Here are the basics of Credit Card Consolidation
1) It’s generally a bad idea to convert unsecured debt to secured debt. This means don’t take out a home equity loan to pay your credit cards unless the interest rate is very attractive and you are very confident you can pay it off quickly. Quickly means within 3-5 years tops…preferably much sooner. If you are going to end up taking much more than that to pay off the debt, you might want to consider bankruptcy as a bankruptcy will fall off your credit report in 7-10 years anyway.
2) The goal is to lower your overall interest rate more than it is to end up with just one payment. A few zero interest/low fee balance transfers are often an excellent strategy.
3) There are no websites out there that you can trust as everyone’s financial situation is different. This isn’t rocket science though…all you do is borrow enough money at a fairly reasonable interest rate so that you can pay off your high rate credit cards. If you have good credit this is usually fairly simple. If you have poor credit this will be pretty damn difficult and there is no way to make it easy other than fixing your credit.
Are Prosper and LendingClub good options?
In my opinion, its a good option if you have no other options. The rates are generally higher than a good local credit union will offer, they require a minimum FICO score for you to even post a loan request, they are not available in all states, and your approval is based on the whim of the masses rather than some form of standard underwriting requirements.
Also with those sites, once you start trying to borrow larger amounts, say more than $10K, the loan funding rates start to drop and the interest rate starts to go up.
By sitting down face to face with a loan officer you can discuss your specific situation, explain how the circumstance that led to your current financial crisis have changed and, and give them your planned path forward towards recovery. You can also immediately address any concerns they may have with giving you a loan or even ask for the loan to be reconsidered if its declined.
Should you use Prosper or LendingClub?
With prosper and Lending club, once you post the loan there is not a lot you can do except cross your fingers. It also often takes 3 or 4 failed loan postings before you finally get a write up that is convincing enough to get your loan funded.