United Debt Relief Warns Consumers to Focus on APR When Considering Consolidation Loans
News related to:United Debt Relief · 2 min read
United Debt Relief, a San Diego-based debt relief firm, has issued a warning to consumers considering consolidation loans. The company advises borrowers to focus on the annual percentage rate (APR) rather than the monthly payment when evaluating consolidation loans, as the latter can be misleading.
According to the Federal Reserve, payment card APRs averaged 22.15% in the second quarter of 2026 (Fed G.19). United Debt Relief’s founder, Nick Avila, emphasized that a lower monthly payment is often the easiest thing to sell and can be easily misinterpreted.
The company points out that a $20,000 credit card balance, at 22.15%, would generate roughly $369 in interest per month before any principal is repaid. This simple interest calculation underscores why the rate, not the payment, is crucial in determining whether a consolidation loan is beneficial.
United Debt Relief recommends four key checks before accepting any consolidation loan offer:
1. Compare the APR: The Truth in Lending Act requires lenders to disclose the annual percentage rate, the finance charge, and the total of payments before a loan is signed. Borrowers should compare the new APR to the rates on their existing cards. 2. Add up the term and the fees: The Consumer Financial Protection Bureau cautions that a lower monthly payment might come from extending the loan term, which could result in paying more overall, including fees or costs. 3. Check for a teaser rate: Some low consolidation rates are teaser rates that only last for a set period. 4. Plan for the paid-off cards: The CFPB warns that taking on new debt to pay off old debt might just be delaying the inevitable unless spending habits change.
United Debt Relief serves clients in all 50 states across various debt relief programs, including debt settlement, debt validation, debt consolidation loans, tax resolution, and credit repair and builder services. The company is known for its stringent vetting process of in-network providers and law firms, each of which is Better Business Bureau Accredited with an "A" rating.