You have a pile-up of debts and a financial disaster is waiting if you do not pay off debts at the earliest. The best way of clearing debts is to take a debt consolidation loan. Your problem in taking the loan is that you are labeled as bad credit which makes lenders apprehensive. The solution lies in applying to the lenders who specialize in offering bad credit debt consolidation loan. You can pay off all your previous debts immediately through the loan despite bad credit.
Bad credit debt consolidation loan is opted for by the people who are having a bad credit. On taking the loan, bad credit people can pay off all previous debts immediately. But the debts remain the same. The difference is that the debts are consolidated under one new lender. You therefore no longer pay installments to different lenders but instead pay monthly installments to one lender only. Like any other debt consolidation loan, bad credit debt consolidation loan is useful only when it is taken at lower interest rate as compared to the higher interest rate you have been paying on previous loans.
Your bad credit is of no major concern to the lenders if you opt for secured bad credit debt consolidation loan. Because to take the loan you have offered any of your property like home that has equity, lenders have no risk as in case of payment default the lender can recover the loan by selling the property. Secured bad credit debt consolidation loan therefore comes at lower interest rate despite bad credit. Lower interest rate is crucial in taking a debt consolidation loan.
If you are a tenant or student, you can opt for unsecured bad credit debt consolidation loan as you may not have property for securing the loan for the lender. In the absence of collateral though bad credit debt consolidation loan is offered at slightly higher interest rate, still after calculating previous interest, lenders will surely offer a comparatively lower interest rate. On comparing different loan offers you can settle for a better interest rate. Take a repayment plan to the lender for convincing him about safe and timely return of the loan.
Bad credit means you repeatedly defaulted on loan payments and therefore faced CCJs and may have filed for bankruptcy. On FICO credit score range of 300 to 850 you as bad credit are having a credit score of below 600. You should pay off some easy debts before approaching for bad credit debt consolidation loan as this will convince your seriousness towards paying off the loan.
Prefer applying online for bad credit debt consolidation loan for fast processing and approval. Online lenders take no fee on loan processing and on giving vital details of the loan.
Bad credit debt consolidation loan enables you in improving your credit score as you pay off each installment of the loan in timely manner. Make sure that you take the loan at lower interest rate as compared to previous loans.