When you find yourself in a position of overwhelming debt to a number of different lenders, debt consolidation is a great solution that can help you get on top of your finances. However, if you have bad credit to your name, this can make things harder. Let’s take a look and answer the question: can I consolidate bad credit?
Debt Consolidation
Let’s first take a look at exactly what debt consolidation is. Debt consolidation is the process of taking out a whole new loan to pay off the loans you have with all your other lenders. It comes with many benefits:
- With all your loans rolled into the one, you only have one payment to make each month. This makes things much easier for you, so you can better track your finances and pay off the loan in time.
- Reduced fees: multiple loans come with multiple fees. By having one repayment, you only have one annual fee, as well as that one repayment date each month to worry about.
- Improved credit rating: consolidating your debt helps you get back in control of your finances. As you pay back this new loan, it will reflect positively on your credit score and improve your credit rating in the process.
But this all begs the question: can I consolidate bad credit?
Can I Consolidate Bad Credit?
While debt consolidation is a great option when you find yourself overwhelmed with too many loans with too many lenders, the question is: can I consolidate bad credit? The simple answer is yes. But it isn’t as straightforward.
As discussed above, debt consolidation is the process of taking out one single loan to pay off all your other debts. This means you need to be able to find a lender who is willing to give you the funds you need, despite your credit history. If you approach a bank, the guaranteed answer will be no. They have strict lending criteria that have been met, and if you have a low credit score, they won’t be willing to take a chance on you.
Instead, you need to be willing to look beyond at non-traditional lenders. Many of them will offer a bad credit debt consolidation loan based on your circumstances, not your credit score.
What Is A Bad Credit Debt Consolidation Loan?
Now we know the answer to: can I consolidate bad credit? Now let’s take a look at how you can go about it.
The first step is to shop around for a lender. It’s important to do your research to find one that offers competitive interest rates so you don’t end up paying more overall.
Bad credit debt consolidation loans are offered to those with bad credit who are looking at rolling all their debts into one. While the lender isn’t concerned with your credit score, they will want to make sure you have the ability to pay back your loans. Instead, they want to see bank statements and other documents that show incoming and outgoing money to be sure you can meet the loan repayments.
Debt Consolidation Process
Can I consolidate bad credit? Yes! There are a number of lenders out there who are willing to offer loans to those in a position of bad credit.
Here’s the process:
- Shop around for the right lender. The best idea is to compare interest rates between them and see what their terms are. If you have a low credit score then finding lenders willing to loan you the money can take some searching.
- Consider a co-signer: this is a person who willing to share the responsibility of the loan with you. It could be a family member or good friend who will be willing to step in if you can’t meet the terms of the loan. This will give you more of a chance when it comes to taking out a loan.
- Get the paperwork ready: make sure you have proof of income to provide to your potential lender. It’s important to be able to prove that you have the capacity to make the repayments.
- Apply! Many lenders let you apply quickly online these days. Simply fill out their forms and someone will be in contact ready to set you up.
Taking Out A Loan
Are you ready to take out a bad credit debt consolidation loan? It’s time to talk to the experts at Debt Consolidation. We will take into account your personal circumstances and help you consolidate payments into one neat debt consolidation loan. Pay off those loans sooner, rather than later with our hassle-free support.