of advanced charges.

Customer Service & Resources
Most debt consolidation programs offer a personal advisor who manages your account for the duration of your program. This personalized attention and familiarity with your accounts is especially important because of the amount of time a consolidation program takes.

In our tests, we evaluated how thoroughly representatives explained the debt consolidation program and other available debt relief options. While debt consolidation can help you manage your debt, it is not the only solution and sometimes it is not the right fit for you. The best debt consolidation companies encourage you to examine all of your options instead of forcing you into one.

Pacific Debt Incorporated scored especially well in customer service. Its support agents were polite and not pushy. Additionally, when they did not have the answers on hand, they sought them out and promptly followed up with us.

Due to the length of debt consolidation programs and the amount of money and discipline you apply to it, it is vital to learn as much as you can about a debt consolidation company before beginning the program. Seek out companies that provide transparent information, adhere to FTC regulations and offer consistent, personal support.

Our Verdict & Recommendation

In our tests, New Era Debt Solutions, National Debt Relief and Accredited Debt Relief earned top marks due to their consistent transparency, excellent customer service and provided services. While these three top debt consolidation loans earned the top spots, other companies on our lineup have standout features of their own.

Premier Debt Help and Superior Debt Relief Services each charge a percentage of the settled amount of debt rather than your total enrolled amount. If you're not sure what debt relief option is right for you, Accredited Debt Relief and CuraDebt both offer debt management plans.

No matter which company you choose for your bill consolidation, it is important that it complies with FTC regulations and provides you information upfront without requiring your personal information. Make sure to select a company you can comfortably work with long term.