Can I Still Get a Debt Consolidation Loan Even with Poor Credit?
It is undeniable that someone only seeks a debt relief approach when they feel that their consumer debts are too much to bear. Besides, individuals who consider credit counselling or debt consolidation are those who have poor credit. Most of them have not complied with making any payments to either of their consumer debts for quite a while. Thus, most are in the situation of feeling frustrated and despair and on the thought that their no more hope left or them.
Moreover, some of which individuals even felt that the only means for them to get out of debt is through a consumer proposal or bankruptcy wherein both options can destroy their credit record for many years. Luckily, regardless of your poor credit, you can still qualify for a debt relief option that will not severely impact your credit for several years. One of these debt relief options is debt consolidation.
Is Debt Consolidation a Good Move?
In general, debt consolidation is beneficial if your consumer debt is owed less than $10,000. It is a good move for someone with this amount of consumer debt since it does not severely affect your credit history. You just have to ensure that you’re payments are on-time; this way, the only time it’s going to affect your credit is the initial hit in your credit during your application. Also, it is a good move if you owe such amount of debt since the savings that you can get on the other debt relief approach, such as a debt settlement is insignificant as compared to debt consolidation.
How Can I Save Money with Consolidation loans?
If you are paying debts to several creditors, debt consolidation can save you money as it enables you to pay one monthly payment with lower interest charges. Hence, you can reduce the amount that you’re paying each month. After completing a debt consolidation, you normally have a below-average interest charge, and you’ll be left with a single payment every month, which is more convenient for you to cover up.
Debt Consolidation and Bad Credit
If you have adequate money to make the minimum monthly payment of your new debt regardless of your poor credit, you can still get a consolidation loan. The interest rates of your debt consolidation loan depend on your credit score. This means that if your credit rating decreases, your interest charges also increases. Therefore, though you can still get a debt consolidation loan even with poor credit, you’ll be paying more in consolidating your debt as compared to someone who has good credit.
Furthermore, lenders differ as to their perspective in accepting debtors with bad credit. Also, it is ideal to ask your personal bank if you are attempting to get consolidation loans. This is because of the rapport that you have with your own bank, which might be a factor for you to get a lower interest charge rather than getting it from the others. However, considering that your rating is not outstanding, you must anticipate the creditors or lenders might be hesitant to approve your consolidation loan application.
Debt Consolidation vs. Debt Settlement
It is ideal to compare debt settlement and debt consolidation before you decide what debt relief alternative is due to your situation. If your primary goal is to lower both your interest rate and debt principal, you can get this predicament through a debt settlement. These instances will free you from debt in a shorter period and will allow you to save more money. However, the negative aspect of debt settlement is the impact that it can yield on your credit. Besides, the impact on your credit score can hinder you from getting more loans or any lines of credit in the future.
To get reliable and honest guidance as to which debt relief program suits your needs, simply fill out the debt relief form and get help in eliminating your debt.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.